# Will tough times mean more charity mergers?

- Link: https://fundraising.co.uk/2008/12/18/will-tough-times-mean-more-charity-mergers/
- Published: 2008-12-18T15:05:57+00:00
- Author: Howard Lake

Earlier this month William Foster and two colleagues from the US nonprofit consulting
group Bridgespan published an interesting article in Chronicle of Philanthropy on
mergers in the nonprofit sector. http://www.bridgespan.org/LearningCenter/ResourceDetail.
aspx?id=2450

Their research shows that mergers and acquisitions are as common in the nonprofit
sector in the US as they are in the commercial sector. But it is mostly smaller 
charities which are merging – mergers between large charities are rare. When mergers
do occur they tend to be for opportunistic reasons – financial problems or a CEO
moving on.

Anecdotal evidence suggests a similar situation pertains in the UK. The creation
of CRUK and Age Concern and Help the Aged’s impending merger are notable for being
so unusual.

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Yet growth through mergers and acquisitions can achieve significant scaling of impact,
pooling of knowledge and reductions in overhead. This is demonstrated by the Arizona
Children’s Association case study presented in the Bridgespan article.

Foster and his colleagues suggest two main reasons why mergers between larger charities
are rare. First is the lack of a profit motive which is the primary driver of M&
A activity in the commercial world. Second is the dearth of matchmakers.

Funding pressures over the next few years might provide a spur to more merger activity.
What could really help though is for someone to start providing the encourgament,
advice and support needed by charities wanting to explore mergers.

How long before we see an agency like Think Consulting or The Good Agency start 
to offer M&A advice? There are plenty of people with commercial M&A experience looking
for work.

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