Charities and mergers: When hearts and heads align

Norman Blissett examines the difficulties and obstacles of joining together as experienced by two charities

Norman Blissett
Norman Blissett

Generally, mergers and acquisitions in the voluntary sector have a notoriously low success rate. Around half do not achieve their intended goals after the merger has taken place. The main challenge is not demonstrating success post event, but making it happen in the first place. Too often mergers arise from the demise of one of the organisations with their board not grasping the reality of the position early enough - acting only once it is too late to make an informed strategic decision.

Family Action has considerable practical experience of both acquiring services and of mergers. Through this experience we have learnt what is important when identifying merger opportunities and what is needed to ensure they succeed.

Firstly, a board will need to assess the future - identifying options for the charity to sustain its mission and then decide on the best course of action. Once a decision has been made to seek merger, the next step is to identify the right partner organisation.

A strategic fit is essential - how well will the combined organisations fit with the planned strategic direction and is that direction sustainable? Both organisations must buy into that direction through a shared vision and, crucially, they must have cultures that can be aligned. Trust and joint planning from the outset are all essential. It is also key to make the difficult decisions about strategy, people, structures and brands early, fairly and jointly.

Last autumn a successful merger between Family Action and Friendship Works was completed. Although the immediate position was healthy for Friendship Works, at the beginning of 2015 the future was looking increasingly uncertain. They carried out an early and detailed analysis of strategic options which enabled the Friendship Works board to make an informed decision to seek a merger partner. Family Action was actively looking for merger partners as part of their income diversification strategy. We had already identified Friendship Works as a good strategic fit and contact was made between the boards and chief executives.

Trust between the key people in both organisations is fundamentally important and, in our experience, the most successful partnerships and mergers are where both sides work hard to build trust from an early stage. In this instance, trust was quickly established between the chairs, chief executive and key directors of both charities which enabled a shared vision to emerge. This was extended throughout both charities by continually involving, informing and updating all staff affected by the merger.

It is essential that an executive lead is appointed and planning starts as early as possible, with the involvement of all key people from both organisations. Here, planning began as soon as the ‘in principle’ decision to merge was made by the boards. Weekly meetings involving key staff, led by a Family Action director, commenced covering every aspect from office relocation to cultural integration of the staff, leading to the successful merger in October 2015.

By joining Family Action, a larger, national charity, Friendship Works have now placed themselves in a strong position to continue with their present work and to safely grow and thrive in the future; enabling them to increase the number of children they are able to help.

Norman Blissett is director of systems and impact at Family Action

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