Mergers reach a critical mass?

This autumn has been littered with headlines of new organisations springing into life through collaboration and mergers. We have noticed in the last week three more mergers have been announced in the third sector – Prostate Action, Basaac and Richmond Fellowship.

So are mergers now here to stay?

In early 2009, Eastside started to take greater interest in mergers & acquisition as a strategy for leaders of third sector organisations.

At the time I wrote a blog saying that we expected to see a rapid increase in the number of mergers as the credit crunch (remember that!) would force senior execs to find new ways to survive the recession.

Well, it seems we got ahead of ourselves since it is only now that charities in any meaningful numbers are taking the plunge and seeking opportunities to get together. The new government’s programme of cuts has set the conditions. Necessity is the mother of invention as they say.

Here at Eastside we have seen requests for support in this area rise. In the summer we hosted a series of seminars to 30+ organisations on the topic. We are currently assisting a large charity with an acquisition and helping a social enterprise search for a parent/investor.

While recent mergers tell us much about the harsh realities of the times, the trend itself is a positive one and should have a positive effect on performance and impact. It is long overdue. Mergers can play an important role and enable charity managers to increase their social returns just as they help those in business maximise profits.

Successful mergers help organisations to reinvent and strengthen themselves. They shouldn’t be undertaken lightly. But when they work, they help us become more efficient, to reduce duplication of services and give more value to funders and beneficiaries.

I’m excited by the current trend and encourage executives and Boards to think of mergers and collaboration as an essential management tool in these times of change.

For more information you can check out an online resource we are starting to develop around mergers and see our comment in the Guardian Social Enterprise Network. Please let us know if you are aware of any examples of social enterprises or charities merging that are not featured here.