In April 2018 HemiHelp, a specialist condition charity with a turnover of £257k, merged into £5m disabled children’s and family support charity Contact (previously known as Contact a Family). Cara Evans, former CEO of HemiHelp and current Director of Partnerships for Contact, has kindly answered questions for Eastside Primetimers about how their merger happened, the benefits it has brought and what challenges they experienced along the way, providing a real insight for other charities considering doing the same.
Can you describe the background and services of your organisation, and the other you merged with?
HemiHelp provided information and support for families living with Hemiplegia. HemiHelp was set up by a group of parents who were involved in a study conducted by Dr Robert Goodman and Dr Carole Yude into families living with Hemiplegia. Contact provides information and support to families living with a disabled child. Contact was also set up by parents who wanted more for their children. Contact actually helped the parents when they set up HemiHelp in 1991. We have come full circle.
Can you describe the current priorities/challenges in the part of the charity/NFP sector your organisation operates in?
The biggest challenges for HemiHelp were around funding and sustainability. HemiHelp relied extensively on the generosity and efforts of its families. Moreover, it relied specifically on one or two annual fundraising events. Despite receiving some investment, it wasn’t really able to diversify its fundraising.
Do you feel consolidation activity is increasing (or will increase?) due to pressures in your sector, or stay the same?
It has to increase, it makes sense for the sector, the beneficiaries and everybody involved. If we truly believe the purpose of the charity sector, to support its beneficiaries, we have to consolidate and invest the cost savings back into the services we provide.
What were the reasons for the merger?
In December 2016 it was clear that the organisation faced serious financial challenges. Major long-standing donors were approached and we launched an emergency appeal. These allowed some time to review all the options. We also reduced the organisations expenditure by making seven posts redundant. However, this was not enough to stem the tide. The Board decided in June 2017 that to continue as we were meant that we would need to overcome the diseconomies of scale HemiHelp had suffered from since its inception, and which had been the cause of several major financial crises. We believed it would be very difficult to overcome these difficulties on our own.
The trustees decided to seek scale by merging with an organisation with similar and compatible aims. We approached a number of organisations and began discussions with Contact a Family (now called simply Contact) in August 2017.
The main reasons were to ensure the continuation of services for families with hemiplegia.
Did you set any indicators of success or outcome measures?
Yes, we wanted to ensure that we were able to provide our core offer to families and we also wanted to reach more families.
- We have provided a more holistic service for our families and at a third of the cost.
- Families have access to a helpline from 9.30 to 5, as opposed to 4 hours a week.
- We have run two families’ events, which is on a par with previous years.
- We have provided two digital magazines, having achieved significant savings from transferring to a digital magazine from printing and mailing a hard copy.
- Our online peer to peer support group has grown by 20% in the last year, from 4,000 members to over 5,000
- We have secured £100,000 in this year, mainly reactive and unsolicited donations
Were indicators mainly financial/economic, social, a mix or other?
Our key indicators were that:
- We were able to support our families with a more holistic service with fewer costs
- Our expenditure the year before the merger was over £400,000, whereas since the merger we have spent £100,000
- We also wanted to retain our key supporters – the previous HemiHelp chair is now a member of the Contact Trustee Board
- Four Patrons have transferred to the Contact Patron Scheme
All the key indicators have exceeded our expectations.
We are also currently running a survey to see how our supporters have viewed the merger.
Is the combined income and expenditure higher or lower as a result of merger, or expected to be?
When we merged we brought over £122,000 and we have raised £122,000 this financial year
In the private sector mergers are often said to destroy (shareholder) value, but in the not-for-profit sector it is hoped that they add them. Has this been your experience? What value has been created and what value has been destroyed?
It was very hard for some loyal supporters to understand the need and desire to merge. But apart from a small collection of voices, we have had minimal concerns expressed. In terms of added value, we are offering a much more holistic service to our families at a third of the cost. We can reach more families, as Contact is a larger charity, and we have the added value of being a powerful campaigning voice.
What structure resulted from the merger and has it worked as intended?
Technically HemiHelp was taken over by Contact. This was really the only option open to us and it is currently working as it was intended.
How did the merger discussions begin?
In July 2017 Hemihelp Trustees and I were considering all options for the future of the charity. As CEO of HemiHelp, I contacted the CEO of Contact, Amanda Batten, and we met in July 2017. We explained our situation and desire to be taken over. Amanda then discussed the proposal with Contact’s Trustees, and we arranged a discussion with the senior management team of Contact and two Trustees from HemiHelp over that summer, to talk about the concerns of the HemiHelp Trustees and answer any questions from Contact.
In the Autumn we agreed to go ahead with the due diligence process. We also invited Contact staff to attend a HemiHelp Board meeting in November 2017 to discuss what would happen to the HemiHelp services when it transferred to Contact.
The due diligence process was completed in January 2018, when the HemiHelp Trustees met Contact Trustees to check over the information and decided to go ahead. In March 2018 the HemiHelp Trustees held their final Board meeting to confirm the takeover. Then from the 1st of April 2018, HemiHelp was officially part of Contact.
How did you evaluate the benefits and risks associated with the merger?
The decision-making process happened over the course of a year. Once our Trustees decided in June 2017 that the charity needed to close the office and reduce to a core offer with effectively one member of staff, there really was were only three options; shut the charity down, relaunch, or merge with another charity.
How did you manage staff and trustee involvement and expectations?
From December 2016 a number of new communications were introduced, with an aim to keep staff, trustees, beneficiaries and stakeholders well-informed at every step of the process we went through:
- There was a weekly catch up with all staff – the CEO kept all staff aware of the discussions with Trustees, at a level agreed with the Trustees
- Once the financial crisis was identified in December 2016, we began bi-monthly Trustee meetings (which became monthly from April 2017)
- The Patrons were updated on a monthly basis, following the Trustee meetings
- We launched an emergency appeal in December 2016 to all contacts on our database
- We followed up with a detailed article on the challenges we were facing in April 2017 in the HemiHelp magazine, which went to 5,000 members at that time
- We mailed all 6,000 members and key stakeholders in July 2017 to explain the need to close the office and reduce to a core service
- We contacted key partners, supporters and founding members directly by personal email or call in June 2017 to explain what was happening.
- We sent a survey to all members over the summer of 2017 to get feedback on whichservices they valued most highly
- We then used the magazine that was sent in September 2017 to update beneficiaries that the Trustees were looking at options for the future of the charity
- We were writing to the Patrons and longstanding supporters each month
- We contacted key partners, supporters and founding members directly in March 2018 to further explain what was happening
- We provided updates on our Facebook page and online support group.
- We then wrote to over 6,000 members on the database to explain the merger
- We also contacted all our regular donors no less than seven times during the process to encourage them to transfer their regular gift to Contact, on the proviso that it would be restricted to our work with families living with hemiplegia
- The week of the official take over, we wrote to the database and we sent the latest update in the magazine
- We have continued to update all supporters via the bi-annual magazine and on our Facebook page
- While this process was happening, we also maintained the core service with one full-time equivalent member of staff
Did you have any issues with funders or commissioners, or did they encourage merger?
We contacted all donors and funders and agreed that any restricted funding – which was minimal – could be used to manage the transition to Contact
How decisions were reached about the structure of the merger and who drove decision-making (both within and between the organisations)?
The decisions were made between HemiHelp Trustees and Contact Trustees, with the help of the senior management and CEOs on both sides. As HemiHelp chief executive, I suggested and developed the structure and plan with input from Contact team.
Has identity been an issue and how was it resolved?
This was quite a big concern for the Trustees of HemiHelp and for many of our loyal supporters. In the event, we agreed that we would keep the name following the merger, as a sub-brand of Contact. After much discussion we were able to agree a brand and name that we would use on any specific services that were specifically for families living with Hemiplegia. When we launched this identity, on balance there were minimal concerns, but there were a few dissenting voices. We worked hard to demonstrate to these stakeholders that we have delivered a more holistic service at a third of the cost.