Northeast Parent & Child Society and Parsons Child and Family Center are exploring an agreement that would create a parent company to oversee the operation of both organizations.
Trustees from the two organizations adopted a memorandum of understanding this week, which would have them enter into an affiliation agreement. This accord would allow both organizations to retain their respective identities but help them further their shared objectives, officials with Parsons and Northeast said Friday.
“The underlining premise here is improving service,” said John Henley, Northeast’s chief executive officer.
The memorandum is not binding and can be broken by either Northeast or Parsons at anytime. But it represents a commitment on the part of both organizations to fully explore the feasibility of having an umbrella company act as a steward
“What we’ve done is to design a presumptive plan that would affiliate the two organization,” said Ray Schimmer, Parsons’ chief executive officer.
The result could be a single organization that could provide a panoply of child welfare services from the time they come into the system until the time they leave. Combined, the organizations would command more than $80 million in revenue and employee roughly 1,250 workers.
“It could be exciting,” Schimmer said. “Everyone perceives the potential, which could be great.”
The companies will now jointly hire a financial and legal consultant to explore more deeply such an agreement. Schimmer said there will likely be a six-month period of “due diligence” to ensure there are no major roadblocks to prevent the companies from affiliating.
Once this is completed, a formal agreement will be signed and the implementation process will begin. If all goes as planned, the new entity could begin operations some time in early 2012. “We’ve done a lot of work already,” he said. “But again, at this point nothing is final.”
Founded in 1888, the Schenectady-based Northeast was started by a group of women who wanted to help the homeless children of the city. Northeast now provides a wide spectrum of services, including foster care, child guidance and therapy, parenting effectiveness education, a secondary school for 152 children, independent living skills training and career development services.
Parsons Child and Family Center was established in 1829 as the Society for the Relief of Orphan and Destitute Children of the city of Albany. Today, it’s considered the largest multi-services agency in the Capital Region dedicated to helping families and their children.
The companies began exploring an affiliation agreement more than a year ago. Both organizations are financially strong, which makes the agreement somewhat unusual.
Normally, affiliations or mergers are reached when one organization is much stronger than the other. In this case, Henley said both organizations are very healthy and are more than capable of sustaining their respective business models.
“We’re doing this from a position of strength,” he said.
That’s exactly why the affiliation discussions began. Schimmer said the child welfare system is “under stress,” and both organizations indicated a desire to discuss an affiliation while they remain in good health.
“We’ve got the possibility to ensure high quality child welfare throughout the region for a long time to come,” he said.
Categories: Schenectady County