Success Story:
Keystone Alliance, Glenkirk, and Search Inc.
A unique parent-subsidiary structure in I/DD services
The Opportunity
Founded in 1955, Glenkirk evolved from a school in a Glenview church basement into an I/DD provider offering a broad spectrum of programs and services. Similarly, Search, Inc., established in 1968, began as a school in Chicago’s Cabrini Green neighborhood and grew into a high-quality provider of day and residential services, with a strong commitment to social enterprise.
In 2006, Glenkirk faced a pivotal moment as its long-time CEO contemplated retirement. Despite the senior leadership team's deep expertise, the organization struggled with financial challenges and a backlog of deferred maintenance issues. Rather than conducting an external search for a new executive, Glenkirk’s CEO and board sought a merger partner as a transition strategy. The first conversation about this strategy occurred at the 2007 IARF Conference, where Glenkirk’s CEO approached Search’s CEO to gauge preliminary interest.
The Process
Initial collaboration discussions took place in late 2007 and early 2008, focusing on a potential merger strategy. Both organizations’ boards actively engaged in the exploratory phase. However, the merger concept encountered barriers early on: financial disparities were revealed, significant cultural differences existed, including the presence of a bargaining unit in one organization, and both organizations had strong relationships with their communities, making the potential loss of identity a challenge. Despite these differences, the mission similarities, geographic congruency, and organizational strengths motivated Glenkirk’s and Search’s leadership to pursue a different partnership strategy.
Each organization’s merger committee independently concluded that an affiliated parent-subsidiary structure was the best solution. In this model, all administrative, policy, and strategic planning functions migrated to the parent corporation, Keystone Alliance. Mission and program operations remained with Glenkirk and Search, whose boards, brands, and individual corporate structures (i.e., 501(c)(3) status, FEIN, bylaws, etc.) remained intact. Keystone was responsible for approving operating and capital budgets, board elections, bylaws changes, and exceptional transactions. The boards overlapped, with 100% of Keystone’s board comprised of Glenkirk or Search board members.
The Results
Keystone began operations in September 2009. In the first year, combined overhead for Glenkirk and Search dropped from 11.6% to 7.9%, resulting in $780,000 in savings. This significant one-time accomplishment underscored the potential of the new structure. In 2010, Glenkirk's balance sheet was restructured, significantly de-leveraging and aligning debt with the collateralized asset base.
In 2011, the Planet Access Store was designed and opened on behalf of Search, Inc. In 2012, Keystone completed the installation of corporate IT infrastructure for both organizations, including the donation of 15 PC workstations to improve efficiency. In 2013, Keystone brokered a partnership between Search and JJ's List, making JJ's List an operating program of Search. Additionally, three CILA residences were acquired via Neighborhood Stabilization Program funding for Search, valued at $960,000.
By 2019, Glenkirk's residential rebuilding was complete, leveraging $3.4 million in grants and financing to lease or purchase six new homes and renovate 15 homes. This initiative included the creation of a lease-to-purchase program with IFF, which opened six homes.
Reflections
Throughout this journey, the emphasis on culture was paramount. Both organizations worked diligently to align their values and practices, ensuring a cohesive and supportive environment for staff and clients alike. This focus on culture helped to bridge the differences between the organizations and foster a collaborative spirit.
The focus shifted from efficiency to capacity, ensuring that the structure was designed for continuous learning and improvement. Ultimately, the effort and expense were worth every bit, as the partnership strengthened both organizations and enhanced their ability to serve their communities.
Conclusion
the Keystone Alliance stands as a testament to the power of strategic collaboration. By combining their strengths and resources, Glenkirk and Search not only overcame significant challenges but also created a sustainable model for delivering high-quality services. This partnership exemplifies how thoughtful, mission-driven collaboration can lead to transformative outcomes, inspiring other organizations to explore innovative ways to achieve their goals.
