Creating Chapters or Affiliates: Is Expansion Right for You?

clip art people in gears to illustrate expansion

This blog post first appeared in Philanthropy Front and Center Atlanta.

“Hi. I’m calling from Chicago. We love what your organization is doing for underserved communities. Would you be open to creating an affiliate here?”

Perhaps you’ve been the recipient of a phone call like this. Or perhaps you dream of the day when you will receive it. Most nonprofit organizations would love to be so successful at what they do that other would want to replicate it.

But do you know how to respond to such a request?

Making the decision to expand your organization’s reach into new geographical markets is neither easy nor simple. There are a number of things to consider including the legal issues surrounding the various kinds of expansion models. And, of course, this is a situation where one size does not fit all.

This topic was the subject of our most recent presentation from Pro Bono Partnership of Atlanta. For those who missed the class, we wanted to share a few highlights here.

When looking to expand, there are many different models and variations within each. Four that were covered were:

  1. The One Level model: This model usually consists of one office running programs in multiple locations.
  2. The One Organization model: Here your organization would have multiple offices controlled by one centralized office.
  3. The Chapter model: In this model, multiple locations may be overseen by a national “Board” but could be incorporated separately each with their own local governance. Each chapter may have some autonomy but would still be limited by the articles of incorporation required by the national Board.
  4. The Franchise model: Here your organization would create a contractual relationship with another entity. The relationship would include use of your trademark and access to your support in exchange for a fee paid by them.

How do you decide which is right for your organization?

Spend time thoughtfully considering these seven areas:

  • Governance: Do you want to set the rules regarding infrastructure and the way each location is set up? Or are you willing to leave that to the discretion of leaders at the local level?
  • Revenue Allocation: Do you want revenue generated at the local level to stay there? Or should all revenue be funneled to the national organization?
  • Finance Control: Would you entrust this to the local entities or prefer to keep it centralized?
  • Brand Control: How much say do you want to have regarding the use of your brand?
  • Intellectual Property: Do you want to own any intellectual property created in connection with your brand?
  • Separation: How easy do you want it to be to separate yourself from a local entity should the need arise?
  • Local Participation & Autonomy: What level of local participation in national discussions do you want to allow? How much autonomy are you willing to give the local entities?

As you can see, much of the thought process boils down to this: How much control do you want to have?

Fortunately you don’t have to make this decision alone. Pro Bono Partnership of Atlanta provides resources (like this webinar) as well as consulting on this topic for nonprofits. Check out their website for more information.