Crisis, the charity for single homeless people, is to merge with Off the Streets and Into Work.

Duncan Shrubsole, director of policy and external affairs at Crisis, said the two charities hadn’t yet “dotted all the i’s and crossed the t’s” but a full merger was on the cards.

He said Off the Streets (OSW) was seeking out prospective merger partners and had approached Crisis. “They couldn’t get good funding for their projects, the climate out there is very unstable, and it’s difficult to cover core costs,” Shrubsole said.

Crisis has taken over or merged with a number of smaller charities in the past, among them St Botolph’s and Health Action for Homeless People.

The enlarged organisation will retain the name Crisis, but Shrubsole said it would be a “merger of interests” rather than a takeover.

The two organisations are still working out whether any job cuts will be necessary, though Shrubsole said the aim was to move all OSW staff over to the new organisation. He did not know what role there would be for Frances Mapstone, the OSW chief executive who joined the charity in August 2008. Mapstone was unavailable for comment.

In the year to 31 March 2009, OSW had income of £1.22m and spent £1.32m. Revenue had fallen steadily since 2007, when it was nearly £2.6m (2008: £1.8m).

The chief executive’s report of 31 March 2009 admitted it had been “another challenging year”, with financial challenges relating to “the changing commissioning environment for welfare-to-work contracts with an increased focus on payment by results and a reduction in the previously available grant funding”.  She said the organisation had “evolved further into an organisation which delivers services to homeless people and the homeless sector rather than co-ordinating services”.

The trustee’s report admitted that at the half-year point the organisation was facing a potential deficit of £160,000 for the year, and though they managed to turn this around and break even in the second half, “the trustees are aware of the urgent need to diversify and grow OSW’s income streams and are actively pursuing a range of funding opportunities”.

At the year-end the charity had unrestricted reserves of £123,000 but reckoned it needed £270,000 to cover six month’s operating costs.

In December, a survey of 175 charities by auditors Baker Tilly suggested that one in three was considering merging with another charity, and one in six was thinking about joining a commercial organisation to ensure survival.

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Directory: Baker Tilly | Crisis