By Claire Racine

A report that suggests charities should consider merging in order to survive the tough economic environment and be more effective, is challenged by one leading charity.

According to the report What place for mergers between charities? by consultancy, New Philanthropy Capital, by bringing together organisations with similar missions, mergers can improve existing services, create new benefits and save money.

“There are too few mergers in the charity sector, in part because it’s a taboo subject,” says report author, John Copps. “The most important question is not what works best for the charity, it’s what works best for all the people that charities intend to help.”

A recent Charity Commission survey shows that while 64% of UK charities with an annual income of over £1m are concerned about the downturn, only 3% said they had considered merging.

“Mergers are frowned on in the charity sector and are often seen as predatory or aggressive, ignoring the fact that a merger can help an organisation not only to survive, but to thrive,” said Martin Brookes, NPC’s chief executive.

An example of a successful merger mentioned in the report occurred in 2001 between the Imperial Cancer Research Fund and the Cancer Research Campaign to create Cancer Research UK, which is now one of the largest UK charities.

The merger was driven by a desire to see progress in the fight against cancer, to benefit from sharing knowledge and to save money.

The report also looked at how several national breast cancer charities are spending money and competing to raise funds for research, education and support.

The NPC thinks this situation has parallels to the agreement that created Cancer Research UK. Breakthrough Breast Cancer spends more than £6m trying to generate funds and Breast Cancer Campaign spends around £4m, according to the report.

Although there are differences between the two, the report claims that the differences are all but invisible to potential donors.

But Pamela Goldberg, Breast Cancer Campaign chief executive, questioned this thinking. “There is absolutely no evidence that a merger will produce significant savings: our individual evaluations indicate there is more potential to maximise fundraising opportunities across income streams such as corporate partnerships, individual donors and events by having two separate charities, rather than one."