Consolidation among Charlotte's nonprofits took a step forward Tuesday with news that two agencies serving the elderly are studying a merger.
Mecklenburg County Manager Harry Jones proposed the study, as part of a 2010 budget presentation Tuesday to the county commissioners. Jones said discussions between the Charlotte Mecklenburg Council on Aging and the Charlotte Mecklenburg Senior Centers are likely the first of several merger studies his office will propose for charities that get county money.
The goal is to trim as much as possible from the county's budget, which faces a $78.9 million shortfall. The county gives the two groups a combined $500,000, an amount more apt to shrink than grow in coming years.
“This has to do with the very survival of organizations,” said Jones, who met with the agencies last week to pitch the idea.
With the recession drying up public and private money, Jones said, the county has a responsibility to look for new and more efficient approaches.
Charlotte's nonprofit community faces its own financial crisis, in part because a United Way campaign drive crippled by controversy raised $15 million less than a year ago. The agency has told its 90-plus member charities to expect up to a 40 percent cut in support starting July 1.
The senior centers receive $220,000 from United Way, about 17 percent of their budget. The Council on Aging is not a member agency.
Floyd Davis, who heads the council of United Way's charities, said the county study will be a catalyst for more merger talks. He suggested months ago that United Way charities consider mergers as a way to survive budget cuts.
“If one agency executive is talking to another … about a merger, it can be tough to move forward because they both want to maintain their jobs. But when a major funder like the county suggests discussing it, there's impetus.”
Davis says mergers may allow the agencies to serve more clients by eliminating duplicate administration costs.
Debora Sparks, executive director of the Council on Aging, says the agency is open to the study. But she's not sure a merger would work. The council – which has four full-time staffers and an annual budget of $400,000 – focuses on advocating for seniors, she said, while the senior centers specialize in educational, health and social programs.
“I think the county manager is trying to look at some creative ways of trying to save money, and we don't disagree with that objective.”
Trena Palmer, executive director of the senior centers, said even if the merger doesn't take place, the two may come up with ways to help each other and save money.
If United Way cuts are bad enough, the agency may close one of its four locations, she said. The senior centers serve about 4,000 clients annually, with a full-time staff of nine.
The study will likely begin in June and could take up to six months, county officials said.
In the meantime, both agencies will continue to receive their allotted county money through June 30, 2010.