Catch22, a charity working with disadvantaged people, has today announced that it has acquired criminal justice charity Only Connect.
Only Connect will remain as a fully functioning charity, operating independently from Catch22, but within Catch22’s group structure. Danny Kruger, chief executive of Only Connect, and a former speech writer for David Cameron, has moved to become the chair of Only Connect ten years after he founded it.
There are no redundancies as a result of the acquisition, which took place at the beginning of the month, with Only Connect holding onto its brand, trustee board, charity number and all of its 28 staff. Catch22 hires 955 staff according to the Charity Commission's website.
The trustees of Catch22 will have a "step-in right" giving them ultimate decision-making responsibility at Only Connect, and Only Connect's assets will appear on the Catch22 balance sheet.
All frontline services and programmes that Only Connect operate will remain unchanged.
Kruger has also taken up the role of chief executive of the West London Zone, a collective impact partnership of charities working with children and young people, which was founded by Only Connect in 2014. He will also sit on the trustee board for Catch22.
Matt Ilic, who is currently strategy director of Only Connect, will take over the leadership of Only Connect, and also fill the role of strategy director, justice of Catch22.
The charities say that the move is a “demonstration of a new type of relationship between charities, in which smaller organisations are enabled to keep their identity and autonomy but to operate at scale through the support of larger, established partners”.
The two charities have been collaborating for several years, with close links between Kruger and Catch22’s chief executive Chris Wright. They say that the organisations have a “strong shared heritage, developing ideas and exploring the future of public services together for several years”.
Catch22's most recent set of annual accounts, for the year ending March 2014, show an income of £54.9m. The most recent income for Only Connect was £1.3m.
Wright said: “We both share two parts of a bigger vision. We believe that public services require reimagining if better outcomes are to be experienced by the users of those services. We also believe that charities should deliver true social impact while proving their business credibility. Now is a time of opportunity to be exploring what that transformation will look like.”
“Catch22 has a history of fostering market innovation and new ideas, most recently through the launch of the Catch22 fellowship. Our support of Only Connect will allow it to focus on delivering innovative frontline services and once again underlines our commitment to supporting fresh thinking in the public sector.”
Sector needs more mergers
Kruger said the charity sector needs to “rationalise”, and advocated more mergers and partnerships between charities. He said that the arrangement between Catch22 and Only Connect is an example of an alternative to a merger, where small charities fear that they could lose their identity.
He said: “The traditional charity model is ripe for revolution. Trust in charities is at all an all time low, making a focus on good governance and proven impact more important than ever. There is also a systemic flaw in the operating model of charities with high fixed costs relying on unpredictable levels of voluntary income. This makes it difficult to operate in a business-like and forward thinking way.
“Charities need to get financially stronger and safer - and the charity sector as a whole needs to rationalise. There are 1,300 charities working in British prisons and thousands more supporting ex-offenders and youth at risk. We need to see more mergers, acquisitions and partnerships.”