Charity partnerships: Finding new ways to work together

Charities are experimenting with collaborations that stop short of formal merger. Mathew Little looks at how two groups of charities are trying to find their own ideal structure

Life Education (above) became Coram Life Education
Life Education (above) became Coram Life Education

When she was asked to describe the nature of the governance agreement signed in the spring between her charity and Action for Blind People, Lesley-Anne Alexander, chief executive of the RNIB, said it was "somewhere between collaboration and merger".

Stephen Burgess, chief executive of Coram Life Education, confesses that lawyers working on the formal partnership between Coram and his charity, Life Education, fretted that it wasn't "one thing or the other". Eventually, the two charities decided to call the agreement, announced in August, an 'amalgamation'.

Although merger is still the preferred option for two charities that conclude that joining forces is best for their beneficiaries, some organisations are seeking their own answer.

They are experimenting with structures that bring the benefits of merger while allowing charities to retain their individual identities and culture. "It's a formula where two organisations are locked together but there is a still a reasonable level of self-determination," says Burgess. "It gives us the best of both worlds."

More than a coalition

Although this emerging model can take a variety of forms, their common element is that they are more than a coalition or loose partnership. The RNIB has become the sole corporate member of Action for Blind People as well as the Cardiff Institute for the Blind.

Coram has taken a 75 per cent membership stake in Coram Life Education. In each case, the smaller charities have become subsidiaries of larger charities in the same cause area. There is now an RNIB Group, while Coram Life Education has come under Coram's umbrella, which already included another charity, the Foundling Museum.

But the 'junior' partners have retained independent charitable status and their own trustee boards. In the case of Life Education, Coram has taken a controlling interest in the organisation, but it doesn't have the power normally granted to a majority owner.

Half of the trustee board are elected by Coram Life Education's 36 local groups, which hold the remaining 25 per cent membership stake - down from 99 per cent before the amalgamation.

The other board members are nominated by a joint Coram Group committee, made up of Coram, Coram Life Education and Foundling Museum trustees, and selected by the Coram Life Education board. Only the chairman is appointed by Coram.

The smaller charities have also kept their cultural distinctiveness and ability to raise funds as separate entities. "We've been going for 150 years, and you don't surrender your heritage and identity lightly," says Stephen Remington, chief executive of Action for Blind People.

Coram Life Education, a federal charity, has retained its distinctive operational model, which involves licensing local trusts to run programmes. They take mobile classrooms to schools in their area and give children health messages on subjects such as drugs and healthy eating.

But there are limits to their independence. Action for Blind People and the Cardiff Institute have given up the right to determine their own strategy.

Instead, they must align themselves to the RNIB's strategy, which itself is based on the UK Vision Strategy, agreed by 600 organisations working in the sight loss field. The board of the RNIB has ultimate authority - Action for Blind People's board reports to it, and the RNIB appoints half of the board at the Cardiff Institute.

"If Action for Blind People's board decided it wanted to come out of blindness work and work with blind people dealing with deafness, the RNIB's board would say no to that because it's so far out of the RNIB's strategy," says Alexander.

"It has given up that ultimate independence, but in return it has got the financial and business capacity to do more." Similarly, Coram Life Education's board develops its own business and strategic plan, incorporating fundraising, income generation and PR, but has to get Coram's approval.

So what do the smaller partners get in return for sacrificing complete autonomy? The main compensation is access to the larger charities' infrastructure and financial capacity. Action for Blind People has transferred its 27-strong fundraising department to the RNIB. The pooled department raises funds for both brands. The RNIB has also taken on the investment strategy and cash flow management of the Cardiff Institute.

At Coram Life Education, meanwhile, fundraising, IT, finance and administration are undertaken by Coram. The junior partner has also moved to a rented office in Coram's three-acre campus in central London. Burgess describes the relationship as "an arms-length arrangement between friends".

Coram Life Education's finances are ring-fenced, but it pays a fee to Coram for its accounting service and also purchases fundraising from its partner. "Our trustees are still in charge of fundraising but there is an internal market mechanism," he says.

"In practice, Coram Life Education buys a fundraising service. We work together to determine what is the most effective policy. Within this framework, the fundraising team will raise money against Coram propositions, raise money against Coram Life Education propositions and raise money against corporate propositions."

Burgess says this centralisation is good value for money. The charity used to employ a single fundraiser; now it spends a similar amount of money to use Coram's fundraising department. "Instead of one person, I've got part of a commercial director and part of a junior fundraising researcher," he says. "That enables me to spend my money much more effectively."

Varied benefits

For the larger charities, the benefits of acquiring subsidiary charities are varied. Alexander says the creation of the RNIB Group will reduce duplication in the sight loss sector, which includes more than 700 charities.

The RNIB has transferred £8m of grants and contracts, and 276 staff, to Action for Blind People to deliver regional services in England. "The only reason for the association model is that we can rationalise delivery and maximise what we do," she says.

The group's members vary in size and mission. It is concluding negotiations with National Talking Newspapers and Magazines and is in discussions with two other organisations about joining the group. "We can be a large or small charity," says Alexander. "We can be close to people or nationally campaigning. RNIB Group brings lots of strengths."

Coram's motivation for amalgamating with Life Education was to enlist the expertise of a charity whose mission was complementary to its own. Coram works with families acutely affected by drug and alcohol abuse.

Life Education's awareness work with schoolchildren on drug and alcohol issues has added a preventative dimension. In particular, Coram Life Education will help Coram to advise parents about how to talk to their children about drugs and alcohol. It will also be represented on Coram's children's services policy committee.

Carol Homden, chief executive of Coram, says the governance model agreed with Life Education could prove a popular alternative to merger because it doesn't require two organisations to start afresh with a new mission.

"You are bringing two things together in a common direction of travel that they already have," she says. "It is a model that allows for different operating approaches within the delivery of your direction. It doesn't remove the blooming of many flowers."

Alexander says the group and subsidiary model will not remove all problems between the members, but will force them to confront difficulties rather than withdrawing again into competition.

"There are going to be some real big bumps in the road," she says. "The RNIB has to think about other organisations more, Action for Blind People has to think about its dependence more. I'm sure there are going to be tensions. If it was easy to walk away we might just do that, but it's like getting married: you think twice before you stomp off out of the door."

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