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Trouble in Paradise?

November 12, 2007

Interesting article about nonprofits and mergers by Stephanie Strom in yesterday's New York Times. What got my attention wasn't the stuff we already know -- mergers of nonprofits present special challenges (no real financial incentives for executives, potential alienation of loyal donors and committed employees) -- but the suggestion that the much-publicized merger between the Peninsula Community Foundation and the Community Foundation Silicon Valley has hit some bumps in the road.

Announced in the summer of 2006, the merger, which created the Silicon Valley Community Foundation, received broad support from stakeholders in the community and five Bay Area foundations -- Hewlett, Packard, Irvine, Skoll, and Omidyar -- each of whom put up $1 million to pay for consultants, new offices, and other expenses. But, writes Strom,

three months after the merged foundation moved into its new home, those supporters have soured because of staff departures and discontent among donors and local nonprofits. Emmett D. Carson, its new leader, recently was grilled by officials from the foundations that encouraged the merger, and his future is now in question, those officials said.

Carson, whom PND interviewed shortly after he was tapped to lead the new entity, "defended decisions he has made, like requiring everyone on staff to reapply for their jobs and reducing the number of executives who report directly to him.

"Mergers take time," he told Strom. "We have to merge investment portfolios that have been managed differently, we have two incompatible and antiquated IT systems --

and then we have the dreaded 'C', the cultures of two organizations that both climbed the mountain very effectively but very differently. [That] is the hardest part.

It certainly sounds like it.

-- Mitch Nauffts

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