Strategic Alternatives

Strategic Alternatives for Financially Distressed Nonprofits

At any point in time, between 10% and 15% of Nonprofits are facing acute financial distress, calling into question whether they will be able to survive. Ideally, a Nonprofit recognizes the problems leading to this and takes action to preempt this outcome. SRA can help these organizations step back for the brink and avoid more radical alternatives.

However, if the Nonprofit has reached the point where its existence is in peril, there are alternatives which SRA can help the organization think through and act on. As a first step, SRA conducts a crash audit of the organization’s finances and evaluates its alternatives to avoid extreme measures. If there are no viable alternatives, SRA can assist the organization to prepare for and take one of these steps:

M&A or other Collaborations

Outright Merger
Asset Transfer
Interlocking Boards
Parent-Subsidiary Relationship

Federal Bankruptcy

Chapter 11, including Sub-Chapter 5
Chapter 7

State-supervised alternatives

Receivership
Custodianship

Non-legally supervised alternatives

Voluntary Dissolution
Assignment for the Benefit of Creditors

Any of these alternatives must be carefully considered and calls for legal advice and a communications plan. SRA provides guidance and internal management of the process, advising the Board and management and assisting in selection of the necessary outside professionals.

Strategic Alternatives