Arizona's Children Association

Participating Organizations

  • The Parent Connection, Tucson, AZ
  • Las Familias, Tucson, AZ
  • Child Haven, Prescott, AZ
  • Golden Gate Community Center, Phoenix, AZ
  • Golden Gate Community Center Guild, Phoenix, AZ
  • Just For Me, Phoenix, AZ
  • New Directions Institute for Infant Brain Development, Phoenix, AZ
  • Southern Arizona Center Against Sexual Assualt, Tucson, AZ
  • In My Shoes, Tucson, AZ

Please note that all data below was derived from the collaboration's nomination for the Collaboration Prize. None of the submitted data were independently verified for accuracy.

Formation

Merger by which governance, programs and administrative functions have been combined but which may or may not have included the integration into a single corporate entity.
State
Human Services
  • Children and Youth
  • Economically Disadvantaged
  • Families
1999
  • Expand reach and/or range of services / programs
  • Achieve administrative efficiencies
  • Improve the quality of services / programs
  • Financial problems / pressures within one or more of the partnering organizations
  • Advancement of a shared goal
  • Response to a community need
  • Board member(s)
  • Executive Director(s) / CEO(s) / President(s)
8-10
No

How did the collaboration come about?
AzCA has successfully merged with seven other agencies. These mergers have come about at the suggestion of agency board members, Executive Directors or community members who recognized a shared mission and saw an opportunity to advance each agencies mission by collaborating. Each collaboration has occurred with the intent to add new services, skills, and beneficiary populations to AzCA’s “menu” and to spread them to every office and program across the organization.

Was there anything about the formation of the collaboration that made a meaningful difference in achieving later success?
Each merger has allowed us to drive down the cost per unit while increasing the unit delivered while strengthening our agencies effectiveness, spreading best practices, and expanding our reach.

How did you identify your partner or partners?
With the agency strategic plan in mind, we have identified agencies that will help us meet our strategic objectives.

Management

One Executive Director / CEO / President

How did you determine the management structure and who was involved in those decisions? The management structure was based off of the parent agency model, which was determined by the senior management team of the parent agency.

How does the management or oversight structure support effective operations, sound decision making, and planning for the future of the collaboration? The management structure is set-up to support the efforts of AzCA’s strategic plan and meeting those objectives.

How has the management structure yielded improved outcomes?
Yes, the management structure has yielded positive outcomes based on evidence of increasing the amount of participants served, while reducing the cost per unit for serving those participants. In addition, this structure has allowed AzCA to increase the geographic areas we serve.

Challenges

  • Coordinating / merging / integrating operations
  • Creating a shared culture
  • Accepting change

What techniques did you use to address the challenges you have encountered?
How did you arrive at solutions?

One consistent challenge we have encountered in our mergers, is staff resistance to change and fear that the smaller, merging agency will lose its identity after merging with and being put under AzCA’s umbrella. As an agency, we work very hard to ensure the branding and identity of the smaller agency is preserved after the merger is complete. The merger template allows for the identity of the acquired agency to be preserved with its name, logo and brand intact. Governance is preserved in that the Board of Directors from the acquired agency is integrated into the parent group of directors.

Impact

  • Financial savings - Consolidation of management / administration
  • Financial savings - Shared development function
  • Human resources - Increased access to technical expertise (e.g. HR, Finance, IT)
  • Reduction in overall cost per unit of service - Reduction in overall cost per unit of service
  • Able to serve a greater geographic area
  • Increase in number of clients / individuals / organizations served

How have you measured the outcomes (internal impact of organizational efficiencies achieved) and benefits (program effectiveness and impact on community) of the collaboration?
What have you learned through the measurement of outcomes and benefits?

The Bridgespan Group evaluated AzCA’s mergers with the following conclusions:
• On average, each merging group doubled the number of people it served by reducing cost-per-client by more than a third.

• AzCA’s growth in scale and successful integration of each new organization has allowed it to reduce cost per beneficiary from 11 to 40 percent.

AzCA has successfully used its mergers to enter new service areas, new geographies and achieve critical mass to grow more competitively in each community served around the state.

Model

AzCA looks at any merger possibility with a set of 10 key questions that are used as a high-level filter to assess how well a candidate organization fits with AzCA’s strategic goals in terms of service, geography and brand. These questions also assess organizational fit and financial impact. They are as follows:

1. Does it fill a gap in the continuum of our services?
2. Does it strengthen our Board of Directors?
3. Does it provide critical mass in a rural area?
4. Does it allow us to become involved in services that meet the emerging needs/emerging trends of the agency?
5. Does it enhance our critical mass, whether in urban or rural areas, by adding substance to vulnerable programs?
6. Does it enhance our marketability, our reputation, and our branding efforts?
7. Does it enhance our ability to raise dollars?
8. Are the missions, visions and cultures of the agencies compatible?
9. Is the merge or acquisition fiscally viable?
10. What is the financial risk to the agency, short-term and long-term?

This model has proven to be an effective one for AzCA as we have successfully merged with eight complementary agencies that have enhanced our service delivery system across the state. Additionally, a 2009 Bridgespan Group article reported, “Arizona’s Children Association (AzCA) provides a good example of a nonprofit that has pursued M&A strategically and realized substantive value from doing so.”

Efficiencies Achieved

AzCA’s first merger occurred in 1999 and our most recent in July of 2010. One of the main reasons we have merged with seven other agencies over the course of 11 years is due to the success we have had in increasing the number of clients we serve while driving the cost per client down. Each merger has brought with it a diverse funding base, including contract revenue and community donors. We have been able to leverage those relationships to strengthen AzCA’s overall financial picture and put it in a position to attract new resources. At AzCA, 89 cents of every dollar is spent on programs and services. As a result of all seven mergers, we have enhanced our ability to offer a wider variety of services to our clients statewide. Agencies that have merged provide complimentary services, providing a “one stop shop” for many families.

The agencies that have merged in with Arizona’s Children Association have been unique to the communities they serve and are often the only service provider of its kind in the county or in the entire state. Merging with these agencies allows AzCA to share these services and skills with a broader audience, many times in areas of the state with very few resources for families. The following mergers have allowed AzCA to enhance our mission, grow our prevention programs and expand our services across the state:

In 1999, Arizona’s Children Association merged with Tucson-based agency, The Parent Connection (TPC). TPC is a unique family resource center dedicated to the optimal development of every child through a partnership with their parents. Evidence-based parenting classes, workshops, support groups and play-based parenting groups for children and families are offered. Since the merger, TPC has expanded its programs to multiple Arizona counties, now providing services to more than 8,200 families.

The second merger was in 2004, with Child Haven in Yavapai County, which is a crisis nursery program that provides short-term housing and care for vulnerable infants and children up to age six, and sibling groups to age 10, whose families are in crisis and have no alternative resources.
It is the only program of its kind in Arizona.

In 2004 AzCA also merged with Las Familias Angel Center for Childhood Sexual Abuse Treatment in Tucson. Las Familias is the only agency in Pima County that specializes exclusively in the treatment of individuals and their families who’ve been victimized by childhood sexual abuse. Las Familias provides a safe place for survivors to gain strength, learn coping skills and develop trusting, caring relationships.

The fourth merger was also in 2004, with Golden Gate Community Center in west central Phoenix. Within a 22,000 square foot facility Golden Gate currently serves over 10,000 children, youth, adults, and seniors annually through a wide variety of minimal or no-fee programs and services for tots to seniors for the surrounding largely Hispanic neighborhoods. Golden Gate has always been of the neighborhood and seen as a beacon of hope to those surrounded by poverty, gangs and crime.

The fifth merger was in 2006, with New Directions Institute for Infant Brain Development (NDI). NDI provides parents and caregivers with the training and tools to help infants, toddlers and pre-schoolers in Arizona develop a healthy brain and enter school ready to learn. As a result of the merger, not only has NDI expanded across the state, but has also taken its programs nationwide. NDI is now positioned to bring in additional revenue through the sale of its Brain Boxes®, that will help maintain program viability and allow AzCA to reach even more families.

In 2008 Azca merged with our sixth agency, Southern Arizona Center Against Sexual Assault (SACASA). SACASA’s mission is to reduce the trauma and incidence of sexual assault by providing treatment and promoting prevention of sexual abuse, incest, molestation and rape. SACASA, a Tucson-based organization, is the only agency in the state of Arizona to provide comprehensive services for survivors of sexual violence and is now growing its programming into other counties of the state.

The seventh and most recent merger was in 2010, with In My Shoes. In My Shoes’ mission is to ensure that young people experiencing out-of-home care will be supported through their transitional years to develop the competencies to realize their potential as adults.

Each of these mergers has enhanced the agency by:

•Improved the quality of existing services (e.g., enhanced programs, training, and supervision);
•Improved the efficiency in existing services (e.g., use assets more effectively, reduced overhead);
•Increased funding (e.g., gain access to better fundraising capabilities or build effective new relationships);
•Developed new skills (e.g., acquired new program expertise, leadership capacities);
•Entered new geographies (e.g., overcome barriers to entry, build community relationships).

Evolution

Each of AzCA’s seven mergers has come at the suggestion of an agency board member, Executive Director, or community member who recognized a shared mission between the two agencies and saw an opportunity to advance these missions through collaboration. The management structure was based on the parent agency’s model, determined by AzCA’s senior management team. This management structure supports the efforts of AzCA’s strategic plan objectives for service growth and has yielded positive outcomes evidenced by the streamlining of services, increasing the amount of clients served, and reducing the cost per unit for serving those clients. Another important component of AzCA’s strategic plan is to grow its prevention/early childhood development programs across the state, which has been made possible as a result of AzCA’s mergers with prevention/early childhood development based agencies.

As AzCA has gained experience with mergers, we have developed practices and resources for managing past acquisitions and looking for future merger opportunities. These include:
•A regular meeting cycle—five or six times a year—for leaders to discuss when and where the organization should grow, and to evaluate possible M&A candidates;
•Robust internal capability for vetting and integrating acquisitions, as well as solid benchmarks on the costs and benefits of merging, which AzCA can use to raise funding for merger-related expenses; and
•An experienced post-merger integration team that focuses on joining the two cultures.

All nonprofits need to be concerned with economic sustainability, especially during challenging times. AzCA has been very strategic to merge with agencies during a time of strength for the organization rather than during a time of crisis. Merging with Arizona’s Children Association assures long-term sustainability for local nonprofit agencies and provides an infrastructure to grow services geographically across the state. By streamlining the administrative structure of the merged in agency, more resources are available for programs, where they are needed most.

One consistent challenge we have encountered in our mergers is staff resistance to change and fear that the smaller, merging agency will lose its identity post-merger. AzCA’s merger template allows the acquired agency to maintain its name, logo, and brand identity. Members of the Board of Directors from the acquired agency are integrated into AzCA’s Board in an effort to preserve program delivery standards and provide consistency in governance.

Each merging agency has benefited from not only having the ability to reach a more diverse population of clients, but also the ability to reach a larger geographic area, while driving down the cost of doing business. We measure success by looking at whether or not more participants are being reached as a result of each merger while at the same time the cost to deliver services has decreased. Utilizing this measurement has allowed us to determine that all seven of our mergers have been successful.

AzCA is a worthy recipient of The Collaboration Prize for multiple reasons. The first being the fact that our merger strategy is not driven by finances, but instead to expand our services to the youth and families we serve. Each acquisition has allowed AzCA to add new services and skills, and to spread them to every office and program across the organization to better meet the needs of the children and families in our communities. A 2009 Bridgespan Group article reported, “Arizona’s Children Association (AzCA) provides a good example of a nonprofit that has pursued M&A strategically and realized substantive value from doing so.” Within the last 15 years we have grown from a $4.5 million to a $42 million organization and currently serve over 46,000 children and their families annually across all 15 counties in the state.

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