While attempting to meet the continuing need for their services in the wake of the COVID-19 pandemic, CAAs must contend with the scarcity of unrestricted sources of funding and intensified competition for government grants. At the same time, CAAs are expected to demonstrate the measurable impact of their work, to exercise effective financial oversight and to fully comply with the many laws and regulations that apply to their operations. One means of maximizing limited resources and meeting increased funding source expectations for effectiveness, efficiency and oversight is through shared services and mergers. Under the right circumstances, sharing services or merging can help a CAA enhance the effectiveness and efficiency of its governance and operations, strengthen its financial position, augment its engagement and standing in its community and, ultimately, expand the breadth and depth of its impact. Interest in these arrangements among CAAs has risen in recent years due in part to federal sequestration and other government funding cuts, the retirements of a number of CAA executive directors, and increased openness among CAA boards and executives to new and innovative models of organizational sustainability.

For purposes of this guide, the term “shared services” refers to various types of arrangements between a CAA and one or more other organizations to share administrative or programmatic functions or physical resources. A CAA might share services with another CAA or with a different nonprofit organization. Examples of shared administrative functions include: sharing an individual staff person (such as an executive director or information technology (IT) director); sharing an entire department (such as a fiscal department or human resources (HR) department); or engaging another organization to provide all of the management functions (executive director, fiscal, HR, IT etc.) needed to operate the CAA. Yet another example of shared administrative services might be a joint purchasing arrangement with another entity that enables both entities to obtain more competitive pricing than either could obtain on its own. Examples of shared programmatic functions might include sharing an individual staff person, such as a weatherization director, or an entire department, such as a weatherization department, including the weatherization director, crews and inspectors. Sharing physical resources might include sharing office space or equipment, such as vehicles, blower doors, or other weatherization equipment.

Although the term “merger” technically refers to a situation where one or more organizations transfer their assets and liabilities to another organization and then dissolve, this guide uses the term in a more generic sense. As used in this guide and the accompanying CAA merger case studies, the term “merger” refers to various methods of combining the programs, assets, or entire corporate entity of another organization with a CAA. The merger portion of this guide and the case studies on CAA mergers provide examples of various ways CAA mergers may be structured. Note that the merging organizations do not both have to be CAAs; a CAA may merge with another CAA or with another type of organization altogether.