According to an August 25 article in the National Law Journal, a difficult economy, which has translated into competition amongst nonprofits for dollars and fewer volunteers, is making nonprofits and industry trade organizations consolidate. Attorneys who get involved may utilize the skills of a psychiatrist to address the difference in culture between groups, as well as the skills of tax experts and due diligence investigators to protect governing boards on Sarbanes-Oxley issues. According to one expert cited in the article, many mergers are driven by the leadership of the two organizations that want to reduce dues obligations and commitment of volunteer time. They must meld governance, dues and benefits and sometimes get members as well as boards to agree to the deal. The mergers require financial due diligence investigations to avoid board liability, and can include intellectual property and pension issues. The article noted that although high-profile mergers are getting attention, many smaller mergers are taking place as well. Nonprofit combinations raise some of the traditional concerns of for-profit corporate mergers: difference in cultures, board members, location of the organization, changes in services, technology, investment portfolios and tax questions. In the health care industry, one issue is that of major funding groups, such as the National Institutes of Health and the National Center[s] for Disease Control [and Prevention], both of which are confronted with grant requests from different groups that are all treating the same health conditions. The funders are asking the groups to come together regionally under one nonprofit umbrella group to accept the grants.
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