How 'For-Profit' Strategies Can Benefit NGOs
On November 28th, Plan International USA acquired the Centre for Development and Population Activities (CEDPA) and agreed to combine assets to boost existing programs, especially in gender mainstreaming and youth development. This move, according to Plan International USA's President/CEO Tessie San Martin, will not only maximize the impact of Plan’s projects, but it will also strengthen Plan’s resiliency to the global economic volatility.
San Martin explained the challenges of the acquisition to Devex and how this merger is different from a pure commercial merger. Because the partnership involves a nonprofit, there are clauses and provisions that involve money.
“In the commercial side, the journey is based on risk and reward — if it goes well, you profit, if not you declare bankruptcy, dissolve and move onto another venture. But when you’re getting money from donors, you’re not saying ‘give us your money and we’ll take the risk’ but ‘give us the money and we’re going to do something really good with it’ so bankruptcy here is very difficult,” San Martin said.
Nonetheless, she has stressed that the nonprofit sector should start viewing acquisitions as a strategic and not a defensive tool. Such types of partnerships can equip Non-governmental Organizations with “enormous” capabilities that can help maintain independence, enhance efficiency, and improve financial health.
“Often times because we’re so focused on doing good and fulfilling our mission, we don’t think enough of our long-term view when it comes to making investments in ourselves. We need to start looking at acquisitions as strategic tools much more seriously than we have,” San Martin said highlighting the need for such measures in this uncertain time.
The partnership with CEDPA is also expected to deepen Plan’s expertise in leadership training and capacity building, enhance the impact of its women’s leadership programs, and increase the organization’s visibility to donors and other partners by leveraging CEDPA’s presence all over the world, including in Nigeria, where Plan does not have operations.