In moments of extreme pressure, the efficiency of organizations is not only tested by their ability to endure but also by their ability to redefine their very shape.

This article opens a rare discussion in the nonprofit sector: merging, acquisitions, and the termination of entities as strategic options for making a greater impact, not as signals of weakness.

The content is intellectually derived from an analytical piece published in Stanford Social Innovation Review (SSIR), and has been re-translated and adapted to fit the professional and organizational context in the Kingdom while preserving its intellectual structure and literary rights.

Challenging times require proactive measures. Nonprofit organizations today are facing a highly complex economic and political context, and many of them have begun to consider options that were previously deemed unimaginable: merging, acquisitions, and even organized termination.

Take, for example, the international development sector, which is facing significant uncertainty due to the dissolution of the U.S. Agency for International Development (USAID), a decline in bilateral funding, alongside broader political headwinds. As a result, one recent study indicates that 60 percent of development organizations may be forced to close within six months. Concurrently, efforts to 'align' or 'connect' organizations have begun to emerge, through the establishment of databases for entities willing to consider restructuring or merging.

Although the urgency seems greater among international development organizations, the discussion around restructuring has begun to spread throughout the sector, which in itself presents an important opportunity because restructuring may serve as a space for creativity, and even closure can act as 'fertilizer' nourishing what comes next.

The current moment is undoubtedly bleak, but if we act quickly, it is possible to emerge from this crisis stronger than we were when we entered it—with more resilient organizations, more focused on the most critical aspects of their work, more efficient in extracting the greatest possible impact from every dollar, and more prepared to face the impending inevitable challenges.

Structural Change is Possible

I have witnessed the power of structural change in nonprofit organizations, as well as its challenges.

During my tenure as the executive director of GuideStar, I oversaw its merger in 2019 with the Foundation Center to form a new entity called Candid. This merger brought together the two largest databases globally on nonprofit organizations and philanthropy into one entity. Fast Company magazine described this move as an effort to build 'the ultimate platform for transparency in the nonprofit sector.'

Years later, Candid is now financially healthy, serves millions of users, and continues to develop a more robust informational architecture to support social change.

The process was extremely complex, bringing together 200 staff across eight different offices, and condensing 70 products into a limited number of tools, while maintaining the core value provided by each of the parent organizations. We were fortunate to have extraordinary conditions, as a coalition of institutions intervened to provide $44 million in funding, and we had years to plan for the merger, supportive boards of directors, and a very clear vision for the value we wanted to achieve.

This Western model reflects an advanced funding and institutional environment that is hard to replicate in the same way in many countries, including the Kingdom. In the local context, the realistic alternative presents itself in gradual mergers or operational integration between entities, alongside the role of regulatory bodies in supporting institutional change rather than relying solely on large funding allocated for merging. However, despite all these advantages, I never downplay the difficulties of such processes, and this experience has left its mark and will continue to do so, but no one has said that working in the field of social change is easy.

Where the task of leaders is making the difficult decisions required to build better organizations that can, in turn, build a better world.

Social change can occur through many different structures, and these structures can evolve over time. In personal research, 37 models for social change organizations have been identified. Under normal circumstances, leaders should step back to look at all available options, but in this urgent moment, there is a justified focus on three radical options: merging, acquisition, and organized termination.

Barriers to Structural Change

Any organizational change can be difficult, but specifically, structural change in the social sector carries additional complexities that reflect the nature of this sector. Three main barriers can be highlighted:

Money Capital markets in the nonprofit sector do not encourage organizational dynamism, as traditional fundraising practices tend to promote a competitive and isolated mindset. Funders may complain about the number of organizations, but they rarely invest in the costs of merging or consolidating them. Additionally, budgeting practices often rely on the assumption of perpetual continuity.

This challenge is also present in the local environment, where funding for 'institutional transformation' or 'merging' remains limited, despite existing regulatory trends toward increasing efficiency and reducing duplication. The solution may emerge in the future through empowerment programs and efficiency enhancement of entities or government-supported merging initiatives instead of relying solely on the funding market.

Ego Organizations are made up of people, and these people have material and emotional interests.

In the social sector, individuals' sense of their professional identity is often tied to their organizations. This blurring between self and institution is evident among any team member, and workers may feel a strong personal attachment to specific programs, sites, or projects. This complexity becomes sharper in leadership, where their public image is tied to the organization’s name.

Mental Models Over time, we develop patterns, behaviors, and mental frameworks that reinforce old ways of working. The social sector often falls into an implicit framework that could be called 'the heroic organization,' the idea that social change is achieved through individual, permanent organizations that operate independently. While there is a degree of heroism in this sector, conscious practitioners realize they work within a broader context as part of a system of entities addressing the same social or environmental issue.

Each of these barriers makes structural change more difficult and should not be underestimated. However, each can be overcome with the right amount of foundational currencies for social change: altruism, creativity, and leadership.

Principles of Successful Transformation

Let us consider a set of principles or lessons that could help facilitate the merging, transforming, and renewing of organizations:

1. Start with Purpose

The social sector organizations exist to do good in the world, but the daily challenges facing these organizations can easily pull attention away from that purpose. Therefore, leaders need to periodically recommit to the mission, whether at the personal or institutional level, and this simple step can be profoundly clarifying from a strategic and ethical standpoint.

Periods of crisis tend to bring about suffering, and this time is no exception; however, this suffering can serve as a clear reminder of why we are doing this work in the first place, and it should always be so.

We are not working for the survival of the organization itself, but for a kinder, cleaner, fairer, and more beautiful world. Focusing on purpose shifts our perspective from operational details to strategic thinking and provides a foundation for all upcoming decisions and challenges.

2. The End of an Organization is Not the End of the Work

In any of the three models: merger, acquisition, or organized termination, at least one organizational identity is lost, and for individuals who have tied their sense of self to their organization, this may seem like a betrayal of self or mission, but in reality, it is not.

Organizations are merely temporary vessels for human passion, and the work continues even if the organization does not.

Consider the example of Integrity for America, which was founded in response to the racist riots in Charlottesville in 2017, aiming to develop a new legal strategy to combat hate crimes. In 2021, it achieved a historic judgment, proving the success of its model, and subsequently, it ceased operations, making way for others to continue the work on a broader scale.

This model reflects an organizational culture that embraces 'mission termination' after achieving the goal, a culture that remains somewhat limited outside certain Western environments. In the local context, this concept can be practically translated through transferring successful programs to existing entities, integrating them into national initiatives, or converting them into sustainable projects within larger entities rather than complete closure.

This kind of courage is not easy, as organizations are often likened to families, having their cultures, traditions, special language, and history, making them seem like living beings. In moments of transition, part of that may be lost, and just as families and communities change over time, it is natural to pause momentarily to acknowledge this loss.

Organizations undergoing transitional phases have the opportunity to transform this change into a meaningful human ritual, and when designed well, can turn grief into celebration, much like a funeral that honors a life well-lived.

3. Negotiate with a Productive Mindset

Restructuring processes provide an opportunity to rethink institutions, where many elements are usually anchored in place within the organization, but negotiation opens space for reassessing them.

This diversity of elements can be viewed as complexity, which it indeed is, but with multiple factors comes multiple options.

On the other hand, mapping the interests of stakeholders can be helpful. Leaders of organizations may be at different stages of their careers—one might be willing to relinquish management responsibilities but wishes to remain as a consultant, while a board member may be linked to a specific program or brand.

These differences do not necessarily indicate opposition; rather, they open space for finding points of agreement while maintaining commitment to the mission.

4. Address Asymmetry

In some cases, acknowledging and accepting the existence of power disparities among parties can lead to clearer and more successful transformations, as negotiation becomes easier when parties recognize facts as they are.

Even when one organization has more power, there is still room to find gains for each participating party, and leaders can begin with a simple yet impactful step: express their hopes and fears sincerely and humbly. This becomes even more critical in times of shared pressure, facilitating faster movement among parties and clarifying what truly matters.

Moreover, asymmetry is not limited to power dynamics; strong partnerships can emerge between entities that differ in legal form, strategy, or geographical scope. The important factor is to have genuine alignment around the mission.

Consider the example of KERA, a nonprofit media organization in North Texas, which acquired the for-profit local newspaper Denton Record-Chronicle. In short, this model reflects a high degree of flexibility in integrating the for-profit with the nonprofit sector, which remains somewhat limited in many environments. Locally, we see similar examples in corporate social responsibility partnerships or collaborations between associations and media entities, or joint initiatives between the for-profit and nonprofit sectors, even if it hasn't yet reached the level of direct acquisition.

5. Think of the Ecosystem

We do not operate in this field in isolation, neither as individuals nor as organizations; there is always a broader context 'ecosystem' we move within. Therefore, it is important to consider how your organization’s transformation process contributes to this larger ecosystem.

Organized termination could be an opportunity to highlight the work of other organizations, share lessons learned over years of work, or perhaps allow the organization to make its intellectual assets available under open licenses such as Creative Commons, expanding the circle of benefit.

Questions about the business model and institutional identity often unconsciously constrain us and limit our capacity for collaboration, but restructuring opens a moment where we can shed these constraints and proactively support the ecosystem.

Moreover, the ecosystem itself can support you; merely announcing openness to new organizational models may attract unexpected support from current partners within the same ecosystem. At a broader level, entities like The Wind Down, LaPiana, and The Lodestar Foundation offer resources to support structural transformations.

These entities represent an advanced support structure for institutional transformation, not available in the same form in all environments. Locally, this counterpart shows up in the role of regulatory bodies and national initiatives in empowering integration, knowledge sharing, and supporting governance and institutional development, even if there are no institutions exclusively specialized in 'closing organizations' or restructuring them.

6. Acknowledge Human Needs

Nonprofit organizations are not legally obligated to provide jobs to anyone; the mission comes first, but they carry an ethical obligation to treat people with dignity. Consequently, providing appropriate severance packages, training programs, job transition services, or even redesigning job titles can make the transformation process more humane and feasible.

In fact, effective structural change requires explicit recognition of the self-interests of employees, volunteers, board members, and other stakeholders. However, it should be remembered that self-interest does not only mean money or power; there are multiple dimensions of human needs that must be taken into account.

For instance, if a leader is relinquishing part of their authority in an acquisition, they should consider other ways to grant them recognition, status, or room to work on a project they dream of. Some employees may welcome reduced hours, while others may be willing to take on more responsibilities, and perhaps a board member has been seeking a dignified way to exit for years.

These opportunities can only be uncovered if we ask about them openly.

7. Move Quickly

Most organizations have a set of financial assets that may provide enough time to design an organized transition, which grants the organization negotiating power with potential partners in mergers or acquisitions, or resources to help facilitate an end that leaves a lasting impact.

However, it is all too easy for organizations to hesitate for months, or even years, thereby depleting these resources, leading leadership to find themselves negotiating from a position of weakness and fear, and delays can carry significant human costs.

We can say in this regard that organizations that close abruptly often leave behind a state of chaos.

Take, for instance, Benefits Data Trust, which was founded in 2005 and helped citizens access over $10 billion in government benefits such as food assistance and healthcare. In June 2024, it suddenly announced its closure. In just two months, it laid off 300 employees and closed its call center, leaving thousands without vital support in dealing with government systems.

The message is clear: better endings can be designed, and for organizations facing imminent financial pressure, there is no better time than now to start thinking creatively about different future scenarios.

Leading by Example

In the coming months, we may witness a wave of organizational transformations, many of which will result from a state of necessity, and not all organizations will have the time for deep reflection and meticulous planning. Nevertheless, they can approach these transformations mindfully.

This awareness, in itself, can serve as a model for the rest of the sector: we are not just organizations; we are people united by a common purpose.

When the World Changes… the Sector Must Change

This leadership example may extend its influence as the world changes, and so too must the social sector.

Humanity today faces planetary challenges such as climate change and artificial intelligence that transcend national borders, operate on unfamiliar timelines, and require new ways of thinking about organizational structures, and a greater readiness to embrace flexibility. Consequently, institutions striving to build a better world must evolve to suit the nature of this changing world.

No matter how harsh the big decisions seem, they may be the shortest path to deeper impact if they arise from a deeply honest understanding and a conscious engagement with reality. Between merging, restructuring or even organized termination, the true value lies in what is preserved from impact and what is built upon later.

This article is intellectually derived from a piece published in Stanford Social Innovation Review SSIR, and has been re-translated and adapted while preserving its literary rights.