In February we published our latest Good Merger Index, looking at charity mergers in 2019/2020. This included an expanded look up to October 2020 to try and capture more of the onset of COVID-19, and we found a ‘stable’ picture, suggesting the pandemic was not thwarting charity mergers. But the picture for charity mergers in 2021 remains of interest.
What impact is COVID having?
In the past we have also noted a phenomenon we call ‘merger month’, where a substantial chunk of charity consolidation is timed for the turn of March/April and the new financial year. 20% to 25% of all charity mergers are announced or finalised around this time. In 2021, we have seen 17 mergers in this period (against 16 in 2020).
Some referenced the backdrop of COVID as part of their decision to merge – Bromley-based homeless organisations LATCH and Bromley Homeless Shelter described “challenging times in which both charities continue to see many approaches for support with homelessness situations” in their explanation to supporters. Two hospice charities in Staffordshire recently finalised a merger that had been delayed from an original announcement back in March 2020, reporting that “on the back of the pandemic, important fundraising streams at both hospices, including the running of charity shops and major events, have also been hit”.
In other cases, the current situation has led to the deepening of existing collaboration. Sister disability organisations Remap 2010 and REMAP Scotland merged to “re-energize the charity as we emerge from the pandemic” by forging more of a coordinated national presence, while paediatric research subsidiary Sparks fully merged with Great Ormand Street Hospital Charity, citing “the economic impact of Covid-19”. And in Wales, three significant substance misuse organisations with a combined turnover of £20m – Hafal, CAIS, and WCADA – have built upon an existing collaboration to merge fully as ‘Adferiad Recovery’. The new organisation will be led by the former chief executive from Hafal, with CAIS’s former CEO on the board and another from WCADA in the executive team. Adferiad have explained that the merged organisation “will bring together the broad range of skills, knowledge and experience”, enabling them to better support “clients with complex needs to plan and achieve recovery”.
The growth of Forward
Last but not least, another big deal was the announcement on April 1st that the £5m charity Action on Addiction would be merging into £21m ex-offender and employment organisation Forward Trust. This builds on Forward’s previous growth through mergers with Blue Sky and specialist offender housing charity Vision, but this latest consolidation is significant because it will strengthen Forward’s substance abuse arm and create a much more holistic service for those facing multiple issues. The two charities explained that they are “joining forces in response to an ever-pressing post-COVID surge in demand, and combining their expertise to create a powerful voice to achieve lasting change in relation to addiction and recovery”.
What this variety of new arrangements tell us is that COVID is still not stopping charity mergers in 2021, with organisations undertaking significant new partnerships to create joint service offers for beneficiaries and strengthen their finances. And in some cases, it has even spurred them on.
David Garratt is associate director for mergers and partnerships at Eastside Primetimers, and a former chief executive at Refugee Action. You can contact him at email@example.com if you would like to sign up to seek a conversation about merger support.