Why TechGirlz’ acquisition bucks the norm in nonprofit M&A
March 12, 2019
Michelle Caffrey, a reporter for the Philadelphia Business Journal, covered the news regarding the acquisition of TechGirlz by Creating IT Futures. The article discusses the uniqueness of this nonprofit acquisition and how the future is looking bright with both organizations working under the same umbrella. The full story was originally published March 6, 2019 in the Industries & Topics: Technology section of the Philadelphia Business Journal. View the original article here.
You don’t see deals like TechGirlz and CompTIA’s often, nonprofit consultant Don Kligerman said.
A well-known organization in Philadelphia’s tech world is being bought by a leading name in the industry — but it’s not your typical acquisition in any sense.
National tech trade association CompTIA announced Tuesday its charity Creating IT Futures acquired TechGirlz, the Philadelphia-based nonprofit organization that’s focused on teaching girls STEM skills in middle school, vulnerable years where they’re often most likely to turn away from the field.
Led by Founder Tracey Welson-Rossman, TechGirlz is in its prime. Over the past five years, both the nonprofit and its Women in Tech Summit, a primary fundraising and community building event, have expanded to other cities, reached more than 15,0000 girls and launched a $1 million capital campaign.
TechGirlz has operated on what Welson-Rossman described as a lean startup model that’s enabled it to support, among others, programs like its TechShopz in a Box program, an open access resource volunteers nationwide can use to launch their TechGirlz workshops. It’s that kind of existing structure that sets TechGirlz up well to scale, said Charles Eaton, CompTIA’s executive vice president of social innovation and CEO Creating IT Futures.
“They found the secret sauce, how it works, it’s so scalable,” he said. “It just requires some efficiency and some dollars. There’s so much there.”
No funds exchange hands as part of the deal, just the transfer of TechGirlz’s assets to CompTIA, which is based outside of Chicago in Downers Grove, Ill. Both TechGirlz and the Women in Tech Summit will maintain their own branding as a program under Creating IT Futures and continue both fundraising and programming activity.
A staff of about six full-timers that work remotely in the Philadelphia area and meet weekly at Chariot Solutions, where Welson-Rossman is CMO, will continue to be based here. She will retain her seat on the Creating IT Futures board and will oversee its committee in charge of TechGirlz for the foreseeable future.
“We could not do this if Tracey wasn’t going to be involved,” Eaton said. “It wouldn’t make sense.”
The deal is unusual in that when mergers and acquisitions happen in the non-profit space, its usually in response to an organization’s struggles, not success.
There can be other motivations, like the departure of a longtime leader or getting ahead of shifting trends but nonprofits “don’t think about some form of merger or becoming a part of another organization unless they feel they’re in financial distress,” said Don Kligerman, founder and president of nonprofit consulting firm Fairmount Ventures.
That’s not the case with TechGirlz, which is looking for more resources and brain power after proving out their model. It’s an impressive step for an organization to take when on the upswing, he said, and one that can help it expand its geographic reach, provide better outcomes for funders and ultimately better execute its mission.
“The fact that a healthy, thriving nonprofit is saying, ‘We can continue what we’re doing, but what’s in the best interest of our mission?’ … That is unusual, and that’s commendable,” Kligerman said.
TechGirlz and Creating IT Futures, CompTIA’s vehicle to support nonprofit work, have been partners for five years, and for the past three TechGirlz has been a recipient of its Next Step grant. Creating IT Futures created the grant to fix the same problem TechGirlz has been focused on, supporting girls in STEM education to improve the workforce pipeline.
The organizations began to work so closely together on overlapping goals, that when Creating IT Futures decided to switch from providing funding to programming, Eaton knew it was better to buy than build. Serious talks began in the summer, leading to today’s announcement.
“To be able to have an organization like TechGirlz as part of our portfolio of programs was too attractive of an offer to turn down,” Eaton said.
For Welson-Rossman, who spent years helping the nonprofit grow into what it is today, she said she knew it was important to put ego aside and do what’s best for the organization.
On a personal level, she said the acquisition feels a little like sending a child off to college. There are a lot of emotions going on, she said, but the main one is pride.