A lack of market pressure means there is no incentive for charities to merge, the former chair of the British Red Cross said yesterday at the Lord Mayor’s Charity Leadership Programme Charity Chairs Conference in London.
James Cochrane, who spent most of his career in the pharmaceutical industry and stood down as chair of the humanitarian organisation in 2012, said he did not hold out much hope that mergers would be widespread among "semi-successful charities" because there were "no pressure of market" to force them to be more efficient.
"It’s very easy for charities to carry on just getting some money in, keeping their expenses down and providing a service – it might not be a very good service, but still a service," said Cochrane. "There’s very little incentive for them to say to another similar charity, ‘let’s get rid of the dividing line and bring it all together’."
Cochrane said that he expected to see mergers happening only in cases where charities were running out of money and finding it hard to survive.
He spoke about a charity he had been involved with where the board decided to offload a division that was not part of the organisation’s mission to another charity in the belief that it could fulfil the service need more effectively.
But he said the process took a long time and involved heavy persuasion of people in both charities.
Also speaking at the event, Alice Maynard, who stepped down as chair of disability charity Scope earlier this week, rejected suggestions by other conference panellists who had said that charity trustees ought to offer financial support to the organisations they governed.
Maynard said she did not see why she should have to donate to Scope, adding that she estimated that her tenure as chair cost her consulting business about £70,000.
She said the responsibilities of charity chairs were often expensive and time-consuming, which meant that people on low wages who could not easily take leave from their day jobs would struggle to fulfil the role.