In September 2018, the Ontario Provincial Government released a report, completed by Ernst and Young (EY), titled “Managing Transformation: A Modernization Action Plan for Ontario”.
If you are a leader in the nonprofit sector in Ontario and have not read this report, I strongly recommend you do as it provides a guide to potential future directions of this new government.
In this report, EY identifies that for every dollar spent in the OPS, nine dollars are spent through the 35,000 different Transfer Payment (TP) arrangements that the Ontario Government manages. EY stresses that there is a significant opportunity to transform the way Ontario manages these TP expenditures.
The report suggests that reducing the number of TP agreements will lower the cost of administration to both government and transfer payment agents. Easier management of system-wide performance will create lower administration costs, increased value for money, enhanced client experience, and improved outcomes.
Whether or not you support this direction is not the question, but how are you going to respond? Although not a certainty, it is highly likely that we are going to see a major consolidation of Ontario TP agencies over the next couple of years. As a leader in the not-for-profit sector, you are now faced with a challenge: Wait for the change to be directed by the government OR control your destiny by pursuing constructive merger opportunities first.
There are many challenges when exploring mergers. The best rule of thumb is for the boards that are considering a merger to come together in a partnership, often as a joint Task Force, to undertake a comprehensive due diligence process.
For a free consultation on how to explore potential mergers and determine which are most suitable for your organization, please contact me at [email protected] or visit www.Osborne-Group.com.
