Helping Nonprofits Survive Financial Instability
Nonprofit organizations have similar financial reporting needs as for-profit ventures. They even need to make a profit. But instead of distributing the revenue to stockholders, nonprofits use it to invest in their mission and build reserves.
Nonprofit leaders wear multiple hats and are frequently charged to do more with less. With funding from government and other sources diminishing, many smaller organizations might feel the financial pressure to change the way they operate or combine forces with like-minded organizations through mergers.
InterCommunity, Inc., an East Hartford-based nonprofit health center that provides primary care, mental health, and addiction services, was almost completely dependent on government funding. Changes in reimbursement and funding forced InterCommunity to re-evaluate or face the possibility of closing its doors.
However, actually getting these kinds of mergers off the ground is a challenge that many non-profits have little to no experience with. The process is complex and takes a certain expertise to successfully navigate.
Luckily, through a partnership with Whittlesey, InterCommunity was able to steer through a thicket of financial options and choose a merger partner that broadened its scope and improved its delivery of patient services. Whittlesey helped InterCommunity “evaluate the merger and integrate the financial pieces,” explains Ed Sullivan, a partner in Whittlesey’s Hartford office.
The firm also advised against potential mergers with other nonprofits. In cases where the cultures appeared synergistic; however, Sullivan and his team determined their financial struggles would have hampered InterCommunity’s strategic growth.
Today, InterCommunity offers integrated mental health and addiction services under a behavioral health model, with revenues of $23 million. “We couldn’t have done it without the assistance of Whittlesey,” says Kimberly Beauregard, president, and CEO of InterCommunity.
In addition to managing mergers, many nonprofits also struggle with the issue of succession planning. In order to secure the future of any company, it’s crucial to have a plan in place to replace leadership as they reach retirement age. Unfortunately, only 34 percent of nonprofits have a written succession plan according to a survey by BoardSource. Whittlesey can also help clients plan for the transition before the inevitable day arrives.
With offices in Connecticut and Massachusetts, Whittlesey offers a team of accounting, technology, tax and advisory experts to more than 350 nonprofit clients. In addition to its technology and accounting services, Whittlesey supports nonprofits with forwarding thinking advice, particularly around issues of mergers, acquisitions and succession planning.
A previous version of this story was first published by the Hartford Courant.
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