To merge or not to merge?

28 July 2010 | By Cause4 staff

Last week Westminster and Hammersmith and Fulham Councils released plans to merge their education departments in ‘what they admit is a high-risk attempt to shave millions from their budgets.’ It is a move which has been welcomed by Eric Pickles, the Government’s Community Secretary and new co-chair of the Big Society Ministerial Group. It also has interesting relevance perhaps for charities.

The idea of mergers is not a new one, but for the Third Sector though the word ‘merger’ is about as welcome as the Grim Reaper. Parochialism and feelings of personal affront, concerns about identity and names, difficulties about managing assets and staff mean that far too often exciting possibilities become inevitable improbabilities.

The Charities Act of 2006, in a move designed to encourage partnerships between organisations, made mergers both simpler and a more attractive prospect. As Gareth Morgan, Director of the Centre for Voluntary Sector Research at Sheffield Hallam University, points out ‘There are good reasons for smaller charities to consider merging, especially if it enables them to create a single organisation with a broad enough reach to bid for serious contracts to deliver public services.’

He goes on to highlight many practical benefits, suggesting that ‘it is often difficult for small charities to secure the range of trustees with the skills they need – whereas several charities coming together may have a wider pool of potential trustees to draw on.’ And what about the funding implications? Caroline Shaw, Chief Executive at The Voluntary Development Agency and Voluntary Action West Kent, correctly points out that ‘there’s a huge amount [of charities] all fighting for funding,’ implying that charities that recognise that the sum of the parts of more than one organisation will find it easier ‘to make a bid in the name of a single charity’.

It is Ann Blackmore (Head of Campaigns and Communications at NCVO), however, who provides the most pertinent thinking. Mergers, she argues, ‘should be based on what’s best for delivery on charitable objectives’. In the current economic climate with government spending cuts inevitably reducing the services available, is it not time for charities to cast aside their fears, act collaboratively and do what is best to provide greatest benefit? Mergers might not be for everyone, but partnerships are essential.

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