Is your charity considering a merger or should it be?

The most recent Good Merger Index report shows that charity mergers are at an all time low, confounding post-pandemic expectations. Like almost everyone else supporting charities with mergers, we wrote about this a couple of years ago and our prediction was that there would be an increase in mergers as the financial and other impact of the pandemic started to bite on charities, many of whom were already struggling to raise enough money to meet demand.

The report suggests that the low rate of charity mergers shows that charities have navigated the impacts of the pandemic better than feared. We agree but the funding impacts are only now coming to bear on most starting to be felt by many, with the double whammy squeeze on fundraising caused by the pandemic and the cost of living crisis.

The publishers of the report, Eastside People, report a 70% rise in enquiries about help with mergers in the last 12 months, mirroring our own experience.

Given the perfect storm facing many charities, now is a good time for charities to be thinking about mergers. As our previous article explained, there are many factors to consider when thinking about a merger, in particular:

• Is there a good values and culture fit between the charities considering a merger?

• What are your objectives for the merger?

• What will happen to the people (Trustees, staff and volunteers) following a merger?

• What structure will the merged charity have?

• What will be the costs of the merger and are they justified by any savings or extra impact that will arise once things have settled down after the merger?

Unless you need to merge quickly to avoid a disorderly financial collapse of your charity, we always recommend taking time to work through these and other issues before getting into the formal due diligence and legal work. That can be expensive and the money would be wasted unless you have satisfactory answers to the key questions of principle. You may be able to work through these issues yourself but it can often help to have an independent facilitator to help you navigate the complexity, make sure you ask the right questions and help you find the right answers for your situation.

If you would like to find out more about how to make mergers successful or about our services for supporting collaborations and mergers more generally, please contact us at julian@almondtreeconsulting.co.uk to arrange free initial telephone discussion