Merging Missions: What Religious Non-Profits Need to Know Before Joining Forces

Why It Matters

We’re seeing this more and more. Non-profit transactions are happening across the country. 

Why Most Transactions Don’t Make It

We hate to say it, but most of these deals fall apart. Probably 7 out of 10 don’t make it to the finish line. Why? Because it’s easy for two non-profit executives to grab coffee, dream big, and feel the synergy. What’s harder is digging into the bylaws, navigating membership approvals, and dealing with the logistics of governance.

You might need:

• A Sunday morning vote
• Email notices
• Door-knocking campaigns
• 90% of members present
• 75% of votes from folks who haven’t attended in years

It’s a lot. And that’s before you even get to the legal paperwork.

Due Diligence Is Key

Before you get too excited about a transaction, do your homework:

• Are there environmental liabilities?
• Any there active lawsuits?
• Are there tax liens?
• Are there allegations of abuse?

Approvals You Might Need

• Denominational approval (depending on your affiliation)
• Landlord approval (if leases are involved)
• Government approval – In some states, you need Attorney General sign-off to merge or dissolve nonprofits. In others, you may just need to give notice.

Bottom Line

Non-profit M&A can be a powerful tool for stewardship and growth—but it’s not simple. The organizations that do this well surface the hard questions early, get the right legal guidance, and stay focused on mission alignment.

Want to discuss this issue further? Connect with our faith-based legal team today: Faith Based - Michael Best & Friedrich LLP

Disclaimer

This article includes content generated with the assistance of artificial intelligence (AI) tools. While AI was used to support drafting and idea generation, all final content has been reviewed and edited by legal professionals to ensure accuracy and appropriateness. This article is intended for informational purposes only and does not constitute legal advice. Readers should consult qualified counsel for advice tailored to their specific circumstances and jurisdiction. Laws and regulations regarding AI are evolving, and this content may not reflect the most current legal developments.