Structured for Success

Chambers of commerce are forming new structures for myriad reasons, in some cases as a way to form more efficient relationships with organizations with which they already partner. The following case studies shed light on a few such stories, which include mergers and the creation of umbrella organizations. 

Greater Topeka Partnership

Location: Topeka, Kan.

Approximate annual budget: $10 million

Key management: Matt Pivarnik, president and CEO; Curtis Sneden, COO & senior vice president; Brett Oetting, president of Visit Topeka & executive vice president; Molly Howey, senior vice president; Vince Frye, President of Downtown Topeka, Inc.; Glenda Washington, senior vice president

Number of employees: 45, once fully implemented

In 2016, Matt Pivarnik, CCE, IOM, was hired to lead both GO Topeka, the city’s economic development organization, and the Greater Topeka Chamber of Commerce. Although the organizations were co-located and shared a CEO, all other aspects were separate. Employees used the word “they” when referring to those in the other entity, Pivarnik says, somewhat bewildered.

His surprise stems in part because he had arrived from the Tulsa Regional Chamber, a partnership of the chamber, economic development organization, and convention and visitors’ bureau. “I did find that I didn’t know what I had until I didn’t have it,” says Pivarnik, referring to the unified organization in Oklahoma.

His search committee was “intrigued” that he came from a partnership, and there was “a hunger to bring the different entities together,” he says. Those entities included Downtown Topeka and Visit Topeka. Between them, the four organizations oversaw nine initiatives--a business incubator and leadership program among them.

During his first year, Pivarnik worked hard to “break down the silos” between the chamber and the ED organization. Soon after his arrival, GO Topeka engaged Market Street Services, an Atlanta consulting firm, to help develop a community-wide initiative, Momentum 2022. It became clear during this work, says Pivarnik, that “if we are all going to get together to move the community forward as a team, why do we have all these silos?” A visit to the Greater Des Moines Partnership also provided inspiration.

The result was formation of the Greater Topeka Partnership, effective Jan. 1, 2018. The Partnership is a 501(c)(6) umbrella organization that Pivarnik terms a “collaborative.” All four organizations that comprise the Partnership remain separate legal entities governed by their own boards. The Partnership’s board, or Chairs’ Council, includes the chair and chair-elect of each individual board. Additionally, seven at-large board members who are prohibited from serving on the other entities’ boards make up the Chairs’ Council, helping to ensure a “macro focus,” he says.

The Partnership model offers benefits beyond economies of scale, he says. The chamber can continue its robust public affairs program; separate budgets ensure public funds don’t flow to chamber coffers. The entities share one mission and marketing message. Pivarnik notes that seven of the top 10 reasons people visit a city and live there are the same. It’s easier to tweak one marketing message than develop separate ones, he explains. And, unlike in a merger where one entity may take a backseat to another, all four can continue to focus on their niches, he notes.

No employees were laid off, although some have new roles. He says the heads of GO Topeka and Downtown Topeka are “community champions” who cared more about Topeka than their job titles. Internally, the Partnership operates as a shared services organization.

Pivarnik says “the stars aligned in many ways” logistically. The four entities held three leases, all of which expired in fall 2017. At that time, they negotiated month-to-month leases; the Partnership plans a move to a single location in summer 2018. Merging memberships proved relatively easy, too. Only a dozen members of Downtown Topeka were not chamber members; they were grandfathered in as Partnership members.

Pivarnik’s tip for others considering a new structure?  “Do what’s best for the community, not what’s best for you, your board or your organization,” he says. “If you do that, everything will fall into place.”

 

Greater Lehigh Valley Chamber of Commerce

Location: Lehigh Valley (Allentown-Bethlehem-Easton, PA-NJ MSA) and neighboring areas outside the MSA.

Approximate annual budget: $4.3 million

Key management: Tony Iannelli, president/CEO, and Frank Facchiano, COO and executive vice president, member relations

Number of employees: 30

When the Greater Lehigh Valley Chamber of Commerce held its 2017 annual meeting, more than 1,200 of its 5,000+ members attended, representing businesses in three counties in Pennsylvania and one in New Jersey. That’s an impressive turnout for chambers in large metro areas, let alone those in a sprawling area where the largest city has a population of 120,000.

Known locally as the Chamber, the organization hasn’t always boasted such a large membership—or a sizeable geographic territory. Beginning in 1998, the Greater Lehigh Valley Chamber grew out of the Allentown Chamber of Commerce. With the backing of some large businesses, Tony Iannelli, then president of the Allentown chamber, began courting nearby chambers to create a stronger organization. The area was already home to both a valley-wide economic development corporation and valley-wide convention and visitors’ bureau, and he believed a regional coalition of chambers would wield greater power, especially in the statehouse. And it has, says Frank Facchiano, COO and executive vice president, member relations.

Today, the Greater Lehigh Valley Chamber is an umbrella organization for 18 separate chambers, including a Hispanic chamber. Its name changed over the years to reflect its growing reach. “I think the secret to us is that we think big [valley-wide], but we act small [in individual towns],” says Facchiano. Dues are paid to the umbrella organization, which operates as a shared services model. Individual agreements with the 18 chambers vary slightly, but all employees work for the umbrella organization.

Thanks to this structure, members have a much larger audience/market for products and services than they would if the chambers had remained independent, says Facchiano.

To retain the small-town feel and capitalize on local pride, each of the 18 chambers retained its name, logo and board of directors. One representative from each of the individual chambers serves on the board of the Greater Lehigh Valley Chamber, as does a representative from each of the Chamber’s business councils and a Public Policy Committee. The nearly 80-member board of the Greater Lehigh Valley Chamber also includes at-large representatives. Boards of individual chambers “brainstorm and direct the staff regarding their initiatives and events,” says Facchiano.

In early 2018, the Greater Lehigh Valley Chamber was negotiating partnership agreements with additional chambers. A trial period, in which the chambers would enter into a six-month fee-for-services contract, was being discussed.

To be sure, there are some logistical complexities. The Greater Lehigh Valley Chamber has a presence in 17 different cities/towns. It pays rent in five of those locations; other offices are provided free in town halls, libraries, or member businesses. Some employees oversee initiatives in multiple towns, and Facchiano notes a “curiosity” of the structure: management of five annual golf tournaments.

Sometimes the positions of one chamber conflict with those of others under the umbrella. Facchiano points to the creation of a Neighborhood Improvement Zone (NIZ) in downtown Allentown. When the NIZ was proposed several years ago, the Greater Lehigh Valley Chamber held informational sessions for members. The Allentown mayor hoped the Chamber would issue a statement supporting the NIZ, but many members were against a state-backed initiative that would benefit one locale only, so it did not. Such challenges aside, “The total is greater than the sum of the parts,” says Facchiano. 

Orlando Economic Partnership

Location: Orlando, Fla. (represents city and seven-county area)

Approximate annual budget: $10 million 

Key management: Tim Giuliani, CCE, president and CEO; Crystal Sircy, COO and senior vice president of business development. Jacob Stuart, long-time president of the Orlando Regional Chamber of Commerce, was instrumental in Giuliani’s transition; Stuart retired at the end of 2017.

Number of employees: 42

“Better together” became the mantra of the Orlando Economic Partnership when it was formed in 2017 from a merger of the Central Florida Partnership (CFP) and the Orlando Economic Development Commission. The CFP was an umbrella organization for four entities, including the area’s regional chamber of commerce, while the EDC included a Film Commission.

Tim Giuliani, CCE, who was hired in March 2017 to lead the Orlando Economic Partnership, said the impetus to merge stemmed from “a realization that the economy was changing faster than ever, and that big-picture answers were getting harder.” Leaders realized that “there needed to be one agenda, one vision and the coming together through one board.” More specifically, he cites changes at the federal level relating to transportation and the “growing and ever continuing pressure on workforce demands” as challenges for communities nationwide.

A potential merger had been discussed for years, he says, and gained momentum after the head of the EDC left in early 2016. With central Florida booming (it currently leads the country in job creation, he says), it made sense to “harness the energy and the optimism of this moment in time.”

An 18-member Joint Alignment Committee, comprised of an equal number of board members from both organizations, met for 18 months to talk through logistical issues. A key component: ensuring the current level of investment in the short term. At the time of the merger, 97 percent of investment dollars from the existing 52 dual investors were confirmed for 2017-18.

Every board member from the CFP and EDC became a board member of the new partnership for two fiscal years, leading to formation of a board with about 140 members. In fall 2018, at the beginning of a new fiscal year, Giuliani says the board “will be right-sized.” The Orlando Economic Partnership has been governed by what he calls a “compromise set of bylaws,” which will be changed to reflect best practices.

The merger resulted in several operational changes. Giuliani eliminated Business Force. That division of the CFP donated to and endorsed political campaigns, which he said is “not prudent” since 30 percent of the new partnership’s revenue is derived from public dollars. In addition, the new group established a 501(c)(3) foundation to run Leadership Orlando and future programs; Giuliani hired a public policy expert to head it to enhance the organization’s knowledge in that arena.

In an effort to marry the EDC’s focus on business recruitment and the chamber’s attention on existing businesses, the new partnership is putting together five industry councils. And the new group added an alliance for regional transportation to help arrive at solutions amidst the region’s fast growth (1,000 new residents a week, says Giuliani.) A former city manager with extensive knowledge of transit systems was hired for the position. One of the challenges? “Getting clarity around what we will start doing and what we will stop doing,” he says.

When the staffs were merged, five employees were laid off. Giuliani plans to add more staff whose skills align with the goals of the new Partnership. All employees work in renovated, expanded office space where the EDC was housed.

Giuliani says the merger wasn’t done to save money or improve efficiencies. Instead, the new organization is designed to “look at the world differently.” 

 

Capital Region Chamber

Location: Colonie (Albany) and Schenectady, N.Y.

Approximate annual budget: $4.3 million

Key management: Mark Eagan, CCE, chief executive officer

Number of employees: 22

“Undeniably intertwined.” That’s what Mark Eagan, CCE, discovered about the economy of four counties in the Albany, N.Y., metro area when he arrived in 2008. It’s also an apt description for the relationship two area chambers nurtured for years before integrating operations in 2015.

Eagan was hired to run the Albany-Colonie Regional Chamber of Commerce, the area’s largest chamber. Four years before his arrival, the chamber had begun working with the Chamber of Schenectady County. Leaders there understood their county’s integral role in the regional economy and approached the larger chamber about collaboration.

Initially the chambers’ leadership programs merged. Then the organizations worked on joint initiatives, such as a Young Professionals program. In some cases, the Schenectady chamber entered into a fee-for-services agreement with its larger counterpart. They ultimately shared one staff member.

During discussions about mergers and structures within other organizations, the board chairs told Eagan and Chuck Steiner, president of the Schenectady chamber, “If this [a change] is going to work, it will be the two of you who make it work.” Indeed, says Eagan, “The reason this worked is we liked each other and trusted each other.” Steiner offered to serve as president of the newly formed organization, while Eagan would be CEO.  (Steiner, who planned to retire at the end of 2017, died last year.)

In fall 2014, the chambers formed a joint task force to discuss a new structure. Three volunteers from each chamber, both chamber executives, and a consultant hired through the New York Council of Nonprofits comprised the task force. But what should a new organization look like? Members in Schenectady were concerned their chamber would be absorbed by the Albanie-Colonie chamber, whose budget was three to four times larger than that of their organization.

The solution was to form a new parent organization, the Capital Region Chamber, that works on regional issues. The Schenectady and Albany-Colonie chambers remained legal entities operating as affiliates with a focus on local policy issues and local programming. (The chambers retained their names; new logos display the capital “C” of the Capital Region Chamber logo to demonstrate they are tied together.)

Both the Albany-Colonie and Schenectady chambers have seven-member boards; their chairs serve on the executive committee of the Capital Region Chamber board. Members pay dues to the Capital Region Chamber, and all employees work for the parent entity. Boards of the individual chambers serve primarily in an advisory capacity, says Eagan. To ensure a consistent revenue stream, he and Steiner contacted the 220 companies that were members of both chambers. About 95 percent agreed to write one check for the amount they were paying to both entities to create a solid financial footing for the integrated organization.

Today, the membership team works in Schenectady, and Eagan spends time in both locations.  “We have two offices,” he says, “not a main office and a satellite office.” Eagan is mindful that nearby towns also have chambers. The Capital Region Chamber reaches out to collaborate with them on issues of regional importance, he says, but refrains from getting involved in local issues.

Eagan believes the key to making a new structure work is transparency with members and the media. It’s also critical, he says, to “identify all the landmines” and “build a governance model and organizational model to address them.” 

 

Michigan West Coast Chamber of Commerce

Location: Holland and Zeeland, Mich.

Approximate annual budget: $1.2 million

Key management: Jane Clark, president

Number of employees: 7 (6 full-time and one part-time)

The first day that two Michigan chambers merged seemed “so natural” to Jane Clark, president of the combined entity, known as the Michigan West Coast Chamber of Commerce. “The preplanning was worth all the hours we put into it,” she says.

On Sept. 1, 2012, the Holland Area Chamber of Commerce, of which Clark was president, merged with the smaller Zeeland Chamber of Commerce. Zeeland and Holland are five miles apart; some manufacturers operated plants in both places.

In late 2009, Zeeland Chamber leaders met to determine the organization’s future strategy, in part because its longtime executive planned to retire. Although a potential merger was discussed, leaders opted to work with the Holland chamber on events of mutual interest, such as a Governmental Affairs Breakfast. Regional cooperation was not new; the communities were home to the Holland-Zeeland Community Foundation and a regional economic development entity, among others.

The idea of a merger gained momentum in 2011. That summer, a survey was sent to members of both groups to collect input on the existing collaboration and a possible merger. The chambers’ Collaboration Committee engaged the research arm of a nearby college. Sixty-eight percent of respondents favored a merger, which was more popular among dual members and members of the Holland chamber, whose budget was more than three times that of the Zeeland chamber.

“This was a merger of two strong organizations,” says Clark. “The real key was that the staff leaders wanted to make it happen. We put personal egos and personal fears aside,” she says, referring to Jim Schoettle, who took over for the retiring Zeeland executive. The merger fell in place when everyone agreed that layoffs would not occur, the new entity would have a presence in both communities, and members of the two boards would serve on the combined board until their existing terms expired.

The Collaboration Committee hosted Rich Baker of the nearby Grand Rapids chamber, who had experience with chamber mergers. Governance documents from the Ann Arbor-Ypsilanti Regional Chamber provided additional insight.

Among the logistical challenges: determining a name with broader appeal; setting a new dues structure; and weighing how to determine representation from both towns on the new board. Forty percent of the Zeeland Chamber’s members were members of both chambers, so leaders created a new dues structure that would be phased in over three years to cushion the effect of losing dues revenue. A 501c3 was created to organize and supervise Zeeland’s many festivals.

At one point, a co-presidency was favored by some leaders, but was deemed too cumbersome. Clark was named president, while Schoettle became executive director of development. (He retired in 2015.) To assist with planning, the chambers held joint staff meetings beginning in January 2012.

After the merger, the Zeeland location was renovated, sending a positive message to Zeeland businesses. Over time, though, it became difficult to staff two offices, says Clark. When the owner of the Zeeland building redeveloped the site, the chamber found an innovative solution. It created the nearby Zeeland Innovation Place (ZIP) that provides free conference space to members but is not staffed.

Today, the West Coast chamber offers programs and services beyond what either chamber could do on its own, says Clark. The merger, she says, “aligned the natural business community.”