With growing interest in mergers across the voluntary sector, this issue of our Governance Blog explores what a charity merger involves and why it might be the right step for your organisation.
What is a Charity Merger?
The Charity Commission states that a merger of charities usually means two or more legally separate charities coming together to form one charity under one governing document and one body of trustees. In most cases, charities can only merge with others that have the same or closely aligned charitable purposes.
Why Might Charities Choose to Merge?
The National Council for Voluntary Organisations (NCVO) identifies two types of drivers behind charity mergers: internal (from within the organisation) and external (from the wider environment). Some of the drivers listed below may sound familiar.
Internal reasons may include a desire to:
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improve the services your organisation provides
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make better use of existing resources
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benefit from shared knowledge, skills and experience
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raise your public profile
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recover from the loss of key staff or trustees, such as a Chief Executive or founder trustee
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protect the organisation from closure
External drivers might include:
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feedback from stakeholders following consultation or research
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navigating an increasingly uncertain environment, particularly in relation to funding
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competing locally with organisations offering similar services
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funders encouraging a reduction in duplication
If you decide a merger may be a suitable step for your organisation there are many factors to consider. The Charity Commission has produced a handy checklist of 25 things to consider to ensure your merger is successful and legally compliant:
Additionally, if you would like to read more on the specifics of how a charity can merge with another, please see this guidance from the Charity Commission.
If you need further guidance on mergers, please contact our Core Services Team by telephone at 0191 643 2626 or by email at development@voda.org.uk.
You can read more about mergers in this guidance from NCVO.
