Are wholesale mergers the answer for Charities struggling with the new funding and commissioning environment in this brave new World of the Big Society?
Day two of our Future of the Third Sector conference with the Third Sector Research Centre began with presentations from Steve Wyler of Locality, an organisation created by the successful merger of BASSAC and the Development Trusts Association, and Stephen Lloyd of solicitors Bates Wells and Braithwaite who specialises in advising charities on mergers and collaborative ventures.
Steve made a convincing case for the approach of the Bassac/DTA trustees, who had cultivated a close relationship for the ten years before the consummation of their marriage. Many potential mergers fail because the chemistry between the parties is wrong and the joint culture is crucial if relationships are to survive and prosper. Egos must not be allowed to get in the way, but in reality the biggest obstacle may be who gets to be CEO and Chairman when two of the four possibles must inevitably lose out.
Sir Stephen Bubb from ACEVO said that big very often is beautiful in the eyes of service commissioners. That is not simply prejudice on their part. The really big charities have business processes as good as any large companies. Small charities mostly do not. That is a major obstacle for Local Authorities who purchase mostlocal services.
Creative charities will find new ways of working, which could mean merging a number of small organisations in a town delivering similar services but might also mean collaborating with other public and private sector providers. There are good examples of shared back-office collaborations already. Charities like all organisations in difficult times need to find ways of removing costs from their operations. That can be a tough call for trustees and staff in the smallest charities, but as Stephen Lloyd said very clearly personal interests must not be allowed to dominate.
At 08.00 today the counter on the Charity Commission’s website recorded 161,773 registered charities. If the Big Society succeeds in its mission to move many services into the voluntary sector that number must fall. Maybe we need a social enterprise or two the size of Capita?
Martin Newlan
Deputy Principal and Bursar
17 June 2011.
