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Nonprofit merger – United Way brokers deal

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 By Todd Cohen

WINSTON-SALEM, N.C. — Two local nonprofits that serve disabled people have agreed to merge, reflecting a growing effort to streamline the nonprofit sector.

The combination of The Enrichment Center and The Arc of Forsyth County will result later this year in a single group, known as The Enrichment Center.

The merger was negotiated by the United Way of Forsyth County, which is helping to negotiate possible mergers involving two other sets of nonprofits.

“There may be dollars saved over the long run, but we really view this as an effectiveness initiative, one that will enhance the ability of the two organizations to achieve their missions,” says Ron Drago, United Way president.

“The pendulum has been swinging for some time from a period of expansion in the number of nonprofit organizations to one of contraction,” he says.

That shift also reflects an increasing emphasis on the part of funders and nonprofits to focus on and demonstrate the impact of services, he says.

The Enrichment Center, formed in 1983, serves people with developmental disabilities through arts and jobs programs. The organization originally was created by parents who were members of the Arc, formerly the Association for Retarded Citizens.

The Arc, formed in 1964, provides advocacy, education and support services for individuals with disabilities and their families.

So the merger brings the two organizations back together again. The merged group will be an affiliated chapter of the Arc, a national organization.

“It’s consistent with what we’re seeing in Arcs all around the country that combine advocacy with the provision of direct services,” says Susan Reeves, executive director of The Arc.

Drago says the merger “will create a fuller continuum of services in a more integrated management system to serve what in fact have been a larger percentage of common clients between the two organizations.”

The United Way initiated discussions between the two nonprofits, and Planning Edge, a  Winston-Salem strategic-planning consulting firm, assisted in the process.

The merger also is the direct outgrowth of a grant that the Kate B. Reynolds Charitable Trust awarded several years ago to a handful of Forsyth County groups, including the Enrichment Center and the Arc, that work with people with disabilities. One focus of the grant was to encourage those groups to work together more closely.

Dean Caldwell, chairman of Arc’s board and president of Kaplan Cos., says the merger is “the way of the future.”

“There are smaller organizations like this that are having to devote a lot of time to keeping up with administrative and daily operational chores,” he says. “By combining operations, we feel it will become a more effective model to better serve the community.”

Ched Neal, chair of the Enrichment Center board and president of Regal Ford, says the merger is designed “simply to be able to provide better service to the disability population.”

The combined organization will be housed in new headquarters being developed by the Enrichment Center in the former Jones Bakery on South Marshall Street near Old Salem and the N.C. School of the Arts. The building should be renovated by the middle of 2001.

For the first year of the merger, the boards of the two groups will be combined, with the chairs of the current boards serving as co-chairs.

A search will be held for an executive director for the combined group.

Sandy Seeber, executive director of the Enrichment Center, announced before the merger agreement that she planned to leave the organization to pursue other interests, while Reeves of the Arc plans to continue working for the merged organization in another capacity.

The combined organization is expected to keep the more than 20 staff members employed by both organizations.

“A commitment has been made to retain all the staff, although not necessarily in the same role in which they have been working,” says Drago of the United Way.

The consolidation will eliminate overlapping positions that have handled similar duties at the two organizations and allow investment in specialized jobs that neither organization has been able to afford, particularly in the areas of marketing and technology, he says.

Drago says the merger shows the United Way’s ability to “focus resources and achieve outcomes or impact in the community.”

In recent years, an increase in the number of nonprofits has resulted in a “high degree of specialization,” he says.

“While that represents a great deal of responsiveness and support,” he says, “it doesn’t always lend itself to the most effective and beneficial way to deliver services.”

At the United Way, he says, “we’ve incrementally been about becoming more focused.”

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