Merger as a Strategic Response to Government Contracting Pressures


  • Martha Golensky,

  • Gerald L. DeRuiter


This article describes the planning, decision-making, implementation, and evaluation phases of a recent, successful merger of five small social service agencies in Grand Rapids, Michigan. The merger was undertaken as a conscious strategy to enable the newly formed Arbor Circle Corporation to cope more effectively with environmental uncertainty, especially in regard to government contracting. The successes and the struggles encountered in the merger are instructive for other nonprofits that may be contemplating this kind of organizational restructuring as well as those interested in the impact of contracting on the government-nonprofit relationship.