As we observed last year, the end of the financial year brings a flurry of charity mergers in March and April – and this year was no exception. My firm counted at least 10 mergers and some common trends were demonstrated across them.
Many organisations continued to merge in response to financial pressure, including public cuts and shifts in commissioning. In North London, the board of an innovative user-led homelessness charity Lift agreed to merge into national charity Crisis, citing local authority cuts affecting the income Lift relied on for housing and advice services. Chief executive Atara Fridler outlined her experiences in a frank and forthright blog, stating the decision to merge was “neither an easy nor an obvious one but it was the right decision”. I have worked a lot with Fridler over the years and I am sure this will be a great move – helping this dynamic chief executive to cement the legacy of Lift’s work and giving her new development opportunities within a larger organisation.
In Kent, Medway Crossroads completed a previously announced merger into Carers First. They had previously worked together as Carers Trust network partners, an example of organisations dating before marrying. Medway had also seen two years of deficits and lost a key contract in July 2014, prompting it to search for a new strategy in order to rebuild the organisation. The newly merged organisation hopes to build new models of service delivery and allow carers to access a ‘one-stop shop’ for support.
Another common trigger for merger is the retirement of a chief executive, which removes the competition for the top spot that complicates many attempts and creates a juncture at which charities explore their options. In Devon and Cornwall, local learning disability charity Robert Owen Communities became a subsidiary of United Response following the retirement of ROC’s chief executive, David Wilson, after more than 25 years at the helm. ROC will continue to trade under its current brand until next year, and then its services will be relaunched under the United Response name.
A key area of merger activity has also been the health and social care sector – these accounted for 43 per cent of merger deals in 2014/2015 and 53 per cent in 2013/2014, according to our Good Merger Index. Take for example, the creation of Scleroderma & Raynaud’s UK, from a merger of the Scleroderma Society and the Raynaud’s & Scleroderma Association. SRUK is the only charity dedicated to Scleroderma and Raynaud’s, both auto-immune, connective tissue conditions, and it is hoped that the creation of a single national charity will aid transformation and growth in terms of profile and funding.
I have a personal interest with this one as my firm, Eastside Primetimers, has been advising SRUK on its merger and has helped it to establish a new legal entity and integrate systems. This rare example of a ‘merger of equals’ brings two similar sized organisations into a single entity with governance pooled. It is the hardest type of merger to implement because there is so much on the line – and it requires the people on both sides to set aside differences and embrace a new common culture and values. It will be one of the few merger of equals in the charity sector this year – not easy but hugely transformational when it works.
This article by Eastside Primetimers chief executive Richard Litchfield originally appeared in Third Sector on June 2nd 2016.