The Original
The New AT&T
In December of 2006, Cingular became a wholly owned unit of AT&T. It’s OK that you don’t remember; very few people do. (Yes, you can smell an object lesson coming?) I call it “The Cingular Dilemma” (TCD).
Cingular, prior to its acquisition, was the second largest wireless carrier in the world’s largest wireless market and….we don’t even think about it anymore. It was re-branded “The New AT&T.”
(Unless I’m way off base, I think we’re unlikely to see anything in the non-profit sector the likes of “The New Gates Foundation” or “The New Alzheimers Association.” )
Just this sort of phenomenon — The Cingular Dilemma — is, I believe, what keeps non-profit, and foundation, management teams up at night, tossing and turning. Why?
In these perilous and uncertain times, the plight of non-profits, and the entire sector, is an unknown. As demand for services continues to and funds continue to drop, non-profits look to the possibility of “mergers, collaborations, partnerships” as a way through, a tactic that could insure survival.
The Model: Buy Me Up, Scotty
The models which are often used are based on the for-profit M&A (Merger & Acquisition) design. While it’s well known, it’s worth stating that: there are no golden, let alone, brass parachutes for discarded management teams; there are no severance packages even when you fail or when you can’t come to terms with the Board on an outlandish pay package for yourself. And, of course, in the event you would like to “cash out,” there is no stock exchange on which to launch an Initial Public Offering. In fact, non-profits are required upon closure, by IRS statute, to distribute their assets to other non-profits.
If for-profits and non-profits are so different, why do we treat them the same on this subject of partnering? Why haven’t we created a new set of rules that would assure, let’s say, that Cingular’s name would still be around…in some form?
Clip from Points of Light Institute Website
My answer is that I think we’re stuck and scared. I see a shortage of imagination and a language that is lacking in subtlety. Even though we have models, like the Points of Light Institute (recenlty “merged” with HandsOn Network) that tell a different story, we’re stuck in an old model: “if I partner with you, I go away.” Yes, there is a cultural theme here, too: cowboys ride alone.
Combine the cultural and creative reality with the landscape — 74% of our non-profits are under $500K in annual revenues; 61% are under $250K — and we can see that there isn’t a lot of perceived “wiggle room” to make anything earth-shattering happen.
This reality puts the subject of partnering in the non-profit sector in a relatively unsophisticated stage that makes any change complex, expensive, time-consuming and fear-producing. (Here comes the pitch.) We in The Minerva Project are working to create tools and methodologies that would drive down the expense and increase the simplicity of evaluations and potential integrations.
Where do we go from here? Some more talking wouldn’t hurt. But, experimentation would be better.
