NORTHAMPTON — Regional human service agencies Pathlight and ServiceNet are merging in a move that leaders say will enable Pathlight’s programming to continue and allow ServiceNet to expand resources it already offers.

The organizations’ leaders and employees announced the move on Thursday, two days after the boards of directors for both agencies finalized the deal. The process had been initiated in mid-June when Pathlight’s board concluded a merger was in its best interest to continue and expand services it currently offers.

The agency finished the 2023 fiscal year down $1.8 million, according to ProPublica, an independent news organization.

Keith Kendall, CEO of Springfield-based Pathlight, said the decision to merge is based on the aspiration “to do more good work than we’re doing right now.” He said the merger showed the nonprofit’s determination to “do what we aspire to do for the individuals we serve and the people who work for the company,” adding that “we probably can’t do it alone.”

According to Valle Dwight, Pathlight’s director of communications and development, “Pathlight is solvent and financially capable of continuing operation,” adding that “this merger was all about living up to our mission.”

Kendall said the losses were “largely driven by the increased costs for labor in the direct care sector exacerbated by the extreme shortage of qualified nurses.”

The search for a company to merge with — one that would align with their mission and ensure the transition of Pathlight programs and employees — began in July.

Now that the merger has been made official, legal matters and state approvals will continue to be negotiated over the next year, including what the future of the Pathlight logo and brand will be now that its programs will be absorbed by ServiceNet.

Both organizations offer programming focused on developmental disabilities and mental health challenges, and offer residential services including group homes and shared living.

Founded by five moms of young children with developmental abnormalities, Pathlight focuses its care on children suffering from developmental disabilities and autism, among other services. Pathlight currently serves about 1,000 people with 500 employees at four locations in Northampton, Greenfield, Pittsfield and Springfield.

When the organization was founded 72 years ago in 1952, Pathlight was the first in Hampden County exclusively dedicated to serving people with mental disabilities.

ServiceNet was established in 1973 in Northampton in response to the deinstitutionalization of people with mental illness, and also offers care to people with brain injuries; provides counseling, treatment and shelter; and offers substance abuse recovery resources. The organization employs 1,200 people and serves more than 8,000 patients each year, overseeing facilities across Berkshire, Franklin, Hampshire, Hampden, and Worcester counties.

Pathlight has been in exclusive negotiations with ServiceNet over the past 30 days, after speaking to “many organizations,” said Kendall, adding that the company “aligned with us most philosophically and they also have the financial strength to continue to offer additional services.”

Sue Stubbs, CEO and president of ServiceNet, agreed the move benefits both organizations, since it will allow ServiceNet to offer “better-coordinated whole-person care,” as Pathlight’s programming nicely complements ServiceNet’s.

“They do more outreach, they have more children’s programs, while we focus more on adults,” Stubbs said. “We have clinical services that we feel we can make available to more people.”

Stubbs also added that in the past the two nonprofits have shared both staff and clientele, so this move cuts back on the need for people to jump from agency to agency in pursuit of resources.

Overall, she expects the merger to make ServiceNet stronger, as “merging with organizations brings new blood, new ideas,” she said.