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More charity takeovers than mergers

Some 81 mergers involving 154 charities took place in the year to March 2018, according to a new report. Not surprisingly it found that mergers often took place in situations where one of the charities was in financial trouble, and that mergers were often a form of rescue from financial and strategic weakness.

It found that more than two thirds of the 81 mergers (56) were takeovers, in which a smaller charity was absorbed into a larger one. This is a higher proportion than the 56 per cent recorded in the previous index.

Only 17 of the mergers, 21 per cent, were “mergers of equals”, lower than 29 per cent the previous year, signifying the coming together of similar-sized organisations with shared governance structures.

Another six involved one charity becoming a subsidiary of another. One involved an asset swap in which services moved between two charities that preserved their own identities. One involved the formation of a group structure.

Read Eastside Primetimers - The Good Merger Index