Two non-profit organizations from Oakland County are merging – the South Oakland Shelter and Oakland County Lighthouse – to form one of Detroit's largest underground service organizations, focused on poverty reduction and homelessness.
Organizations said the decision to regroup was taking months to come, in part due to the planned departure of key Lighthouse directors, including CEO Rick David, who led the organization for more than three years.
The details are still under development.
However, Ryan Hertz, CEO of SOS, who is now acting head of both non-profit organizations, said that, overall, the union offers both organizations greater opportunities to serve more people and businesses. potentially expand services beyond Oakland County.
"The ultimate goal of the united forces is to create a larger, more robust and multi-faceted organization focused on personal services and a stronger response to poverty," said Hertz. "This plan will enable us to have a greater impact on our communities and better position ourselves to target areas where hunger, homelessness and housing are more pressing needs."
The merged organization is expected to have 45 employees and an annual budget of $ 7.5 million.
In some ways, the combination can also be used as a reference for other non-profit groups.
Non-profit mergers are relatively rare and little studied by academics. However, recent research shows that it could be beneficial for both organizations and the people they serve.
In this case, both groups have a similar size and similar missions, but have different geographic footprints and strengths: Lathrup Village-based SOS builds affordable permanent housing units in southern Oakland County and has a restrained pantry program; The Pontiac lighthouse has put in place transitional housing, a large pantry and other services in the north of the county.
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In addition, said Hertz, there is a critical need for services in southeastern Michigan.
According to the Michigan Food Bank Council, one in five children lives in poverty and more than 20,000 people in the Greater Detroit area, including families, face homelessness.
Jay Love – a former board member of Indiana University's Center on Philanthropy, today the Lilly Family School of Philanthropy – has argued for a increased non-profit consolidation in general.
The benefits, he said, include: savings from economies of scale, overlapping missions, stronger fundraising and new leadership opportunities.
Nevertheless, despite the many discussions about the amalgamation of Oakland County, there are still unanswered questions: How will the consolidated organization be called? Where will it be based? And how will the staff – and the board of directors – be reorganized?
Donald Haider, a professor at Northwestern University, said in a 2017 article: "Not-for-profit mergers that work, non-profit organizations do not merge often because they are often associated with leadership failure, hardship financial and good intentions. "
But, he concluded, more should probably consider combining.
In 88% of merger cases reviewed by one study, nonprofit organizations reported that their organization came out better after the merger, better "being defined in terms of organizational goals and objectives. growing collective impact ".
"Non-profit mergers are very promising," wrote Haider. "Non-profit organizations can and should consider using mergers as an effective tool to achieve their goals, advance their mission and increase their impact."
Hertz said he expects the SOS-Lighthouse merger to achieve all these benefits.
Contact Frank Witsil at 313-222-5022 or firstname.lastname@example.org.
Southern Oakland Shelter
Address: 18505 W. 12 Mile Rd., Village of Lathrup
Mission: The organization runs an emergency shelter with 67 congregations and offers services aimed at relieving the homeless in the metropolitan area of Detroit. To date, it has hosted more than 12,500 homeless children and adults.
CEO: Ryan Hertz
Annual budget: $ 4 million
Oakland County Lighthouse
Address: 46156 Woodward Avenue, Pontiac
Mission: Lighthouse offers programs to help people become independent. Programs include a food pantry five days a week for more than 28,500 residents each year, financial literacy support, job search and networking; higher services; and affordable housing programs, including two-year transitional housing for homeless women and children.
CEO: Rick David
Annual budget: $ 3.5 million