1 + 1 = 3

Sometimes the best way to grow and enhance sustainability is to merge with someone else.

Parochial schools exist to serve the community.  The only reason for two or more schools to merge is to better serve their community and students. The goal is to create an organization that is more valuable to the community (meaningfully, measurably, and durably) and the students than the two or more schools were independently.  It is important to balance the immediate costs with the long-term payback (it must be a numbers-driven decision).

When two Christian schools merge, both sets of students must benefit and both sets of stakeholders (the community, donors, staff, etc.) must benefit.  The economic and financial benefits should never be the reason for the merger.  However, the resulting business model must be supported by a sustainable financial structure.

Unfortunately, it is impossible to have a situation where everyone wins.  After the merger there will be duplicated services (accounting, marketing, administration, HR, etc.).  Some of those individuals will lose their jobs.  This explains why many school leaders are reluctant to consider a merger.  Since schools exist to serve their communities, it is sometimes necessary for the leadership (board and professional staff) to make some uncomfortable decisions for the greater good.

Creating operating efficiency is important because it reduces the cost of the merger.  Since creating value for the students and the community is the primary goal, operating efficiency rarely justifies a merger.  In fact, when operating efficiency is the tiebreaker that ends the discussion, you know that the merger is unlikely to create an organization that is significantly better than the two original organizations.  In addition, it is likely the resulting organization will have a low level of sustainability. When the increased value of the resulting organization is the deciding factor, you know you are creating an organization with increased sustainability.

It is rare for the merger of two struggling organization to create an organization with significant value to the community.  Any merger should build on the strengths of both organizations.  When neither has sustainable strength it is hard to find something to build on.

Next Step:

Look around your community for several merger candidates

Determine which are the best candidates based upon the value to both the students and your community

Share your findings with your board

The number of potential candidates may surprise you.  Rarely is a struggling school an excellent candidate.  However, the struggling school might provide a diversity of students, additional services, or other benefits at a lower cost than if you built the programs.  An organization with a retiring principal may also offer some valuable opportunities.  Non-competitors like a youth organization or after school program may present some interesting opportunities.

Take It Further:

Ask your board what type of organization it feels would make the best merger candidates

Ask your board how often it feels the market should be surveyed for merger candidates


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