Philanthropy | For Goodness’ Sake

The mergers that herald the age of the super-charity

It’s not just businesses that are benefiting from mergers

The mergers that herald the age of the super-charity

Image: David Humphries @ Monster

September 04 2009
Claire Wrathall

Just as the past 18 months has seen the merging of a number of financial institutions in an effort to shore up resources, cut costs and secure their future, so you might have expected charities to follow suit. Indeed, earlier this year two of the biggest voluntary organisations focused on helping the UK’s growing elderly population, Help the Aged and Age Concern, merged to form a super-charity, Age UK. Now the largest organisation for older people in the country, its aim, according to Michelle Mitchell, charity director of the combined body, is “to deliver more and better for older people”.

Both charities do remarkable work across a wide spectrum, from research into Alzheimer’s and age-related health issues to providing advice on using computers, travel insurance and campaigning against abuse and discrimination in the workplace. By merging, Mitchell hopes to reduce any “duplication that exists between the two”, allowing them to invest that money in core services and establish “a greater and more powerful voice”.

Yet, despite research for the Charity Commission that found that 64 per cent of charities with annual incomes in excess of £1m were concerned the downturn would impact on their ability to deliver, the voluntary sector remains resistant to the notion that there is safety in consolidation, with just three per cent of 1,003 charities polled saying a merger was something they would consider. Perhaps, then, it isn’t surprising that the publication of a report, What Place for Mergers between Charities? by the think-tank (and charity) New Philanthropy Capital, has met with some hostility. Its author, John Copps, knew it wouldn’t necessarily go down well. “Merger is a dirty word in the charitable sector,” he writes, “implying aggressive and predatory behaviour.”

Copps cites four particular areas in which he thinks charities might benefit from merging: literacy help in schools, debt advice helplines, grant-making trusts and breast cancer research, a sector in which several charities – Breast Cancer Care, Breast Cancer Hope, Breast Cancer Relief, Breast Cancer UK – would seem to be working towards the same goal. But Copps’s suggestion that Breast Cancer Campaign and Breakthrough Breast Cancer, both of which exist to raise money for research, might consider joining forces did not go down well with BCC’s chief executive, Pamela Goldberg. She concedes the two are “complementary”, but is adamant “there is absolutely no evidence that a merger would produce significant savings. Our individual evaluations indicate there is more potential to maximise fundraising opportunities by having two separate charities,” she writes on its website, conceding that “Although we share the same aspiration… we currently believe there would be less money for breast cancer research by merging.”

Yet surely this underestimates the altruism of donors: are they really so partisan that they would cease to support a charity because it had merged? Especially when experience suggests that merging charities can actually boost donations. In 2006, the NSPCC’s annual income was about £116m, making it one of the UK’s largest charities. That year it merged with ChildLine, a confidential free telephone helpline for children worried about anything from exam anxiety to domestic violence. ChildLine’s income was then about £15m, and its trained counsellors managed to answer about half the calls it received.

Since the merger, the charity’s income rose to over £147m last year, and the number of calls it is able to answer – it gets about 2.7m annually – has risen from half to two-thirds. And, as Copps reveals, the merger provided “an extremely valuable source of information on what children worry about”. He even adds: “When staff were transferred from ChildLine to the NSPCC they found they were better off in terms of their employment.”

Despite this success story, Copps stresses “the report is not an evangelical call for mergers”. There will always be a need for some small, locally focused charities. And there will always be losers when one organisation merges with or acquires another. But the less a charity spends on administration, the more funds it has to do good with, and isn’t that what philanthropy is all about?