A new Social Investment Business report suggests funding and support programmes should be made more readily available for charities and social enterprises seeking to merge.
A research summary launched today recommends a clear need for support to help charities and social enterprises with mergers and restructure to help them survive and grow in the high pressured economic climate.
The report – Match Points published by the Social Investment Business and written by Eastside Primetimers – features detailed research and engagement with Voluntary, Community and Social Enterprise (VCSE) leaders, social investors and grant-making foundations to reveal a clear picture of a sector not yet able to harness the potential of mergers due to various constraints.
Although often advantageous, mergers are relatively rare amongst VCSE organisations, with 50-70 concluded annually out of over 160,000 charities registered with the Charity Commission. Many charities go into liquidation rather than planning sufficiently in advance to find a suitable merger partner or developing a new plan to safeguard their services, with the result that their services are placed under extreme uncertainty or are lost altogether.
The research summary looks at key findings in the following areas:
- The various motivations for mergers
- The attitudinal and board-level barriers to merger that must be overcome before mergers can even be explored
- The financial barriers to successful mergers
- The types of support charity chief executives would find most useful and how a specific programme – if structured appropriately – could help organisations considering merger.
The report highlights the need for some kind of ‘pathfinder’ programme to overcome the obstacles to charity merger and draw attention to good practice around mergers, and also the potential of pursuing broader restructure and recovery work.
Commenting on the report Nick Temple, Social Investment Business Chief Executive, said,
“We know from our work with hundreds of charities and social enterprises that the right advice and support in difficult times can make a huge difference. We also know that more and more organisations are facing those difficult times. This report demonstrates the importance of specialist, targeted support and finance for organisations of all types to help them explore the options and stay resilient."
Richard Litchfield, Chief Executive of Eastside Primetimers said:
“We are delighted to see the launch of this report, which involves in-depth qualitative research into the attitudes and experiences of charity managers around merger. Further, it marries this with the perspectives of leading sector funders about how the merger needs of VCSEs could best be met. We hope this goes some way towards illuminating how financing can make it much easier for charities to merge and restructure.”
Read our Chief Executive's accompanying blog.