We wanted to share with our readers this excellent blog by Serena M. Powell, executive director of Community Work Services and senior vice president for the New England region at Fedcap. It originally appeared on Bridgespan’s Knowledge Hopper on March 13, 2014. It is part of Mergers that Made a Difference, a blog and case study series curated by Bridgespan, The Catalyst Fund, La Piana Consulting, and Lodestar Foundation. Tune in for future cross-posts with Bridgespan in the coming months!
Advancing the Mission, Not the Organization
By Serena M. Powell
I find the case study of two Boston homeless shelters merging to have greater impact both inspiring and reassuring as my organization starts a similar journey.
On October 1, 2013, Community Work Services (CWS), a $4 million, 136 year-old workforce development nonprofit based in Boston, combined with Fedcap Rehabilitation Services Inc. (Fedcap), a much larger workforce development provider based in New York City with a budget of $130 million and 1,800 staff. CWS is now a subsidiary of Fedcap, but it has maintained a separate identity with its own 501(c)3 status in Massachusetts. In simpler terms, Fedcap is our parent company. I continue to lead CWS as its executive director, and I also lead Fedcap’s expansion northward as its senior vice president of New England.
Fedcap is really big and CWS is small. But in considering a merger, CWS defined success as growing our impact, not our organization. We delivered exceptional services and wanted to touch more lives. We also wanted to preserve our brand and history, create career growth for staff, and find a partner organization that valued poverty reduction through employment. It’s been just over 130 days since the merger. The question is: Did we get what we hoped for? So far, the answer is yes, and then some.
From the beginning, our merger conversation focused on growth, not consolidation. Fedcap was interested in growing its geographic scope by expanding into New England, and considered CWS a possible platform for that growth. They respected and valued our history, liked our programs, and wanted to enhance the CWS brand. The strategic and mission-based motivation for pursuing a merger was our joint key to success.
Next, we got some help. A consultant whom we engaged through support from the Catalyst Fund in Boston, explored the potential of a merger. We identified numerous synergies and ways that we could increase our collective impact. For example, CWS had strong hospitality and culinary programs that could be replicated in other areas served by Fedcap. We both operated businesses in facility maintenance and food service that we wanted to grow. Fedcap and CWS had comparable experience in cultivating donors, which presented an opportunity to fundraise together. Fedcap had a powerful business development model and fundraising and customer relationship management technology like Raiser’s Edge and Salesforce, which would have required a significant investment for CWS to procure on its own. Fedcap also was impressed by our talented staff and wanted to create career growth for them. In addition, the New York based agency was happy for us to maintain our brand and to promote CWS as a Fedcap partner in New England.
Thus in the grand scheme, we got what we hoped for. Yet mergers are rarely easy. In just over four months, we have learned a lot about blending cultures. Although Fedcap and CWS have much in common, large and small agencies think and act differently. The 200-plus miles between Boston and NYC can make communication complicated. We’ve all learned to follow up emails with phone calls and to follow up phone calls with emails. And we’ve learned to work in different gears: to go slow when changes affect the lives of staff, such as benefit plans and HR policies; and to use our expanded tech capabilities and extended network of fellow employees to react quickly when new opportunities arise. Sure, we have had some intense discussions, but in a short amount of time we have built a framework for how to make collaborative decisions, now and in the future.
In fact, we’ve already started to realize a joint vision for success, one that is neither Fedcap’s nor CWS’s, but belongs to our combined organization. Funding and reach have borne fruit: in less than four months, we have doubled our revenues in New England, increased the number of people we serve, promoted our brands, and taken advantage of opportunities that would not have been available to either organization alone. For example, CWS has leveraged Fedcap’s huge capacity in facility maintenance to bid on larger contracts that are open only to Massachusetts-based companies. Members of CWS staff have grown in their responsibilities and are contributing to discussions on new business opportunities and program implementation in other states.
Our merger decision was as emotion-filled as you might expect for an organization with CWS’s deep history, but it was the right one. Our founders wanted to help people struggling with poverty and—much like the leaders of hopeFound who decided to merge with Pine Street Inn to help end homelessness—CWS, by combining with Fedcap, is enabling more people to become economically independent. We all have recognized that the ultimate responsibility of a mission-based organization is to preserve its mission and then advance it.
Serena M. Powell is executive director of Community Work Services and senior vice president for the New England region at Fedcap. Boston Business Journal recognized her as a 40 under 40 Emerging Leader, and the Boston Junior Chamber of Commerce named her as one of Boston’s Ten Outstanding Young Leaders.