Charity mergers have increased to record levels, mainly due to the consolidation of the independent schools’ sector, according to new research.
Published today, the latest Good Merger Index recorded the highest number of mergers in England and Wales in its 12-year history.
Consultancy Eastside People found that there were 94 mergers involving 183 charities between May 2024 and April 2025, a 49% increase on the previous year and a 96% rise on 2022-23.
According to the research, the increase is mainly due to the consolidation of the independent schools’ sector, with merger activity boosted by VAT changes, cost pressures and declining fee income.
In 2024-25, independent school mergers accounted for 13 of the 20 largest mergers, compared with nine in 2023-24 and just one the year before.
Researchers also found a rise in mergers amongst small charities, with 88 organisations under £1m involved in mergers in 2024-25, compared with 65 the year before and 59 in 2022-23.
Takeovers dominate
The report shows that takeovers – whereby an organisation transfers its assets and activities to become part of another – remain the most common form of merger, with smaller charities seeking a “safe harbour” within stronger organisations.
However, it says that many mergers are strategic rather than reactive, “with boards pursuing growth, digital transformation, improved efficiency and wider impact”.
The index identifies an 111% increase in the total income of organisations involved in mergers, to £2.18bn, with a record £362m of services transferred (an 84% increase year-on-year).
The size of the 20 largest deals rose by 72% compared with 2023-24, representing 88% of the total financial value (lower than the previous year’s 94%).
At £153m, the merger between Humankind and Richmond Fellowship was the highest in terms of income transferred, followed by the merger between Sherborne Schools Group and Sherborne School for Girls (£49.5m) and Girls’ Day School Trust’s takeover of Redmaids’ High School (£11.7m).
In recent years, there has been a steady increase in the number of smaller organisations that were in deficit the year before they merged into a larger organisation, reaching 56% in 2024-25.
The report says this indicates “financial necessity as a clear driver for charities looking to merge into larger organisations”.
Sector ‘under real pressure’
Cara Evans, head of partnerships and mergers at Eastside People, said: “This year’s Good Merger Index shows a sector under real pressure but also one demonstrating extraordinary adaptability.
“The record number of mergers tells a clear story: charities are making tough, strategic decisions to protect services and ensure long-term resilience.
“In a challenging environment – financially, operationally and emotionally – organisations are choosing collaboration as a way to stay mission focused and meet rising community needs.
“What we’re seeing isn’t a failure of the sector, but its strength.”
Most organisations in the index are registered charities and companies limited by guarantee, with multi-academy trusts, universities regulated by the Office for Students and pure housing association mergers generally excluded.
