OPINION: Hot Issue - Should the sector encourage mergers between charities?

Organisations including NCVO, ACEVO and the Charity Commission are to study the need for a Collaborative Working Unit to offer advice on mergers.

While Cancer Research UK is the most successful high-profile merger to date, others such as the proposed Crisis and Shelter join-up have fallen by the wayside.

Jane Hatfield, head of services, NCVO

NO

Charities need to work more effectively together. A merger is one option at the end of a wide spectrum of joint working. NCVO research shows that joint working between voluntary organisations can bring clear benefits and significant costs.

It is crucial that organisations consider why they are embarking on collaborative working and how to achieve the results they want. For example, collaboration in purchasing services such as payroll may be driven simply by the need to reduce costs. Collaboration on service delivery can take many forms as Guide Dogs for the Blind has shown by forming strategic alliances with other visual impairment charities.

Many organisations lack the time and knowledge to make informed decisions about effective collaboration. NCVO, the Charity Commission, ACEVO and CFDG are exploring the possibility of establishing a Collaborative Working Unit to provide information and services for organisations seeking to work jointly with others.

Shaks Ghosh, chief executive, Crisis

YES

A merger is an option worth considering if two charities genuinely feel they will benefit from it. My advice is simply to consider a merger for the right reasons, which must be about delivering better results for clients, and not the wrong reasons, such as attempting to resolve public confusion about the number of charities. If the public is confused about charities, they need to be better educated about what they do. Merging is not the answer.

My other advice is never to underestimate the risks associated with a merger. It costs money and, at the end of the day, there is no guarantee that two charities will be able to raise the same or more money together as they did separately. Mergers are also hugely painful and will affect performance during and after a merger at the very least.

The vision guiding discussions must be to create something which is more than the sum of the parts. If not, there will be no compensation for the loss of impact during the merger process.

Rosie Chapman, director of policy, Charity Commission

YES

The environment in which charities operate is becoming more complex, offering further opportunities and challenges. A growing number of charities are deciding that the best way forward is to explore ways of working closely together, whether that be through informal alliances, group structures or full-scale mergers. We want to encourage charities to be alert to the possibilities of enhanced working by teaming up with other organisations.

However, it is not our role to push charities into any form of collaborative working relationship. Diversity is one of the sector's strengths, but in some cases mergers can bring about improved services and result in a more economical use of resources for the benefit of users. Likewise close collaboration, which allows each charity to retain its unique perspective, may often be more effective than a full merger.

Either way, we are always glad to discuss with any charity the legal and constitutional issues arising from any form of joint working.

Sally Kirby, director of charity services, Chantrey Vellacott DFK

YES

There is a perception that there are too many charities with broadly similar objectives, competing for finite resources. How can so many seemingly similar appeals for donations be justified? Does the money donated get lost in numerous fundraising efforts rather than being directed to one major cause? Are individual charities campaigning tirelessly on "small

issues when joining forces could result in a far more powerful outcome?

Merging enables streamlining of resources, concentration of effort and pooling of knowledge to achieve a more efficient and sustainable outcome in an increasingly competitive environment. But, in practice, merging charities is only feasible in very specific circumstances. Aims, objectives, activities and cultures must be congruent - these cannot be changed overnight. Legal and operational constraints, particularly in relation to staffing, and to transferring assets and liabilities, may prevent mergers coming to fruition despite the best intentions.

Have you registered with us yet?

Register now to enjoy more articles and free email bulletins

Register
Already registered?
Sign in

Before commenting please read our rules for commenting on articles.

If you see a comment you find offensive, you can flag it as inappropriate. In the top right-hand corner of an individual comment, you will see 'flag as inappropriate'. Clicking this prompts us to review the comment. For further information see our rules for commenting on articles.

comments powered by Disqus
Follow us on:
  • Facebook
  • LinkedIn
  • Twitter
  • Google +

Latest Jobs

RSS Feed

Third Sector Insight

Sponsored webcasts, surveys and expert reports from Third Sector partners

Markel

Expert Hub

Insurance advice from Markel

Guide: What insurance does your charity need?

Guide: What insurance does your charity need?

Partner Content: Presented By Markel

Third Sector Logo

Get our bulletins. Read more articles. Join a growing community of Third Sector professionals

Register now