Merging Two Organizations: Why an Association Management Company is the Right Choice

Merging Two Organizations: Why an Association Management Company is the Right Choice

There have been numerous mergers of two or more associations or nonprofits. Some are smooth transitions and are seamless to members and stakeholders, and others can get a bit messy. Choosing the right partner to help with this type of project is key to the success.

Two organizations with similar missions wanted to form an alliance in order to create a stronger industry. One was a 501c(6) (association) and one was a 501c(3) (foundation), and with these differences, there was no easy way to merge.

The Association of Pool and Spa Professionals and the National Swimming Pool Foundation engaged Association Headquarters (AH) to facilitate a unification of the two organizations.

Their plan was to create an umbrella organization to parent both organizations while still maintaining both the c3 and c6 status.

During the search process, the committee accepted proposals from consulting companies, law firms, search firms, and the like. The search committee felt that with the experience and history that an AMC has, it was the best option for this type of project.

AMCs typically have the background and historical knowledge of a merger of this kind and can offer guidance on the day to day operations as well as help staff work through the transition. This was key to the success of this merger.

Other firms mentioned above were able to help with the legalities of the merger or the consultative needs, but an AMC was well versed on how the current staff should be utilized to be most efficient and effective. An AMC’s experience with component management also made this type of firm more capable to guide the committee on which responsibilities should lie with which part of the organization since, as an AMC, the experience was there to know where the duties would perform the best.

The two organizations worked together to come up with the Pool and Hot Tub Alliance (PHTA). They engaged legal counsel to prepare an agreement that outlined the following responsibilities under each status:

Parent Org. (PHTA)

Association

Foundation

Advocacy

Certification

Education

Partnerships

Member Benefits

Publications

Promotion of Industry

Standards & Codes

Resources

 

 

Fundraising

 

 

Grant Writing

The announcement of the unification was made to the industry and the newly formed PHTA continued working on developing new governing documents, amending bylaws and articles of incorporation, creating a joint set of policies and creating the new board. It was agreed that each organization would bring five board members to PHTA and each member will serve one, two- and three-year terms so both organizations would have representation for at least the next three years. 

Since the unification was finalized, PHTA has developed a new logo and brand and aligned the financial plans for all three organizations with the shifting of many programs. Part of this planning included a full program evaluation and portfolio review. All existing programs and services were evaluated and who those benefits appealed to, whether they were profitable or not performing, and it was determined which of those programs needed to be phased out.

The staff of the two previous organizations were integrated and since half are based in Colorado Springs, CO and the other half in Alexandria, VA, AH’s HR resources assisted the Interim CEO in a compensation and benefits analysis to ensure there was parity across the new organization. 

Because the merger was handled by an AMC, the two organizations could be confident that all the pieces needed to complete the project would be handled in-house. Much of the benefit of an association partnering with an AMC is the fact that there is knowledge-share and a main hub of information. This sentiment held true in this instance, as well.

Staff were able to take on jobs and duties that another firm may have had to rely on volunteers for and since the job of an AMC is to take the operations behind the scenes, so the volunteers can focus on the mission, cause, and issues at hand, this worked well for this project.

The entire pool and hot tub industry has been pushing for this unification for many years so this is a great accomplishment and will help drive the industry forward. Because the industry is small, many stakeholders were participating in both organizations, and this merge pleases all parties involved.