The Nonprofit Leader's Guide
We want to bring you the thoughts of some of the most impactful leaders in health and human services. Their real-world experience in driving growth and impact and leading in hard times might be just the extra dose of motivation and common sense you need to bring to your organization whether you are an Executive Team member or the Board President. We think that leading the conversation about the nonprofit business sector and what nonprofits should think about now is part of our mission, “Building A World that realizes the boundless potential of all people.”
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The Nonprofit Leader's Guide
When Two Missions Become One: How Mergers Expand Services for People with Disabilities
Navigating nonprofit mergers requires strategic vision, cultural alignment, and unwavering focus on mission. Diane Beastrom, consultant and former CEO of Koinonia, takes us behind the scenes of a successful merger that dramatically expanded services for people with developmental disabilities.
After leading Koinonia for decades and orchestrating several acquisitions, Diane faced a pivotal decision: despite emerging from COVID in a position of strength, the organization needed to expand behavioral health and mental health services. "Going alone was not going to be the best way for the people we support or for our employees," she explains. This realization led to seeking a larger partner already delivering these specialized services.
The merger between Koinonia and Boundless demonstrates how thoughtful integration can benefit everyone involved. All Koinonia employees were retained and immediately received enhanced benefits and compensation. Clients gained access to expanded behavioral health supports and a beautiful new day center. Behind these successes were careful attention to cultural compatibility, transparent communication about leadership transitions, and early resolution of potential sticking points like board composition and organizational naming.
Diane offers invaluable guidance for nonprofit executives contemplating similar moves: engage specialized consultants early, prepare your Board thoroughly, and shift perspective from "what are we giving up?" to the expanded mission impact possible through strategic partnerships. Her refreshing take on legacy reminds us that organizational names and buildings matter less than sustainable services to those who need it most.
Whether you're leading a nonprofit considering strategic partnerships or simply interested in how mission-driven organizations evolve to meet changing needs, this conversation offers practical wisdom from someone who's successfully navigated the complex terrain of nonprofit mergers.
Boundless' mission is building a world that realizes the boundless potential of all people. In recognition of that mission and the fact that we can't do it alone, we are closing this year's podcast season with a three-part series on mergers, acquisitions and partnerships and how they improve our services. Welcome everyone. I'm your host, scott Light. So today we are talking with Diane Bistrom, whose very title gives you a hint at her deep, deep expertise. She's a consultant and formerly the VP of Transition. I love that title, diane. Welcome to the podcast. Thanks, scott, good to be here. I also have a list of some key factors that contribute to successful collaborations. We're going to talk about that as well in just a little bit. But, diane, let's step back in time a little bit. We're going to jump in the Wayback Machine here and let's talk about your role when you were CEO of Koinonia. So before Koinonia became part of the Boundless family, what was the mission there?
Speaker 2:Koinonia's mission was to partner with people who have developmental disabilities and other complex conditions so that they could have full lives in the community through integrated whole person care. So we were focused on the whole person and for them to have their best life.
Speaker 1:I asked you, before we started recording, what that word meant. You said it's a Greek word.
Speaker 2:It is Koinonia is Greek and it means community fellowship and integrated care and interdependence.
Speaker 1:Okay, did you come up with that, or was the company already named that when you came aboard?
Speaker 2:No, it was already named Koinonia.
Speaker 1:Okay, let's talk a little bit more about services. You talked about that in a broad scope, but let's go into the services that were provided by Koinonia, and then let me layer onto that. What was the culture like?
Speaker 2:So from the very beginning, Koinonia started predominantly with residential services, but they were all community-based. There were homes in the community you would drive by them and you would not distinguish them from any other neighbor them and you would not distinguish them from any other neighbor. And we expanded those into a whole variety of these homes throughout Cuyahoga County, provided supported living services, vocational day services, employment, and later developed transportation and some other services.
Speaker 1:Okay, and do you want to talk about the culture a little bit?
Speaker 2:Koinonia's culture from the very beginning was that of being innovative and actually a pioneer. Koinonia started when the services that we ended up providing and that still exist today were not commonplace. People with developmental disabilities had very few options if they needed some support or out-of-home placement, and so innovation and being a pioneer to develop what doesn't yet exist but could exist was really at the foundation, and we've done that through a culture of teamwork and transparency and, you know, really trying to listen to our customers to see what they and their families wanted and how we might help answer that need for them.
Speaker 1:It's been interesting with this three-part series that I mentioned, because all of the experts that we have had on come back to several key attributes. But transparency and communication boy, those are just key, and I know we're going to talk about both those things as we go here. Let me ask you a why? Kind of question here what were some of the reasons you were looking for a merger partner and what attributes were you seeking from that potential partner?
Speaker 2:Well, to answer that, I really need to start with. A merger and acquisition was not new to Koinonia. I had less six or seven of those over the decades that I was the CEO with Koinonia. Those were really different, though. Those were where we identified agencies or they actually sought me out to become part of Koinonia, and that was to expand and grow our services and to be able to collaborate and be able to provide services more efficiently. With Boneless it was really different.
Speaker 2:You know, koinonia came out of COVID strong, although different, very different than we were pre-COVID, and we had a very robust strategic plan and while we were very happy and intended to continue our residential services and the day and vocational, all of those things that I mentioned, we were looking at the people that we served and we knew they needed more that was not necessarily easily accessible in the community, that was tailored to people with developmental disabilities.
Speaker 2:So we were looking to grow our services and expand into behavioral health and mental health and, you know, physical care and all that kind of thing, and after trying several things, we realized that you know, organic growth is really slow, it can be very expensive and there's nothing certain about if you actually will achieve the outcomes that you're looking to do and do, and there is a saturation of providers, not only in Ohio but across the country, and we just knew that going alone was not going to be going the best way for the people that we support or for our employees, to be honest, and so we came to the realization that, rather than bringing on smaller organizations to be part of Koinonia, we needed to change the conversation, where we were seeking out a partner that would be larger than we are, that are already invested in, committed and doing some of the things that we had hoped to develop and grow that way to expand and fulfill our mission.
Speaker 1:Interesting, all right. So let's talk about those key elements that I kind of teased at the top here. So I was looking at nonprofit times and they said several things here. But successful collaboration needs strong leadership, needs, buy-in, needs, that vision for the future, and you've touched on that a little bit and the article pointed to six key considerations and they go like this Mission alignment, clear communication he talked about that honesty, what defines success, the financial and legal implications, and then ongoing governance and transparent decision-making processes. So when you think about those six factors and again you've organically already hit on several of them what were some of the key questions that needed to be answered before Boundless and Koinonia could move forward together?
Speaker 2:That list of the six considerations is so fundamental, and it's so true that we knew and learned this through some earlier mergers that we needed to find alignment in our culture, because everything else can look great, but if you can't see yourselves working together, if you don't have similar goals and approaches and considerations for the people you serve and the staff that work there, it's going to be an uphill battle all the way. So culture was something I learned very early on that there needs to be that alignment. Culture is very difficult to shift and a lot of times there's very high resistance to it. So that was one thing that I was looking for. I was looking for an organization that in itself was stable and strong, great reputation and that, as I mentioned, was already doing some of the things that we were trying to do or had started to do that we could help contribute to, but where they could also then invest in the people that we were serving in a different part of Ohio.
Speaker 1:Interesting. Let me flip that question. Would you mind sharing maybe a sticking point or two and then how those things were resolved?
Speaker 2:can sound like a very dangerous word, so you have to get over that. Considering a merger doesn't mean that somehow you failed or that you're betraying your organization, and you need to just get right with that and feel real comfortable with it. Another thing, though, is you have to really look at why am I doing it? Am I doing it for the right reasons? Your board has to be in alignment and has to be supportive. I was very fortunate because my board, having gone through several strategic plans together, we've had this conversation. We had done some research and so forth about what is the lay of the land and going forward, and so they were really supportive.
Speaker 2:The sticking points that often make a deal conversation fail is what will be the board composition, what happens to the board that's being merged into the organization, who will be the executive leader and what will happen to the organization's name. So we knew the answers to those right up front. We knew that I was not going to be the CEO, I knew that Coinio was not going to be the organization's name, and we worked with Boundless to ensure that at least a couple of our board members had a very small board, could come forward and join the Boundless board. So often those are sticking points that don't get addressed up front, and we were able to talk about that at the very beginning. So that kind of cleared the air a little bit to talk about other things.
Speaker 1:Let me layer on to sticking point with the word surprise. Was there a surprise or two that maybe you didn't see coming around the corner?
Speaker 2:I think a surprise can be that it's very easy, with all the best planning that you have, to underestimate the amount of work that is involved in actually integrating. You know the hard work starts after you've signed the papers and identified the date that you go forward as a joint organization. So there is a lot of work. We, I think, maybe thought that some integration elements might be easier because maybe we had shared software, we used the same vendors and those sorts of things, and you know, none of our organizations are overstaffed at any point in time, and so people have to multitask and have time dedicated to do the the integration work while they're also doing their other job. So as much as we thought about that and talked about it, I think that we were perhaps caught off guard at times of okay, this is going to take a little longer, maybe this is going to go in a different sequence than maybe we had originally had hoped.
Speaker 1:Okay, when was the merger final?
Speaker 2:October 1st 2023.
Speaker 1:Got it. Let me ask you this what were some maybe I'll call them special practices services or attributes that you believe Koinonia then brought to Boundless?
Speaker 2:Koinonia brought to Boundless several things that I think were very valuable. One is we had over 40 years of presence and experience in Northeast Ohio, specifically Cuyahoga, but some surrounding counties Boundless didn't have a big presence there. We had a very strong reputation for the services that we provided. We had some really great employees and key managers and leaders, and that adds value. That's not on the balance sheet right, so I think that helped fill some gaps perhaps that Boundless was dealing with, because we all had, you know, positions that needed to be filled. I think that we brought to Boundless a shared, you know, interest and appetite for innovation and thinking of things in a new way. So I think that those are some areas where we could add value by bringing the energy to keep it going, and they did not need to bring us along. We were ready.
Speaker 1:We were ready to go. You mentioned your people and having some great people just up and down the entire chain, the entire ladder right there. Let me ask you about that what benefits do you think were realized by the staff and also by people served since then, since the merger?
Speaker 2:We knew right away through the due diligence process that the employees were going to see a substantial benefit as a result of this merger size and other particulars. Boundless had a richer benefit plan and their medical insurance and their pay scale and those sorts of things that the former Koinonia employees immediately benefited from, and that was something that was really important. You know, it was really important that this is not typical, but all Quintinian employees were brought forward.
Speaker 2:That doesn't always happen in a merger, but it also shows that we covered a different territory. People's jobs were important and needed, and so they all came forward For the people that we serve. We were very clear with Boundless that what we were looking for in terms of especially the behavior supports and the mental health services, there was something that we had started and we had put in place but had not really expanded it yet, and that we were really looking for that, and they were able to bring that to bear. They had some expertise and some new ways of providing services and alternate billing and funding. That was very valuable. And then, more recently, we just opened a state-of-the-art, beautiful day center for people who are looking for day services and that just opened recently. So people are benefiting from this really beautiful environment and robust services.
Speaker 1:Let's bring it to present day. I've mentioned this three-part series several times here and in each one we've talked about really there's some tumult out there in terms of funding and in this M&A world that is not just in the nonprofit world, but is largely happening in the public and private sector too. Given the uncertainty, especially when we're talking about federal and state regulatory agencies, we're talking about the funding landscape what's your best advice to organizations that may be considering a merger?
Speaker 2:Then I think they're being very brave and wise if they're actually considering it. My biggest concern is with those who aren't considering it and just think we're just going to go it alone and we'll just kind of push the system. We hear about Medicaid all the time.
Speaker 2:It's the safety net but it comes with a price that doesn't have the ability to forever expand.
Speaker 2:So I think those that are considering it I really give them kudos for doing that it's important, in my opinion, to get the right consultant very early on.
Speaker 2:That was something I did and I was really glad that I did A consultant that knows merger acquisitions, especially in the nonprofit social service sector, and that really knows the providers across the country, Because you may or may not end up merging with an organization that's home-based is Ohio. So kind of casting a broad net and have that consultant help guide you through the process what to expect, how to interpret some of the things that you're experiencing and so forth. But those who are considering mergers really need to do a lot of work with their board so that they understand, they support it, they understand what it would mean and there is a really clear value that they perceive because too often, even getting into the merger conversation, there's a focus on what are we giving up, what are we losing Only seeing kind of the debit column. And yes, there are some things that need to change, but if you're finding the right partner and doing it for the right reason, the positives really will outweigh that significantly.
Speaker 1:You mentioned the word partner. Let me expand it to partnerships. Can the right consultant or consultants are they good to bring in to help vet a good partnership? A good partnership.
Speaker 2:Absolutely, and that's exactly what I did. And it just so happens in our case which also may not be typical that both Boundless and Koinonia shared the same consultant only because we had prior relationships with her and she knew both of our organizations. We trusted her and were comfortable with that kind of shared representation, so to speak. But that is what they will help you do. They'll help identify who they believe would be a good partner. They can start some of the anonymous early conversations to see if there's a fit and again guide through the process.
Speaker 1:Let me ask you about legacy, about nonprofits are looked at as just doing good work, doing terrific altruistic work out there. How do you preserve those things again in this world that we're living in, where sometimes you got to get bigger, You've got to come to the major leagues, so to speak?
Speaker 2:Yeah, Legacy is really important because nonprofit work is really based on. You know legacy is really important because you know nonprofit work is really based on. You know we all need to be super committed to the mission and what is the work and you know, often that's what helps drive people forward. Legacy takes a lot of shapes and forms. It doesn't have to be a building, it doesn't have to be an organizational name, it doesn't have to be so. You know legacy is who.
Speaker 2:I think also, who do we invest in and how do we invest in them? You know a legacy that has a particular set of board members or that has a building with a particular name on it. You know we went through, we had our name on a building that our office was in and it needed to come down at a point in time and there was a little feelings around that. But it was an important move, you know, and we were ready for it because we knew that we were becoming this new organization. So legacy, I think, comes in the preservation and the expansion of your mission and we're here to serve people. How do we serve more people better in the ways that they want to be served? And often, you know, doing that in a combined fashion is the best and actually fastest route there.
Speaker 1:One of the things that we always try to think about is who's listening to our episodes? And I want to close with a question like this, because, again, you're such a seasoned nonprofit executive huge, broad range of experience and expertise and I'm thinking if there's, let's just say, a young nonprofit executive huge, broad range of experience and expertise and I'm thinking if there's, let's just say, a young nonprofit executive and they're looking for just some one-on-one advice from somebody like you, what is that one-on-one that you would say that young executive in this day and age when it comes to managing and maybe growing their nonprofit?
Speaker 2:I think the young executive needs to really always be clear and centered about how they perceive their job, what they think they're there for and who their customer really is. The executive is there to serve its staff. I always perceive my staff as my customer. The people that received our services were then their customers. And then we have the community and we have other stakeholders and we have funders. What do people want, what do people need?
Speaker 2:And I kind of grew up with a servant leadership kind of approach that take a position of service, take a position of looking externally rather than internally first and hopefully that North Star can help guide decisions that are going to be very difficult at times and, you know, maybe first time, having to think through. Seek outside support. Find a mentor it could be informal, it doesn't have to be a paid consultant and you know. Find someone that you can just talk to openly and, you know, feel confident that there's, you know, confidentiality with it. And seek out a variety of people because there are a lot of perspectives and there's a lot of experience there. And just expose yourself to trade associations where you can get involved. Don't just look within your organization, because there are so many people that really are generous and wanting to help and want to support and want to see other people be successful. We need to bring each other up.
Speaker 1:Yep, this is a fascinating conversation. Hopefully, for our listeners, it lifted the curtain on what we do, what nonprofits do and, broadly, what we can all do to increase the impact on people, for people and the communities that we all serve. Diane, thanks so much for joining us.
Speaker 2:Thank you.
Speaker 1:We hope you enjoyed this three-part series on nonprofit mergers and acquisitions. Next season we will, of course, offer further thoughts on nonprofit leadership, just as a whole the whole picture out there when it comes to leadership for nonprofits. So join us to learn from our experiences and from other dynamic leaders out there, as well, as always, to our listeners. We thank you for joining us. This is the Nonprofit Leader's Guide podcast brought to you by Boundless.