Charity Executives wanting to announce acquisitions are cautious about choosing language from the private sector. But the bland announcement written by PR advisors reveals little, can cause confusion and raise false expectations. And these have a have a habit of haunting organisations.
In December Catch22 announced that it had acquired five independent schools from the education charity CfBT.
It’s a straightforward transaction with Catch22 paying a fee to CfBT for the future cash flows arising from running these schools.
On the face of it this is a good deal for both parties. It will contribute to the social purpose of both organisations. CfBT gets cash to reinvest in its core work, while Catch22 gets an asset with which it can make a positive impact on the lives of the young people involved. This is what Catch22 does.
Refreshingly both organisations are very transparent about this arrangement.
Catch22 commented in the press about ‘purchasing’, and Steve Munby the chief executive of CfBT explained that his organisation was ‘divesting’ the schools as part of a strategic review.
The reporting grabbed my attention because it’s rare to hear words such as acquisition, takeover, purchasing or selling used by not for profits.
Many charity leaders that I have spoken to are confused by how to describe these arrangements to their staff and stakeholders. When Merlin became part of Save the Children, CEO, Justin Forsyth avoided calling it an acquisition or takeover. “We have deliberately not used that language,” he told the press.
The dilemma is understandable. You’re a charity executive and it’s time to announce your exciting new deal. You want to tell it how it is but you’re cautious about choosing language that seems to be straight out of the private sector boardroom. Externally you might rock the boat with funders, while internally you could alienate staff at a time when you want everyone to get on board.
So we tend to get a bland script which is crafted by PR advisors but reveals little. There are dangers from muddying the water. Acquisitions branded as mergers or amalgamations can cause confusion and raise false expectations especially for the people involved.
These false expectations have a habit of haunting organisations as they integrate and require staff from both sides to come together and work as one.
Where possible charity managers should be transparent and level with the people involved. The success of the deal depends on effective integration, and integration works best this way. Woolly language only adds to the lack of certainty at a time of uncertainty, rather than helps to explain and reassure. This applies to staff and funders.
Looking to the year ahead I hope that we’ll see our charity leaders speak more plainly about how they are reorganising and adapting their charities in the current climate.
There really is no reason for acquisition to remain a dirty word in the charity lexicon given how many charities are taking advantage of acquisitions and other types of restructuring to add new services and re-focus.
Divesting an organisation – or a service – can be an example of real success. It means that you have developed a charitable service to the point where it is valuable to another organisation. CfBT have done just this with its independent schools, as have Merlin too.
It is also an example of excellent management to realise that another organisation can do more with a charitable asset than you can – and this is something that should be praised not frowned upon.