Presented by the Global Remission Coalition
Nonprofits around the world are in survival mode. Many need to fundamentally rethink their business models to come out on the other side, and that includes examining the pros and cons of mergers and acquisitions.
Also in today’s edition: On the surface, the integration of HIV/AIDS services into general health systems makes sense, but dig deeper and you’ll uncover a very different narrative.
The complexities of combining forces
Mergers and acquisitions, or M&As, are not monolithic. They’re an intricate dance that’s unique to the different players involved. And they’re already complicated enough for for-profit companies, but they come with a whole different set of nuances for nonprofits, many of which are facing an extinction-level event in this era of aid pullback.
So is the M&A route the answer to surviving this historic reckoning? As with any highly complex endeavor, the unsatisfying answer is: It depends.
There are a plethora of factors at play. Does a full-fledged merger make sense, or some other type of consolidation, such as sharing back-office functions? Do you keep the brand intact or construct a new identity? Who will form the board? Will there be redundancies? Will all services continue? How can an organization shift to become more entrepreneurial?
A panel of experts recently tackled these thorny questions in a Devex Pro briefing that explored M&A strategies for nonprofits.
Daniel Speckhard, CEO of Corus International, warned that a full merger brings major challenges. Staff in different organizations may have very different cultures, for example, while individual brands may be valuable to preserve.
But even seemingly simpler arrangements such as sharing back-office services come with challenges and won’t happen overnight. While panelists agreed there are potential cost savings, they also pointed out how long it would take to align back-office systems such as HR, finance, and IT.
And while many nonprofits turn to M&A during moments of weakness — this moment being a prime example — mergers and acquisitions were already ramping up even before recent events.
Karl Hofmann, whose HealthX Partners acts as a holding company for two major nonprofits — Population Services International, or PSI, and the Elizabeth Glaser Pediatric AIDS Foundation — said that even before the recent events, funders had been pushing hard for more mergers to happen.
“Like many organizations, PSI had explored merger conversations for some years,” he said. “We’re not deaf to all the signals that are coming from the funders and the entire ecosystem about how there needs to be more consolidation. There are too many players in the sector. There’s a lot of inefficiency that results from that.”
Read: Merge, adapt, or close? How might nonprofits respond to tough times? (Pro)
+ For more candid, exclusive conversations with nonprofit funders, business executives, and bilateral and multilateral policymakers, sign up for Devex Pro with a 15-day free trial today and get immediate access to all our exclusive briefings as well as a deeper analysis of the development sector with expert reporting like you’ve never seen before. Check out some of the content exclusive to Pro readers.
Some things should be kept separate
Integration should be a worthy goal in development, right? Not according to some HIV/AIDS advocates, who say that trying to hastily integrate high-risk populations — including members of LGBTQ+ communities, sex workers, and people who use drugs — into general health systems could backfire.
This integration push has gained steam in the wake of mass aid cuts, but activists warn that folding HIV services into broader public health systems could force vulnerable populations into overstretched facilities and expose them to the very stigma that targeted programs were designed to shield them from, my colleague Sara Jerving reports.
Yvette Raphael, co-founder of the Advocacy for Prevention of HIV and AIDS in South Africa, says that while people are being told to welcome HIV service integration, “mobile clinics and drop-in centers exist because of your stigma.”
“Integration means being shoved into an overburdened health system, neglected for decades … only to be ridiculed for our HIV status, for our gender identity, for our sexual orientation, for our age,” she says. “Integration is not a solution. Let’s be honest, without the decriminalization, the accountability, the funding needed, ‘integration’ will be a death sentence for us.”
Read: Why ‘integration’ has become a ‘dirty word’ in HIV programming
+ For more insider reporting on global health, sign up for Devex CheckUp, a free, Thursday newsletter — and get today’s edition in your inbox soon!
A climate win in court
The judicial opinion may not be legally binding, but it is historic nonetheless. The International Court of Justice ruled yesterday that climate change is an “urgent and existential threat” to human life and natural ecosystems, and that high-emitting countries have “additional obligations” to take the lead in combating it.
That decision paves the way for lawsuits by low- and middle-income countries to seek reparations for damages caused by high-emitting wealthier countries, whether through reconstruction or compensation, my colleague Jesse Chase-Lubitz writes.
The case was brought to the ICJ in 2023 by a group of small island states, led by Vanuatu, that feared they could be swallowed up by rising sea levels and other climate disasters. It was a win for these climate-vulnerable nations.
“This historic legal decision from the ICJ gives us hope that communities, especially women and girls on the frontlines of this crisis, will finally be able to fight back for justice and accountability,” says Flora Vano of ActionAid Vanuatu.
So what’s next?
“We will now take the ICJ ruling back to the United Nations General Assembly, and pursue a resolution that will support implementation of this decision,” says Ralph Regenvanu, minister of climate change for Vanuatu.
Read: Top UN court says states have legal duty to act on climate change
A family affair
Just because the United Kingdom dramatically slashed its aid budget, that doesn’t mean it’s shied away from the debate over how the development sector can — and must — evolve.
“It was always going to be the case that development needed reform,” U.K. Foreign Secretary David Lammy said during a recent meeting of Parliament. “That is not just reform here in the United Kingdom, but reform across the family of nations that we largely describe as the West.”
“Clearly, changes to the United States’ posture on aid have forced that reform; clearly, when you see Germany cutting humanitarian aid by 53%, Belgium cutting aid by 25% over five years, France cutting aid by 36% and Canada, the Netherlands, Sweden, and Switzerland all cutting aid, the system requires reform,” he added. “I wish we had been in government three or four years ago and leading that reform, but we were not.”
Lammy was a bit more wishy-washy when it came to the specifics of his own country’s cuts.
When pressed on whether his government intended to continue a long-standing commitment to prioritize aid that supports women and girls, Lammy said he was in the middle of a “line-by-line” review of aid priorities and could not promise to uphold those of the previous Conservative government.
Read: UK foreign secretary strengthens his push for aid reform
Unstable mandate
In 2018, the U.N. Security Council expanded the stabilization mandate of the U.N. mission in Mali, known as MINUSMA, to regions engulfed in intercommunal conflict, terrorism, and institutional collapse. “We had no additional resources, but the expectation was clear: Deliver ‘stabilization,’” writes Hama Amadou Oumarou, a U.N. vet who served as chief of stabilization and recovery and senior program manager with MINUSMA.
“That 2018 moment crystallized the gap between political aspiration and operational reality — between mandates written in New York and the dynamics unfolding in villages like Ogossagou or Koro. It highlighted how Security Council resolutions often struggle to account for the complex interplay of local grievances, armed group agendas, and fragile state authority on the ground,” he explains in a Devex opinion piece.
Indeed, by early 2024, MINUSMA had been kicked out of Mali altogether, a multipronged failure that should force the U.N. to reexamine what stabilization means in fragile settings such as the Sahel, according to Oumarou.
“Stabilization is not a checklist of outputs,” he writes. “It is a long-term, negotiated process that requires humility, flexibility, and deep local engagement. As attention shifts from military deployments to political settlements and community resilience, we must shed one-size-fits-all models and meet fragile societies on their own terms.”
Opinion: Stabilization missions have a lot to learn from Mali and the Sahel
In other news
Starvation threatens over a million people in northeastern Nigeria as food aid runs out amid a surge in jihadist violence, blocked humanitarian access, and international funding cuts. [France 24]
U.S. Sen. Rand Paul has reportedly delayed the Senate Foreign Relations Committee’s vote on former national security adviser Mike Waltz’s nomination for U.S. ambassador to the U.N., citing concerns over Waltz’s past stance on keeping troops in Afghanistan. [Axios]
Sign up to Newswire for an inside look at the biggest stories in global development.
About the author
Anna Gawel
Anna Gawel is the Managing Editor of Devex. She previously worked as the managing editor of The Washington Diplomat, the flagship publication of D.C.’s diplomatic community. She’s had hundreds of articles published on world affairs, U.S. foreign policy, politics, security, trade, travel and the arts on topics ranging from the impact of State Department budget cuts to Caribbean efforts to fight climate change. She was also a broadcast producer and digital editor at WTOP News and host of the Global 360 podcast. She holds a journalism degree from the University of Maryland in College Park.
