Many of today's nonprofit health and human service organizations are developing coalitions, mergers, and other types of interorganizational alliances. These newly formed partnerships are created to gain a greater capacity within the organization and establish community-driven initiatives. While new strategies can enhance the scope and quality of organizations, they may also represent organizations own survival.
Through well-developed examples, this book examines the formation and maintenance of strategic alliances. From the motives that lead organizations to form relationships, to practical tips on how to sustain, recreate, and end partnerships, this text is a useful reference for both beginners and seasoned practitioners.
Chapter 10: Mergers, Consolidations, and Acquisitions
Mergers, Consolidations, and Acquisitions
Mergers and consolidations are two of the most familiar models of coadunated alliances. Mergers are legally sanctioned alliances in which one or more organizations dissolve and are absorbed by another. The surviving organization retains the assets and liabilities of both organizations. Consolidations are statutorily defined alliances in which two or more organizations are fully dissolved, and one newly incorporated organization is created. The assets and liabilities of the organizations are combined and belong to this new organization, and one new governing board is formed.
As with any newly formed nonprofit organization, a consolidated organization must comply with all statutory and Internal Revenue Service (IRS) application procedures in order to incorporate and receive tax-exempt status. In a merger, because the ...