The article below appeared in Third Sector online magazine
Although there have been many failed mergers, the problem has been lack of will and poor implementation, not that the concept was wrong in the first place
In the May/June edition of Third Sector, there were three articles about charity mergers. One, on the merger of Bowel Cancer UK and Beating Bowel Cancer, was positive. The other two, by Stella Smith and Paul Streets, were considerably less so.
First, my cards on the table. I am with Prince William on this: there are too many charities. Every time I read about a high-profile new charity set up on the back of someone’s tragic circumstances, I cringe at the thought of a set of professional fees and another layer of admin, the price of which could be used for direct charitable expenditure with the right existing charity. Again, let me be clear: there will occasionally be a need for new charities, but often there is already a charity in existence that, with the judicious use of a restricted fund, can make better use of the money.
Likewise, not all mergers work, and the sector is littered with failures. However, in most cases the problem was a lack of will and poor implementation, and not that the concept was wrong in the first place.
Let us consider mergers in the professions or in the case of public or private companies. Yes, these mergers take place in the belief that it will make the merged entity more efficient, effective and more profitable. For profitable, read "create more resource for the beneficiaries" and there is no difference. Yes, such mergers can fail, but they fail for the same reasons as charity mergers: poor planning, cultures that are incompatible and lack of clarity about what constitutes success.
In truth there are very few "equal" mergers. More often a merger involves a larger entity taking over a smaller one (though it occasionally happens the other way round). However, just as the directors have a duty to their shareholders and partners to their fellow partners, so trustees have a duty to their beneficiaries. Let us not forget the employees: not all mergers mean job losses, although some do and, when a charity fails, everybody loses.
Economies of scale have their place in the argument, but a so-called larger organisation does not have to lose the personal touch or become more remote. It is all about the planning and what the beneficiaries can gain. Quite often the merged entity can provide more, not less, because it now has the resources to do so. But above all you must be clear about the benefits sought and whether they can be realistically achieved.
I am all for cooperation, collaboration and joint ventures, and these can all be the right solution to a problem. The sector is renowned for being quirky and haphazard. Let us not lose that, but remember that quirky does not preclude merger. I know that some trustees will see this article as the equivalent of turkeys voting for Christmas, but let us remember why we work in the sector in the first place – to get things done and to help the people who need our help. So don’t dismiss the idea of merger out of hand and be open-minded about the benefits.
Elliot Harris is founder of Strategy and Governance