Social Sector Trends in Strategic Collaboration 

In recent years, there has been a growing interest in mergers, acquisitions, and other formal strategic collaborations in the social sector. As nonprofits navigate funding cuts, rising costs, workforce strain, and growing uncertainty, many are looking to use strategic collaboration and formal partnerships to build long-term stability and growth. 

A recent Wall Street Journal article reported that only three years ago, 75% of board members surveyed had never considered a merger. Compare this to the 2026 survey, where 75% of nonprofit board members reported that they had actively considered a merger in the past year.  

Research from the Center for Effective Philanthropy also found that nearly half of organizations surveyed (46%) worry they may have no choice but to close or merge in the near future. While this statistic is concerning, it is important to recognize that the “merge or close” framing excludes a range of strategic collaboration options that can help organizations adapt and thrive. 

Types of Strategic Collaboration 

According to research conducted by America’s Promise Alliance, nonprofits are already decreasing costs, increasing efficiency, and improving effectiveness across a wide range of strategic partnerships that vary in formality, legal process, and extent of integration. 

These types of collaborations include: 

• Strategic Alliances: An agreement between two or more independent organizations to work together on shared goals or programs while each partner stays legally independent.  
• Coalitions: A formal alliance of two or more independent organizations, with shared rules and responsibilities outlined in an MOU, designed to join advocacy efforts, advance policies, or otherwise support sector-wide movements.  
• Shared Services and Co-Administration: A partnership designed to reduce costs and increase efficiency through shared back-end operations, such as technological infrastructure, finance, and/or human resources functions. 
• Fiscal Sponsorship and Joint Venture: A formal arrangement where a more established organization shares resources, strategy, governance, and infrastructure with an aligned entity, while maintaining separate legal status. 
• Mergers: Legally combining two entities into a single organization with fully integrated mission, strategy, staff, governance, and operations. 

From Legacy to Sustainability 

While many formal partnerships continue to emerge from financial necessity, there has been an increase in social sector organizations proactively seeking collaborative arrangements to expand their impact and preserve their mission. According to BDO’s latest benchmarking survey, nearly two-thirds of social sector organizations are considering a strategic partnership in the next 12 months, and almost 20% have merged with a similar organization in the last year. 

However, in a purpose-driven field like human services, it follows that any level of merging will be emotionally charged. Nostalgia and mission loyalty can unintentionally eclipse sustained, long-term impact. Flipping the script from “How do we keep what we’ve built?” to “How do we keep the promise we made to our community?” requires visionary leadership and building consensus across stakeholder groups.   

Marsh McLennan Agency provides a readiness checklist for leaders preparing to navigate the complex politics of organizational legacy and present a compelling case for strategic collaboration to their board. When researching potential partnerships and mergers, consider these sustainability-centered questions: 

1. Strategic & Mission Impact: How will this proposed merger/collaboration advance or risk our mission before we commit? How do we project that combining will expand our reach, enhance service effectiveness, or lower our cost per outcome? 
2. Strategic Rationale: What is the core rationale for merging or acquiring right now?   
3. Liability Exposure: What will the first year realistically look like, and what hidden liabilities might we inherit? Are we acquiring past program liabilities, physical property issues, or claims histories along with their assets? 
4. Cultural Fit: Do our organizations share compatible workplace cultures and management philosophies? How will differences in approach be addressed early on to prevent talent loss and disruption? 
5. Financial Considerations: What do their financial health and loss history reveal under pre-merger due diligence? Are their endowments, foundation grants, or restricted funds transferable and usable after the transaction?  

For a deep dive into pre-merger due diligence, check out Marsh McLennan Agency’s M&A Due Diligence Checklist. 

By understanding your strategic goals, analyzing your current internal and external threats, and carefully assessing potential partners, you can focus on the type of collaboration that will most effectively help your organization reach its objectives. Bringing your board and key stakeholders into these conversations early will help you gain buy-in and make better decisions when considering pathways, reviewing potential partners, and moving through the later stages.  

Conclusion 

Research suggests the social sector is increasingly considering the strategic benefits of formal partnerships. Boards that would not have considered a merger just three years ago are now actively contemplating the possibility. In addition, organizations are exploring a broader range of options, not just the “merge or close” binary. As funding pressures and workforce strain continue to test our sector, organizations that approach strategic partnerships as a proactive tool will be best positioned to protect their mission and impact in the years ahead. 

Strategic Collaboration Toolkits  

• Leading Through Consolidation (Marsh McLennan Agency, 2025) 
• Nonprofit M&A Playbook (Deloitte & America’s Promise Alliance, 2025) 
• Nonprofit Strategic Collaborations and Mergers (America’s Promise Alliance, 2025) 
• Civil Society Strategic Partnership Toolkit (Accountability Lab, 2025) 

Social Current Solutions 

At Social Current, we provide the tools and insights you need to lead with purpose and drive real change. Check out these opportunities to improve your skills. 

• CEO Convening, Oct. 19-21 in Chicago. This intimate event offers learning and networking tailored to CEOs and executive directors of human and social services organizations. By connecting leaders who truly understand each other’s day to day, it creates a safe space for participants to develop relationships, find solutions, and build community. This year’s program includes a panel discussion with social sector experts on mergers, acquisitions, and affiliations. Register by Oct. 6 for our early bird rate.  
• Individual and Team Coaching and Support. Social Current offers customizable consulting and training related to adaptive leadership strategies, as well as creating healthy organizational cultures.  
• On-Demand Virtual Courses. Lead into the future of the social sector with these on-demand courses. This dynamic collection of on-demand courses provides you and your staff with the essential skills and strategies to thrive in today’s ever-evolving landscape. 
• Free Webinar: How Nonprofits Can Evaluate Merger, Acquisition, Affiliation, and Partnership Opportunities. Strategic Impact Partner Marsh McLennan Agency’s Eric Beck will walk participants through the key considerations before pursuing consolidation and how to think about insurance as part of a thoughtful transition strategy. Register to join Nov. 9 from 2-3 p.m. ET.

Enroll now in these courses: 

• Burn Bright: The Resilience Advantage 
• Innovation Leadership 
• Managing Virtual and Hybrid Teams 

About the Knowledge and Insights Center 

Social Current’s Knowledge and Insights Center equips social sector professionals with the research and resources they need to stay current on trends, implement best practices, and improve their organizations. It specializes in vetting information sources and systematizing information so that it is easy to understand. Gain access to the Knowledge and Insights Center by becoming a Social Current Impact Partner, COA accredited, or purchasing access.