Charities - merge here!

More and more charities are finding it increasingly difficult to survive on their own, writes solicitor Hauke Harrack.

Many of them are now looking for alternative ways of managing their affairs and some have found the answer in collaborations, mergers, and other similar arrangements.

There are three main reasons for charities adopting this new approach. The first is when change is forced upon them and a good example of this is the way public bodies now contract with charities for services.

Public authorities now often expect charities to deliver a broader range of services under a single contract. Charities have realised that in order to be flexible enough to meet this challenge they will have to work together.

The second is to take advantage of a specific opportunity. In 2009 for example the Government's Real Help for Communities Modernisation Fund scheme offered significant opportunities for charities to explore collaboration and merger opportunities, which might not otherwise have been able to do so.

Grants for both initial advice and for implementation were made available. Under the scheme, Hewitsons' charities team helped many charities across the Midlands and East Anglia.

The third and final reason is to address a challenge. The recession has hit the third sector hard owing to falling donations, investment income and service contract prices. Merging or pooling resources, such as shared helplines, combined grant applications, joint marketing and fundraising campaigns, is becoming an increasingly attractive option for many charities.

For some collaboration is a choice; for others a necessity. Either way, trustees are under a duty to consider any opportunities to increase the effectiveness of their charity in assisting beneficiaries or otherwise developing in their charity’s best interests.  The Charity Commission also supports this and has a dedicated mergers and collaboration unit, together with information online at www.charity-commission.gov.uk/

Hewitsons' Charities team has great experience helping charities with collaborative working and mergers.For more information contact Hauke Harrack on 01604 233233 or click here to email him.