Charities should consider collaboration or merger as a way of meeting the needs of their beneficiaries more effectively, according to Geraldine Peacock, chair of the Charity Commission.
The process could also diminish the public perception that there are too many charities all trying to do the same things, she said at the launch of a new commission guide on collaboration and mergers.
"The public are confused because there are so many institutional forms of doing good without profit," she said. "They're no longer sure about charities - they wonder why they don't work more closely with each other.
"The acid test for charities should be whether the public feel they are giving the best possible help to the people they are trying to serve."
Peacock told an audience of trustees and media that the commission was putting more resources into the area by issuing the new guide, creating the new post of head of mergers and signing a partnership with the collaborative working unit of the NCVO.
She said the commission was a neutral body and that it was not its job to tell charities what to do. "But it is our job to raise this question, whether at the time of registration or review, or when people phone us up," she added.
She urged organisations to think laterally about possible links and to avoid the assumption that animal charities, for example, should join only with other animal charities. "I can't help but think that when the air ambulance is in trouble, why don't the lifeboats help out?" she said.
She added that hostile takeovers in the charity sector did sometimes occur. "We don't have very many, but large organisations are sometimes seen moving towards smaller organisations pretending to help, but intending to take them over," she said.
Julie Spencer-Cingoz, chief executive of the British Institute for Brain Injured Children, described how the commission advised it on a proposed merger, which fell through (see case study). The involvement of the commission was vital, she said.
Collaborative Working and Mergers is available free from the Charity Commission on 0845 300 0218. It is also online at www.charitycommission.gov.uk.