On Nonprofit Mergers and Consolidations

August 4, 2010 at 8:28 am Leave a comment

Some more food for thought as Project Concentrus moves ahead. This advice comes from Curtis Thaxter LLP.

Merger or Consolidation. Merger or consolidation are the ultimate in integration. In a merger, one or more corporations are subsumed into another, with the other continuing as the surviving corporation. In a consolidation, two or more corporations are combined into a new corporation. In the case of a merger, the survivor ends up with all assets of the participating corporations and is responsible for all liabilities, whereas in a consolidation, the new corporation receives all the assets of the participants and becomes responsible for all their liabilities.


  • Assuming the corporate and exempt purposes of the participants are consistent, mergers or consolidations allow seamless integration of operations and mission fulfillment.
  • Mergers and consolidations allow for reduction of duplicative services and redundant locations.
  • They permit the weaker organization’s mission to continue to be fulfilled, instead of closing it down, and allow both organizations to pool their resources.


  • Mergers and consolidations can be expensive because most organizations will need professional assistance to do it right.
  • Numerous issues must be analyzed, such as tax exemption and UBIT issues, third party consents, harmonizing corporate and exempt purposes of both organizations, staff utilization and space requirements.
  • Merger or consolidation can cause significant friction if it is determined afterwards that the participants are incompatible.

Entry filed under: chamber and economic development merger, Chamber Consolidation, Chamber Merger, Nonprofit Mergers. Tags: , , .

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