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Merger blog: The full charity Good Merger Index report can be downloaded here:
Social sector consultancy Eastside People has launched the 10th edition of the Good Merger Index (2022/23), the review of merger data across the charitable sector in England and Wales. While demand for charities’ services is growing at an ever-increasing rate, many face existential threats due to rising costs, falling funding and deceasing donations. In addition, ahead of the Spring Budget in March, charities have asked the Chancellor for additional support to protect the immediate and longer-term financial health of the sector.
Over the last 12 months, Eastside People has seen a 70% rise in the number of enquiries from charity leaders looking for expertise in managing and delivering merger and partnership projects. Despite all this activity, however, the GMI research found that there were only 48 successful mergers between 96 organisations during 2022/23, 6% fewer than the previous year and 37% down on 2020/21, the lowest number since the GMI started with the year 2013-14 and a tiny proportion of the total industry1.
Mergers, in most cases, do not happen quickly. Decisions taken to merge may be made a year or more before completion (before 2022 for some of the charities covered by our research), at a time when the sector was still feeling the impact of the Covid pandemic but protected in part by furlough monies and emergency government and charity grant funding..
Merger data from 2022/23 provides the facts, but we are 12-18 months further on from the circumstances and decisions that will have started those merger discussions. Indications are that conditions today are worse for both society and the sector with many not-for-profit organisations sadly being forced to close their doors for good when a strategic approach to merger or long-term partnership may have been an alternative solution.
“Despite these findings, Eastside People has seen a 70% increase in enquiries and a 30% increase in merger related projects in the last 12 months. Success stories such as those from Keech Hospice Care, Rennie Grove Peace Hospice Care and Kisharon Langdon show that mergers are an option to consider and can enhance the services and support that their beneficiaries need.” said Cara Evans, Head of Partnerships and Mergers at Eastside People.
Key Stats (Financial data is from the year prior to merger and which were completed by 30th April 2023):
The launch of Eastside People’s latest Good Merger Index (GMI) Review took place on Wednesday 7th February 2024.
Our panel of experts who all had recent experiences of charity mergers, partnerships and closures were:
Watch the recording of the launch event to hear what the report found and what our panellists had to say.
We actively recommend that charities consider merger as a strategic, rather than reactive option and believe that there will be an increase in merger and partnership discussions and implementations in 2023/24, as more charities consider the benefits of collaboration and are able to find a way forward by working together.
Cara Evans, head of Partnerships and Mergers, Eastside People