Editorial: Mergers are on the rise, so charities should know all the implications

All eyes are on Age Concern and Help the Aged as they attempt merger talks for the third time in a decade (Third Sector, 22 August). It would be the largest merger since Cancer Research UK was formed in 2003.

Emma Maier
Emma Maier

This latest attempt may be drawing attention because of its size, but it is one of a growing number of mergers in the sector. In the past three months alone, groups of CVSs in six counties have decided to merge, the 90 members of the Victim Support federation voted to merge into a single organisation and two adoption charities and two payroll-giving bodies have decided to merge.

Charities have long been under pressure to join forces. The Government and the Charity Commission have stressed the value of mergers, and surveys have consistently shown that the public thinks there are too many charities.

Although merger in the private sector is often viewed with suspicion, there appears to be an ongoing quest for consolidation in the voluntary sector, motivated by concerns about charities' efficiency, scope and use of resources. Merger is expected to reduce duplication and costs. It often does.

However, this latest trend for mergers also appears to reflect a worrying new pressure from funders, particularly local authorities, which are increasingly looking to fund a smaller number of larger organisations in their constituencies and thus make savings.

Recent research from umbrella body Navca shows that local authorities are pushing CVSs to merge (Third Sector, 11 July). Elsewhere, news that government funding for Victim Support would be frozen until the federation could provide a more detailed report on its spending was one of the factors affecting its decision to become a single organisation (Third Sector Online, 19 June).

Bringing together organisations with differing structures and cultures is a complex, potentially costly exercise and, as with everything charities do, the best interests of their client groups must be at the heart of what they do.

When conditions are right, mergers can deliver: CRUK achieved the impressive feat of saving £2m and boosting income by £32m in the first year after it was formed from the Cancer Research Campaign and the Imperial Cancer Research Fund in 2003, for example.

But there are also well-rehearsed arguments against merger. For many smaller groups, the risk of loosening their connection and identification with local people and reducing their flexibility and adaptability outweigh the benefits of potential cost savings or economies of scale.

Many of these groups can form partnerships that achieve some of the benefits of mergers without actually fusing. Initiatives such as the NCVO's Collaborative Working Unit, Bassac's new community business SWiM (Sharing Without Merging) and regional projects such as Engage East Midlands' vcscollaborate.org website can help voluntary organisations to collaborate.

The benefit of these schemes are increasingly being recognised in the sector, but the good news does not seem to have reached all public sector funders. Funders should have a right to check that their money is being spent as agreed. But voluntary organisations must stand up for their right to maintain their independence and adopt the structures that allow them to best serve their clients.

Emma Maier is deputy editor of Third Sector

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