Mergers and Acquisitions in the Nonprofit Sector: A Strategy for Growth and Impact
In 2025, the value of M&A deals saw a 29% increase, marking it as the second-highest deal value in the past decade. In 2025, M&A deal values increased by 29%, driven by megadeals despite regulatory scrutiny and e… Despite these hurdles, the number of deals spiked by 8% in 2025, indicating robust activity in the market.
Mergers and acquisitions (M&A) have become an increasingly common strategy within the nonprofit sector, as demonstrated by the ongoing exploration of a merger between Resolution Project and Enactus. This strategic consideration aims to enhance their collective impact without the necessity of reconstructing existing infrastructures.
The Rise of M&A in the Nonprofit Sector
The normalization of mergers and acquisitions as a strategic tool in the nonprofit sector indicates a shift in how these organizations approach growth and sustainability. Traditionally viewed as a last-resort option, M&A has now been embraced as a proactive strategy to scale impact. This change in perception reflects a broader understanding of the benefits that can be derived from combining resources, expertise, and networks.
In 2023, a notable instance of this trend was the integration of Resolution Project and Enactus Global. The merger was part of a broader movement within the sector to align missions deeply and leverage combined strengths to achieve greater efficacy in their social initiatives.
Challenges and Considerations in Nonprofit M&A
While M&A offers significant opportunities for nonprofits, the process is not without its challenges, particularly emotional ones. Stakeholders in nonprofit organizations, including employees, volunteers, and beneficiaries, often have deep emotional connections to the entities involved. These connections can complicate merger discussions and necessitate careful management to ensure that the process respects and preserves the values and missions that are central to the organizations' identities.
Furthermore, successful M&A in the social sector requires more than just financial considerations. Deep mission alignment is crucial. The merging organizations must share similar goals and values to ensure that their combined efforts truly result in enhanced impact.
Economic Context and M&A Trends
The broader economic environment plays a significant role in shaping M&A strategies, both in the nonprofit and for-profit sectors. In 2025, the value of M&A deals saw a 29% increase, marking it as the second-highest deal value in the past decade. This surge was driven in part by megadeals, which have become a significant force in merger and acquisition activity.
However, these large transactions often attract considerable regulatory scrutiny. As a result, larger organizations may opt for less risky M&A deals to avoid potential regulatory challenges. Despite these hurdles, the number of deals spiked by 8% in 2025, indicating robust activity in the market.
Future Prospects for Nonprofit M&A
Looking ahead, the trend of utilizing M&A as a tool for scaling impact is likely to continue, especially as economic uncertainty persists. Organizations in the nonprofit sector may increasingly seek partnerships that allow them to expand their reach and enhance their effectiveness without undertaking the costs and risks associated with building new capacities from scratch.
As the nonprofit sector continues to evolve, mergers and acquisitions will remain a critical strategy for organizations seeking to amplify their impact while navigating the complexities of mission alignment and stakeholder expectations.
M&A is not just a tool for financial growth but a strategic approach to achieving greater social impact by uniting forces and optimizing resources.