Examine the other organization honestly before you commit, because in a merger you take on everything it is, including what it has not told you.
In Merge or Be Acquired, after fit looks real, with a nonprofit attorney and an accountant.
Examine each area, with professionals where noted.
| Area | What to examine | Clean, or a concern? |
|---|---|---|
| Finances (with an accountant) | statements, debts, cash, restricted funds, obligations | |
| Legal (with an attorney) | standing, liabilities, lawsuits, contracts, leases | |
| Programs | true state, quality, outcomes, sustainability | |
| People and culture | leadership, staff, morale, how they really operate | |
| Commitments | grant obligations, funder relationships, promises made |
If diligence turns up undisclosed debts, legal exposure, a broken culture, financials that do not hold up, or a mission that on closer look does not align, stop. Stopping is a success of the process. Letting sunk time push you forward anyway is exactly how bad mergers happen, and a well-founded no is a good outcome.
Due diligence is working when it gives you a clear-eyed picture of what you would be taking on, before you commit rather than after. If it surfaces a deal-breaker, the honest answer is to stop or renegotiate. Feeds the Merger Terms and Approval Guide.
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