Record low charity merger activity for second year running, report finds

The number of mergers taking place between charities has reached a record low level for the second year running, latest figures have revealed.

During 2022/23 just 48 mergers took place, involving 98 charities. This is down on the 51, involving 103 charities, that took place the pervious year. It is also 37% down on figures for 2020/21, and the lowest recorded level since figures were first compiled a decade ago.

The continuing fall in the number of mergers comes despite "charities struggling with increasing demands and costs”, according to charity sector consultancy Eastside People, which compiles the figures annually.

It has also been recorded as the consultancy reveals it has seen a 70% rise in the number of enquires from charity leaders looking for advice on merger and partnership projects.

Among mergers that took place last year there was a “significant fall” in those involved larger organisations amid a “slight rise” in mergers involving small charities.

The total income of charities involved was £483m, up £17m on the previous year.

The 20 largest involved charities with a combined income of £30.9. This is “significantly lower” than 2021/22’s figure of £77.1m.

Eastside People said that mergers can be an effective way to improve service provision and support on offer.

“We actively recommend that charities consider merger as a strategic, rather than reactive
option and believe that there will be an increase in merger and partnership discussions and implementations in 2023/24, as more charities consider the benefits of collaboration and are able to find a way forward by working together,” said the consultancy’s head of partnerships and mergers Cara Evans.

Recent mergers that have been announced, and set to be included in next year’s figures, include care charity Hestia’s link up with London based mental health support charity Twining Enterprise. This was announced earlier this month.

The charities said the move has been made to “increase capacity and enhance the support they provide for people with mental health needs in times of crisis”.

Another has been the merger of Humankind Charity, which supports people with complex needs including substance abuse issues, with mental healthcare provider Richmond Fellowship. This was announced in December last year.

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