NEWS IN FOCUS: Do mergers bring as many problems as they solve? - Mergers can offer lower costs and higher income, but also mean emotional upheaval and organisational conflict, writes Lucy Maggs


The largest UK charity was born on 4 February this year with the merging of the Cancer Research Campaign and the Imperial Cancer Research Fund to create Cancer Research UK. But a permanent chief executive has only just been appointed, in the person of Paul Nurse, former director-general of the Imperial Cancer Research Fund.

Nurse has been acting chief executive for the past three months, taking over from Andrew Miller, now at the Royal Society of Edinburgh. The charity was without a permanent chief executive for just over six months and Miller's period as interim chief executive was unexpectedly short.

This naturally led to speculation that the charity was finding it difficult to fill such a demanding role. The requirement was for someone with a good scientific record to lead an important international research organisation and with the ability to manage a large, complex charity going through a period of change.

The appointment of Nurse was controversial. Professor Gordon McVie, the former director-general of the Cancer Research Campaign, who was also up for the job, has left the organisation because no appropriate role could be found. And his wife, Claudia McVie, director of community fundraising, has also left for "personal reasons". There have also been suggestions that undertaking an expensive recruitment process only to settle on someone so close to home may have been an unnecessary cost.

But Baroness Helene Hayman, chairman of CRUK, insists that during the recruitment process there was never a shortage of leadership at the organisation.

Miller, she says, was brought in to do the very specific job of putting the organisation together. "This was done more quickly than expected,

she adds.

She points out that for such a complex job it was vital to make sure the right person was put in place and there is a consensus that Nurse is that person.

"It's a sensitive situation and very important for the candidates to be seen objectively. People need to know that we've explored all the possibilities,

she says.

Jo Bunt, a consultant at recruitment consultancy Veredus, which carried out the headhunting process, says there were more than a hundred applicants.

But finding the right chief executive is not the only hurdle a merger such as this can throw up.

Joining with another charity is bound to create anxieties among staff that their roles may change or become defunct. The Terrence Higgins Trust went through a high-profile merger with London Lighthouse in October 2000, and in the past three years it has merged with eight other organisations.

Joanna Van Driel, executive director of marketing at the trust, advises that good communication is essential. "It's vital to be up front with staff about what's going on in the organisation,

she says.

Two charities coming into a merger will also have different operating procedures and have to choose which ones to adopt. Hayman says: "People get emotionally attached to some of the ways of operating.

When the two cancer charities came together they had two chains of shops that had similar functions but were run in very different ways. For example, one sold both new and donated goods while the other sold just donated goods. "People felt strongly about how they were run. But each issue has to be ground through to find which is the right system for the charity,

adds Hayman.

A major concern for charities considering merging is whether the two together can produce the same amount of income. Van Driel points out the problem of losing support from trusts. "A number of organisations decided to reduce support and a couple walked away as they thought Terrence Higgins Trust was not what they had bought into when supporting London Lighthouse."

Keeping public support in the form of donors and volunteers is also vital for a merger to succeed. Hayman says that creating a strong new brand is key to this, otherwise there is a danger the public will think that both organisations have just disappeared.

Indeed, CRUK ran a TV campaign when the new charity was launched to help overcome this.

Happily for both organisations income has increased as support has been found in new areas and costs have been cut. The Terrence Higgins Trust saw voluntary income grow by 13 per cent in the year ending March 2002, and fundraising and publicity costs were reduced. CRUK says it is also seeing an increase in income and a reduction in costs. Van Driel attributes Terrence Higgins Trust's fundraising success to dedicated staff, and setting realistic targets.

If the CRUK merger proves a success, and so far it seems to be, the sector will have two high-profile mergers to its credit, which could pave the way for other organisations to follow.

The key to a successful merger is the motivation behind it - to serve beneficiaries more effectively. The main motivation for CRUK was scientific development. Nurse says: "The mapping of the human genome and rapid developments in cancer research over recent years presented us with invaluable opportunities to work together."

Van Driel and Hayman both agree though that mergers should not be rushed into. But Hayman adds: "People have been very enthusiastic about what we've done and there's a feeling that there's a proliferation of organisations in the sector doing very similar things. I hope there will be more mergers in the future.

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