Tuesday, June 9, 2009
New Philanthropy Capital, a UK think tank that researches topics relating to charities, has issued on interesting report titled "What Place for Mergers Between Charities?" While focusing on UK charities, it raises points that are also relevant to charities in other countries. Here is the summary from the NPC's website:
- Evidence suggests that mergers between charities are not very common, particularly among larger organisations. ‘Merger’ is a dirty word in the charitable sector as it seen as implying aggressive and predatory behaviour.
- Most mergers between charities seem to occur in response to crisis—usually financial problems or the loss of key management—rather than an explicit desire to further charitable purposes. This is because the culture, structure of control, and personal passion invested in charities by their staff tends to favour the status quo.
- The lack of information available on charities and the sectors in which they work is an important obstacle to the occurrence of mergers, as it makes it hard to spot opportunities for collaboration. Better information and analysis would help trustees and managers to make better decisions.
- It should be part of a trustee’s role to consider whether a merger is a way to fulfill its charitable purpose more effectively, even if this means the eventual winding down of the charity. This requires trustees and managers to think beyond the limits of their organisation: the question is not what works best for the charity, it is what works best for the community in need.