Mergers are on the horizon

Mergers are on the horizon

Mergers are on the horizon

Fundraising | 1 Nov 2006

Mergers are on the horizon as organisations struggle to compete and trusts and foundations change tactics

It's long been said that with 190,000 registered charities and many more applying to the Charity Commission every week there are too many organisations competing for a limited amount of money. And despite regular calls by the regulator for the sector to consider merging voluntarily, it now looks like market forces may push it upon them.

This is the view of some of the UK's top fundraisers, who reckon that charity mergers will become much more commonplace as small and medium-sized charities are edged out by the larger household names.

Mark Astarita, director of fundraising at the British Red Cross, Tony Elischer, managing director of Think Consulting Solutions, Alan Clayton, managing director of Cascaid and Andrew Muirhead, chief executive of the Lloyds TSB Foundation for Scotland, were speaking at the recent Institute of Fundraising (Scotland) conference in Glasgow.

"I'm not sure small and mediumsized organisations have a future," said Astarita. "I don't think I could do what I did at National Deaf Children's Society today. The pot of money that is available to fundraisers is not getting any bigger and we have to fight harder to get hold of it. I'm not sure what the solution is, especially as I am a director of fundraising for a major charity so am part of the problem."

Clayton agreed with Astarita. However, he said that mergers should not always be viewed as negative. "Organisations will get better at what they do and administration costs will be reduced. There are many charities out there that if they were driven by shareholders would have been merged years ago.

"I'm convinced the government has already decided there are too many charities but won't decide which should fold. Instead they are offering matched funding, leaving it up to the public to decide which should survive."

They are not alone in their perception of the future landscape. In August this year, a survey report by charity law firm Bircham Dyson Bell highlighted how 73 per cent of charity respondents expect a mix of giving fatigue and a shortfall in government funding to prompt many organisations to fold or merge. And the NCVO's 2006 Almanac, published in May, found that more than two-thirds of the sector's total income is generated by just two per cent of its organisations, leading to predictions of a 'shake-out' among smaller charities.

Influencing tomorrow's donors

To add to the woes of struggling organisations, the fundraisers highlighted how the pool of donors will also alter dramatically, becoming more difficult to target. "Like it or not, that war generation which gives the majority of our income and which is driven by predominantly religious beliefs, are going to die and when they do, who is going to replace them?" questioned Clayton. "What are we going to do to influence tomorrow's generation of donors who are governed by a completely different set of motivations?"

Changes to the way trusts and foundations operate were presented as another factor that looks set to have a big impact on the sector, with Andrew Muirhead raising the possibility of 'common funds' being established. These would be large pots of money that all funders would contribute to, he said, enabling them to collaborate in order to invest in longer-term sustainability. He also talked about how the venture philanthropy model, which sees not just money but contacts and expertise forming a funding package, is beginning to shape opportunities on offer - and fundraisers could expect to see more of this style of funding in the future.

"More and more grantmakers feel like investors with the heart taking second place to the head," said Muirhead. "Charities need to show they have the ability to make things happen."

This feeling was echoed in the conference opening plenary, when self-made millionaire and venture philanthropist Chris Gorman urged charities to change according to the funding landscape. Speaking in relation to gifts made by major donors such as himself, he said: "It's not just a case of getting the money and then we entrepreneurs leaving you alone. Let us use our experiences to help you strategically so you become more effective and thrive. Charities must truly embrace the opportunities this presents."


[Cancel] | Reply to:

Close »

Community Standards

The community and comments board is intended as a platform for informed and civilised debate.

We hope to encourage a broad range of views, however, there are standards that we expect commentators to uphold. We reserve the right to delete or amend any comments that do not adhere to these standards.

We welcome:

  • Robust but respectful debate
  • Strongly held opinions
  • Intelligent relevant discussion
  • The sharing of relevant experiences
  • New participants

We will not publish:

  • Rude, threatening, offensive, obscene or abusive language, or links to such material
  • Links to commercial organisations or spam postings. The comments board is not an advertising platform
  • The posting of contact details for yourself or others
  • Comments intended for malicious purpose or mindless abuse
  • Comments purporting to be from another person or organisation under false pretences
  • Gratuitous criticism, commentary or self-promotion
  • Any material which breaches copyright or privacy laws, or could be considered libellous
  • The use of the comments board for the pursuit or extension of personal disputes

Be aware:

  • Views expressed on the comments board are left at users’ discretion and are in no way views held or supported by Civil Society Media
  • Comments left by others may not be accurate, do not rely on them as fact
  • You may be misunderstood - sarcasm and humour can easily be taken out of context, try to be clear


  • Enjoy the opportunity to express your opinion and respect the right of others to express theirs
  • Confine your remarks to issues rather than personalities

Together we can keep our community a polite, respectful and intelligent platform for discussion.

Free eNews

Two-thirds of charities concerned about post-election funding cuts, says survey

24 Apr 2015

Two-thirds of charities, surveyed by accountancy firm Baker Tilly, have said that they fear reductions...

Retail charity bond raises £27m and closes early

23 Apr 2015

A retail charity bond offer for Hightown Praetorian and Churches Housing Association closed early after...

High Court refuses judicial review over Camphill Village Trust human rights dispute

23 Apr 2015

Camphill Village Trust residents and co-workers have formed a community branch of Unite the union, as...

Tower Hamlets grants-for-votes mayor found guilty of electoral fraud

23 Apr 2015

Lutfur Rahman, the former mayor of East London borough Tower Hamlets, was yesterday found guilty of electoral...

Conservative right-to-buy plans 'may be unlawful under charity law'

23 Apr 2015

Conservative plans to extend right-to-buy rules to housing associations would force charities to sell...

Record number of food vouchers issued by Trussell Trust foodbanks

23 Apr 2015

More than one million food vouchers issued were issued by the Trussell Trust over the past year, according...

Charities 'need a complete culture change' for digital transformation, says report

24 Apr 2015

Digital teams need to develop better relationships with colleagues in IT and elsewhere in the organisation...

Comic Relief launches grants programme for digital projects

24 Apr 2015

Comic Relief has launched Tech for Good, a new grants programme to help charities run digital projects...

A third of Britons donate to charity by text message, reveals survey

23 Apr 2015

Over 30 per cent of Britons donate to charity by text message and 61 per cent now donate through online...

Join the discussion

Twitter button