Sarah Ediss FCA
- Accounts and Audit Partner
- +44 (0)330 124 1399
- Email Sarah[email protected]
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The government has now clearly set out its roadmap to ease COVID-19 restrictions and allow society to return to some form of normality. Now is therefore a good time for your charity to revisit its own roadmap and consider whether this is fit for purpose. There is still a lot of uncertainty which makes it difficult to plan but there are also some opportunities to consider. One of the potential opportunities to reflect could be a merger or close collaboration. This may be an option to help your charity adapt and evolve in the post-Covid world.
There have been some high profile successful charity mergers over recent years. Cancer Research UK resulted from a merger of previously competing charities – Imperial Cancer Research Fund and The Cancer Research Campaign. More recently, in November 2020, YoungDementia UK merged with Dementia UK, unifying work for older and younger people affected by the disease. Our charity team have seen this trend replicated more locally, with some of our clients considering a merger when they are discussing their plans for the future.
During these unprecedented times, where this sector has seen significant losses of income alongside rising demand, it makes sense to see charities join up to create a more efficient combined entity reducing duplicated costs. For some charities there will be no other choice – their backs are against the wall only being sustained by the government coronavirus job retention scheme. However, for many charities this is a positive decision when they revisit their long term strategic plans. This is not about survival but about positive change and growth.
If researched and implemented well, a merger can help a charity deliver its objectives more effectively. The board should be asking whether they could help more beneficiaries by working more closely or merging with another charity. Sharing resources and overheads could allow limited funding to go further.
The key points to consider as part of the initial thought process are:
The structure doesn’t always have to be in the form of a full legal merger. There are various collaborative solutions which can still create significant benefits and impact. For example, agreeing to share costs on a specific joint project or providing back-office support to a charity without this resource. It is important that any form of collaboration is carefully documented to reflect the agreed responsibilities and liabilities.
Whatever plans the Trustees and executive team are contemplating don’t forget to ask for advice from the Kreston Reeves charity team. We will be happy to help and to provide advice using our many years of combined experience.
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