Preliminary discussions have begun about a possible merger of the Spokane Regional Chamber of Commerce and the Spokane Area Economic Development Council, the top executives of the two organizations say.


The executives, chamber President and CEO Rich Hadley and EDC President and CEO Jon Eliassen, caution, however, that such talk is simply part of joint strategic planning the two nonprofits have begun, and though additional collaboration between them is a key piece of that planning, a merger is just one possible form that collaboration might take.


What were doing is looking for a new model for providing the kinds of services the chamber and EDC provide, says Hadley.


Early last week, a team that included executives and board members from both the EDC and the chamber flew to Milwaukee and Lexington, Ky., to study organizations in those two cities that have tightly aligned chamber and economic-development functions.


Though neither model might be a perfect fit for Spokane, Hadley says chamber and EDC leaders were impressed with some of their initiatives and structure, and were especially taken with a theme Commerce Lexington adopted when its chamber and EDC merged a few years ago, which was One Team, One Vision, One Voice.


That phrase is used atop a one-page information sheet developed by the EDC and chamber here that talks specifically about the notion of merging the two Spokane organizations.


The greater Spokane region is in fierce competition for new jobs, a skilled work force, and outside investment for economic growth. While we are currently doing well, other regions are out-performing us by leveraging their resources through unity of purpose, the sheet says.


The paper goes on to point out that combining the two organizations isnt a new idea, but rather has evolved over time, as evidenced by their co-location in the Spokane Regional Business Center, and their ongoing sharing of administrative, financial, marketing, and membership services.


Hadley and Eliassen say that now is a good time to discuss such a merger, because a level of trust has developed between the two organizations in recent years, because they share several board members and common contributors, and because both nonprofits likely will undergo leadership changes in the next five years.


Eliassen joined the EDC in late 2003, having already retired from Avista Corp., and never planned to make his EDC post a permanent one. He says now hed be willing to leave his job anytime it made sense. Hadley, 59, has been with the chamber for 13 years and will be looking at retirement himself in coming years.


Doing succession planning while mulling a possible consolidation of the two organizations could pay dividends in shaping how the two groups recruit new leaders and position present managers in key future roles, Hadley says. He adds that the chamber currently has three unfilled staff positions.


Eliassen and Hadley say that merging the two organizations would provide obvious savings in administrative costs, which is a key concern as both groups vie for limited funds from donors and other funding sources.


My corporate background shapes some of my thinking on thisto leverage limited resources, says Eliassen, who served as Avistas chief financial officer.


A merger, however, wouldnt be intended to reduce the overall amount of money needed to run the two organizations, Eliassen and Hadley say. Rather, they say, consolidating operations would shift funds from administration and support to the direct programs that both nonprofits provide, which would mean that members and funding sources would get more bang for their buck.


Well be able to do a lot more with the funding that we have, Eliassen says. Wed be showing the community that were leveraging our dollars.


In practice, says Hadley, a combination, or some other collaborative model of the two organizations, might result in the need for additional funds because the new entity might find new collaborative initiatives in which to embark.


Currently, the chamber operates with a $1.6 million budget, about $900,000 of which it gets through donations, with the rest coming through events, some small grants, and other sources. It has 16 employees. The EDC has about 12 employees and has an annual budget of $1.2 million. It gets about 45 percent of its funds from government sources, and the rest primarily from business donations.


Eliassen and Hadley say the two groups routinely work together on projects and have shared employees and other support systems. They also regularly work closely with other organizations, such as the Spokane Regional Convention and Visitors Bureau and the Downtown Spokane Partnership.


The next steps


This week, chamber and EDC leadership plan to take to their respective boards information they have learned about the idea of looking for a more collaborative model, Hadley and Eliassen say. After that, they plan to make one more community visit, this time to look at Boises Treasure Valley Partnership, a collaborative effort there.


Hadley says the two boards will start discussing in more detail how a more collaborative model between the two organizations might look, including board governance, and will start meeting with public officials and executives of other nonprofit groups here so that everyone stays in the loop.


We need this to be very transparent, Hadley says.


The two organizations have scheduled a joint board retreat for Aug. 24, at which the possibility of consolidation will be discussed further.


He says that if the boards decide to pursue some form of consolidation, it would be difficult to speculate how long the process might take. It could take months or a couple of years, based on what other communities have found, he says.


What we need to do is find a model to be successful and then incubate it, he says.


Contact Paul Read at (509) 344-1262 or via e-mail at [email protected].