Mergers in the voluntary sector

There is a growing interest in merger among voluntary and community organisations, and in addition to advice and guidance, the subject has generated heated debate and opinion.

Merger is where two or more organisations formally combine to form one organisation. The term merger has no precise legal definition and is used to cover a number of different processes. Some mergers may also be referred to as takeovers. A variation on merger occurs where a parent organisation governs a group of subsidiaries in a group structure – one organisation may become a holding company for another organisation/s. Group structures combine some of the elements of merger, but the subsidiaries can retain substantial independence.

This section signposts to information, news and examples of mergers in the voluntary and community sector.

• NCVO guides
• Other sources of support
• Case studies

NCVO guides

Merger - a model of collaborative working

Merger explores the reasons that organisations merge and the different forms that merger can take. Containing good practice guidance this guide covers the decision to merge, the merger process and how organisations can lay the groundwork for the merged organisation. This guide is not a substitute for legal advice but will help you answer the following questions: 

• What forms can merger take?
• How do we decide if merger is right for us?
• What should we consider during the merger process?
• How can we lay the groundwork for the merged organisation? 

Download Merger model of collaborative working (PDF)

Should you collaborate? Key questions

Should you collaborate? Key questions is a checklist to help organisations decide whether to embark on formal collaborative working or merger. It identifies the key issues which organisations need to consider, giving an idea where problems and complications might lie and enabling them to make informed decisions.

Download Should you collaborate? Key questions (PDF)

Due Diligence Demystified - what it is and how you manage it

This publication gives clear and concise information on due diligence and how to carry it out in the most efficient and cost-effective way. It has been written for small to medium sized voluntary and community organisations to help them understand the due diligence process and what it involves.

It provides a comprehensive checklist of the areas that are typically covered in a due diligence exercise; the documentation required and the main sources of information; and the key questions that need to be asked.

• Find out more about Due Diligence
• Order our publication Due Diligence Demystified

Other sources of support 

Charity Commission

• Collaborative Working and Mergers: An introduction (CC34) introduces the legal and regulatory aspects of collaborative working, merger and due diligence. 2006   
• Checklist for mergers 2009 
• Checklist for due diligence 2009 
• Read the Charity Commission's Policy Statement on Mergers, Collaborative Working and Due Diligence 2007 
• Information about Registering a merger with the Charity Commission 2007 

Other guidance

• Mergers: A guide to literature on mergers for voluntary and community sector organisations is a literature review of available relevant material, commissioned by the London Housing Foundation. 2006 
• Mergers made simple (PDF 67KB) guidance from Sayer Vincent for finance professionals. 2008 
• Special report - Charity mergers a report written for European Association for Philanthropy and Giving, by Stone King Sewell LLP solicitors. 2008 
• The Charity Law Unit at Liverpool University have published two reports on merger:
  - Mergers: A Legal Good Practice Guide (PDF 52KB) 2001 
  - Legal Issues in Charity Mergers (PDF 208KB) 2001 
• The Baring Foundation produced Merging Interests (PDF 370KB) 2000 
• Mix, Match, Merge? - issues and options for charities considering mergers and other partnerships, from CASS Business School (PDF 4,364KB) 2000 
• ACEVO sell Managing Mergers, a practical guide to the management of mergers, based on case studies of CEOs who have led their organisations through the process. 2003

Case studies

• Jobs Education and Training (JET) Derby The story of how services for disaffected youth were able to continue after a charity lost it's main funding contract.
• Wells Old Almshouses and Llewellyn, Charles and Harper's Almshouse Trust merged in 2004 to become City of Wells Almshouses, driving in part by the difficulty that the trusts faced in finding suitable new trustees.
• Milton House and City Roads were two medium sized London organisations working with drug users. They merged to form The Odyssey Trust in 2002.
• Volunteering England was created in 2004 through the merger of the Consortium on Opportunities for Volunteering, the National Centre for Volunteering and Volunteer Development England.
• When it faced financial difficulties, some of National Newpin's funders were prepared to help its services continue so, after discussion, Family Welfare Association, a large national charity, agreed that it would take over the operation of most of Newpin's services.