Review of charity mergers for 2013/14

Four percent of people working in the charity sector were involved in a merger last year, according to a new study of mergers in the sector.

The research, carried out by Eastside Primetimers, aimed to collect data on mergers that occurred in England and Wales between January 2013 and April 2014, where the transferring organisation was a registered charity.

The researchers identified 189 organisations that undertook 90 deals, affecting more than 32,000 employees or 4 per cent of the charity sector workforce.

Just over half of all the deals analysed by the study occurred in the health and social care sector, followed by intermediaries (23 percent), faith organisations (17 percent) and community groups (15 percent).

43 percent were deemed to be takeovers, where the acquired organisation completely lost its identity and autonomy, while 23 percent were genuine mergers. 

The researchers also found that charity executives had described their deal as a merger in 58 percent of cases, when in fact fewer than half of these were real mergers, and only 12 percent of deals were called takeovers.

The main driver for merger was the external funding environment.

The study sourced information from the Charity Commission’s Register of Mergers and news in the sector press. It intends to use the findings as a baseline of data that can be used to measure and report on the future progress of charity mergers and provide a benchmark for spotting consolidation trends.

To download the research visit www.civilsociety.co.uk/docs/the_good_merger_report_-_final.pdf.