Acquisitions and partnerships cannot happen simply for the sake of growth. Sure, we all want to grow and expand our impact, but an effective acquisition is one that adds value – not only financially, but in terms of mission-oriented personnel that match your own. There are a few key things nonprofits need to consider when evaluating merger or acquisition opportunities.
For the past 100 years, Lutheran SeniorLife has been dedicated to providing the finest senior living communities and care options for seniors, as well as community-based health, wellness and social services in Western Pennsylvania. One of the ways we’ve accomplished this is by creating a complete, comfortable, full-service experience made possible through mergers and acquisitions. Of course, this kind of growth comes with its own set of challenges, but the secret to success is establishing a solid financial foundation.
Since nonprofits live and breathe their mission, it’s clear when another organization shares the same values. You can easily get a sense of how the organization might enable you to help more people, reach further, and provide even stronger services for the community. For example, we recently acquired organizations providing visiting nursing and human services, and doing so meant choosing businesses that shared our commitment to our mission of providing the best possible quality of life to Western Pennsylvania seniors.
That said, investments like this need to be carefully evaluated by the finance team. In an industry where every penny counts, and budgets are tight, it’s absolutely essential to determine the financial risk and reward of potential mergers, acquisitions, and partnerships. And more importantly, you need a financial technology solution in place that enables this level of analysis.
For us, this meant aligning our infrastructure – specifically, our financial platforms – with that of partners and new organizations in our portfolio. Each of our acquired organizations used a different accounting system, making data collection and review exceedingly complex. So, we centralized core functions and moved all 24 of our entities onto the same, robust platform – Sage Intacct. A cloud-based financial management system, Sage Intacct connected with our clinical health system, HealthMEDX, and thus improved connectivity and flexibility. We’ve centralized our accounts payable, and are able to issue multi-entity vendor payments, which is essential to our model. Plus, we now have financial transparency across our various entities and locations, via customized dashboards. Lutheran SeniorLife’s financial reporting is specific to a nonprofit, multi-location business, with relevant statistical data – cost per resident, staff utilization, and daily patient visits per nurse, week-over-week.
After adapting a digitized financial solution, our team was able to do what we hired them to do: think analytically, and aid in our growth. With financial team productivity increased by 30 percent, the team has been able to eliminate manual processes and allow our staff to spend their time making strategic growth decisions – like who best to partner with next to maximize growth and efficiency whilst maintaining commitment to our mission. As a result, we’ve seen a two percent increase in our operating revenue and a commitment to growth that wouldn’t be possible without these decision-makers.
What’s next? With new technology in place, and our financial team free to make forward-thinking, strategic decisions, we’re able to expand our facilities and ensure we’re not losing any of our quality or personal touch and maximize our commitment to helping seniors live Abundant Lives.