Stella Smith: Merging charities might seem a logical approach, but in reality it's less straightforward

There is potential for charities to work more closely together but this should not routinely amount to a merger, says our columnist

Stella Smith
Stella Smith

It seems everyone is expounding the virtues of mergers. In January, Prince William suggested there were too many charities during his speech at the Charity Commission’s annual public meeting. The think tank NPC has also said that charities should consider mergers more seriously. Meanwhile, the merger of Bowel Cancer UK and Beating Bowel Cancer appears to have gone well.

From a distance, merging charities with similar causes seems like a logical approach. Yet if you speak to anyone who has been directly involved in a merger, the chances are they’ll tell you that, unless one organisation is prepared to be taken over, the reality is much less straightforward.

Combining two charities, each with its own unique history and culture, will inevitably cause tensions. Consequently, mergers are often drawn-out processes, consuming a lot of energy and with unclear measures of success. Undoubtedly, there are successes, but as an approach to strengthening the sector’s effectiveness mergers are a blunt instrument to deal with a complex issue.

Supporters of mergers often cite the efficiencies argument, saying that grouping similar activities together gives economies of scale and more output for less time or effort. This is true when you are working on a standardised service or product: if you are putting data into a spreadsheet, rather than have three people do this part -time in different offices, it might make more sense to have one person doing it full-time in one place. However, the success of many charities has relied on their personalising services, adapting their offerings to what is needed by each client, donor or member.

One reason public sector contracts were put out to tender 30 years ago was an appreciation that huge public sector organisations could not be flexible enough to meet the complexity of needs of the people using the services. To maximise their impact, services needed to be tailored to individual needs and a diverse charity sector was seen as ideally placed to do this.

There is potential for charities to collaborate on projects and complement each other’s work, but that should not routinely equate to mergers. Commissioners and funders might want a more streamlined sector, but it will not necessarily deliver better outcomes. The recent update by Civil Society Futures said people in civil society bodies "feel they have lost touch with those they serve" and having fewer smaller organisations would only exacerbate such concerns.

Smaller organisations peopled by skilled staff and volunteers with close-to-the ground decision-making and strong relationships with communities, donors and beneficiaries are often better able to respond to need than large organisations.

It is a messy sector, overlapping and inefficient in places, but let us not pretend that a structured sector of larger organisations would be more effective. Instead of trying to organise the sector, let’s enjoy its haphazard nature, because it is these very characteristics that spark its creativity. Above all, where there is a merger, the resulting larger charity must still be able to adapt to the specific needs of individuals and situations. If it fails to do so, it will leave a space in the market and a need that is not being addressed. And it’s only a matter of time before someone notices and sets up a new charity.

Stella Smith is a consultant and facilitator

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