Post #1: The inside story of the Water for Waslala acquisition

Matt Nespoli, Co-founder and Board Chair

[Note – If you haven’t already, check out the Announcing the “Agua Para Waslala” Program Alliance post for more information.]

How do you sum up 14 years in a single blog post? Answer: I can’t, so I’m writing three posts.

In this first post, I’ll answer some of the common questions I’ve received from folks on the acquisition. Post #2 will share my top 5 favorite WfW memories over the last 14 years, and the last post will focus on what I’ve learned personally from Water for Waslala, and what advice I’d like to share with my fellow non-profiteers.

Here are my answers to some questions you may be thinking right now:

Why did you decide to proceed with an acquisition?     

It was really all about what was best for the Waslalan people. In a nutshell, it became very clear to us over the last few years that Water for Waslala was never going to grow to a size and scale that would match the need in Waslala.

There are 40,000+ Waslalans that do not have clean drinking water today. Clean drinking water is not some “nice to have” resource; it is an urgent need that requires urgent action.

Our team has always maintained that feeling of urgency (which, on a separate note, is a source of great pride for me). However, at the end of the day, our US team comprised ~6 unpaid volunteers who were balancing WfW with other full-time jobs and personal responsibilities. Water for Waslala needed the attention of a full-time team of fundraisers and leaders, but what we had in reality was a very small fraction of that manpower.

Contrast that picture with what the people of Waslala will have under the leadership of WaterAid and El Porvenir: several full-time US fundraising staff, a full-time leadership team covering strategy, and a well-established Nicaragua execution team that far surpasses our current operation in Waslala. In other words, more money available for clean drinking water projects, and more resources available in Nicaragua to help Waslalans get pipes in the ground and clean water flowing into their homes.

Both WaterAid and El Porvenir have committed to seeing through the mission of Water for Waslala and finishing the job by 2030, and they have also committed in writing to growing our budget to several times its current size over the next four years. For them, Water for Waslala offers an opportunity to grow and make an even bigger dent in the UN 2030 development goal of achieving universal access to clean water and sanitation.

For these reasons, it really was a no-brainer to move forward with the acquisition.

Why now?

Over the last five years, we’ve tried and failed several times to grow Water for Waslala organically, which ultimately led to the realization that a strategic acquirer was the right path for us.

In 2012, we decided to hire our first paid US employee, an Executive Director who would primarily focus on growing our fundraising. We spent months hiring and training an Executive Director that year, but they weren’t able to move the needle on our fundraising. We tried again with another Executive Director in 2014, but that ended in a similar outcome.

Why were we unable to grow our fundraising impact with a dedicated Executive Director? There were two ways to interpret what happened:

1) We hired the wrong people, or

2) It was structurally impossible for WfW to successfully grow on its own.

We ultimately realized that the right answer was #2. Both Executive Directors we hired were experienced and able fundraisers, so it didn’t seem like a talent issue. The bigger issue was twofold:

  • It is really hard for a fundraiser to succeed in an organization that offers no office space, other employees, or fundraising resources. It would be as if you dropped someone off alone on an island and asked them to hunt without giving them any tools. It’s a nearly impossible task.
  • More fundamentally, we were trying to fit an overhead structure on top of a mission that was too narrow to accommodate it. Water for Waslala has a very specific mission – one cause, one municipality – which makes the organization very difficult to scale. One reason is that, in essence, we were only ever going to attract donations from folks that cared about both Waslala and the issue of clean water, which is a very small population of people. The other is that even our annual fundraising goal itself – $200-300K per year – was too low to support a paid WfW staff; even if we did raise the money we needed, too much would have to be used to pay US salaries vs. helping Waslalans.

Once we realized that we could never achieve our mission by ourselves, it became obvious that the right solution was to grow inorganically by seeking an acquirer.

What does it mean to be “acquired” as a non-profit?

In many ways, a non-profit acquisition is similar to a for-profit acquisition. The acquiring organization takes ownership of the acquiree’s assets and liabilities, and assumes day-to-day operations. The main difference is that in the non-profit space, there is no acquisition price, since there are no profits that accrue to the acquirer.

In this case, Water for Waslala’s US assets (i.e. the money in our bank accounts) and liabilities (i.e. our nominal US operating expenses) will be acquired by WaterAid, and our in-country operations (i.e. our office space, employee expenses, warehouse of water system materials) will be acquired by El Porvenir. In exchange, both organizations have committed to completing Water for Waslala by 2030, and increasing our annual operating budget over the next four years.

Finally, to be clear, no one on our Board or in Waslala received any compensation from this acquisition.

How did you find an acquirer?

At the beginning of 2015, our Board of Directors put together a list of water and sanitation-focused organizations that were already operating in Nicaragua. We contacted each organization and asked if they would be interested in growing in Nicaragua, and WaterAid and El Porvenir were the two organizations that responded most enthusiastically.

What was the acquisition process like?

After a few months of exploratory conversations via phone and email, the heads of WaterAid and El Porvenir joined Nora and Rob from WfW’s Board of Directors in Waslala in the summer of 2015 for an in-depth field visit. WaterAid and El Porvenir met our in-country team, visited several completed and in-progress water projects, and spoke with our Board about our strategic vision and plan for 2030.

Both WaterAid and El Porvenir liked what they saw in Waslala, and pitched their respective Board of Directors on the Water for Waslala acquisition opportunity in the fall. Both Boards approved the acquisition by December 2015, and since then we have been busy finalizing all of the required legal documents to complete the acquisition.

 

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We're Proud to Announce that Water For Waslala Has Been Acquired By WaterAid - Read The Full Announcement

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