Does fundraising dip when nonprofits merge?

According to the Arkansas Democrat Gazette, there are 1,297 United Way organizations. In the past three years, 81 of the agencies have merged "in search of the efficiencies found when private companies streamline."

Nationally, other nonprofit organizations also are consolidating. Girl Scouts USA is hoping to shrink from 312 councils to 109. Red Cross chapters are also merging across the country in attempts to reduce costs by cutting overhead.

Ironically, while costs may be reduced - there appears to be anecdotal evidence that fundraising is also reduced following a merger.

The United Way of Northwest Arkansas formed July 1, combining the 14 employees from the United Way of Washington County and United Way of Benton County.

The group’s $ 4. 5 million fundraising goal, announced earlier this month, is $ 100, 000 less than the separate bodies collected last year.

“There is uncertainty at first, but after two or three years, it goes back up,” Darling said. “I’m hopeful that we won’t see that dip, but we aren’t going to raise a lot more money just because we’ve merged together, either.”

The United Way of America has never researched the short term impact of mergers on contributions, but the national organization says it is interested in looking into it.