The charities said the move would allow both organisations, which will remain independent entities but combine their workforces, to achieve greater impact.
Y Care International, which was set up in 1984 as the aid and development department of YMCA England, became an incorporated charity in 2005.
A spokesperson for the charities said they started sharing experiences more than two years ago, which led to discussions about closer collaboration and resulted in the new partnership.
The move, which took effect on 1 September, means Y Care International’s five staff will join the 20 based at All We Can’s headquarters in Marylebone, London.
The spokesperson said that as the charities worked to grow there were plans to create new roles to fulfil the greater needs of both organisations.
All We Can, which is the international development and emergency relief organisation of the Methodist Church, had an income of £3.2m in the year to the end of August 2020, while Y Care International brought in funds of £2.3m in the year to the end of March 2020.
“All We Can retains a favourable financial position in the current fundraising climate,” the spokesperson said.
“Y Care’s financial position has declined during the pandemic – this is one dynamic that has been considered as part of this new partnership.
“One hope for this new arrangement going forward is that it will bolster Y Care’s financial position, and ensure the charities’ long-term future sustainability.“
Y Care International will remain affiliated with the global YMCA movement under the new arrangement.
Graeme Hodge, who will lead the two charities and was chief executive of All We Can, said: “At the heart of this development is our core shared vision: to help more people living in vulnerable and excluded communities across the globe see their potential fulfilled.
“We have had the pleasure of getting to know Y Care International over the past couple of years, sharing All We Can’s partnership approach and exploring opportunities for collaboration.
“This development is the next step in that relationship, and represents a deepening commitment to effective partnership.”
Carolyn Miller, who has been interim chief executive of Y Care International since January, is stepping down.