Voluntary Action Stoke-on-Trent and Newcastle-under-Lyme Community and Voluntary Support have announced plans to merge.
The NCVS will become a subsidiary of Vast at the completion of the merger, which comes after Vast won a contract to provide CVS services across Staffordshire.
Sajid Hashmi, chief executive of Vast, which has an annual turnover of £2.5m, will become the head of both organisations. Jackie Wheeler, chief officer of the NCVS, which has an annual turnover of £300,000, will step down when the merger is completed on 30 June.
Hashmi told Third Sector that the organisations had decided to merge after Vast won a county-wide contract with Staffordshire County Council to provide third sector infrastructure and volunteering support. The contract, which runs from 1 May, is worth almost £2m over four years.
The other eight CVSs in Staffordshire also bid for the contract, under the umbrella of a social enterprise, but were unsuccessful.
After Vast won the contract, the trustees of the NCVS decided that the charity could not continue as a single organisation and decided to merge with Vast, said Hashmi.
He said the two organisations had been discussing the possibility of a merger since the council announced in August 2012 that it would tender with only a single provider.
Out of the NCVS’s seven staff, two will be made redundant as a result of the merger: the chief officer and a member of the administrative staff. "At this stage we don’t envisage any more redundancies," Hashmi said.
He said that four of the NCVS’s six trustees would join Vast’s existing board of 10 trustees. The other two would retire at the next annual general meeting, he said.
The NCVS will retain its own branding and will continue as a charity in its own right after the merger. Hahsmi said Vast would provide the charity with back-office support and investment.
He said there were a number advantages to Vast holding the single contract for CVS services in Staffordshire.
"Before this you had nine CVSs, nine chief officers, nine databases and nine newsletters," Hashmi said. "There was what we called nine-ification, everything was being done so many times. For that reason, there was a lot of duplication; the same things were being done over again. Now there will be one point of contact and a unified service. You will get the same level of service wherever you are."
David Matthews, chair of the NCVS, said: "As a result of the austerity measures, the trustees have been exploring different ways of securing the NCVS's future. We are delighted to be teaming up with Vast because this ensures services for local communities will continue and will enable the NCVS to build on its previous success."
Hashmi said that Vast had approached the remaining seven CVSs in Staffordshire to discuss possible mergers, but none had yet made a decision to do so.