Merger Activity in the Non-Profit Arts Sector

In light of the decrease in funding sources exacerbated by the recent economic recession and the concurrent rise in competition between nonprofit cultural organizations, a rationalization of the sector is taking place. In the United States, many constituencies are thinking anew about their viability and looking towards alternative modes of operation. Gaining popularity is the merger, which has been touted as a rather complex yet potentially rewarding option. Is merger a solution that today’s arts leaders should implement to alleviate funding vagaries and increase efficiencies? Will it decrease dependence on external support and thereby minimize the threat of “mission drift”, where mission and core values are undermined in the relentless drive to secure funds? What considerations must be made in contemplating such a strategy? This essay examines these topics as well as the potential barriers precluding merger operations.