The very mention of a merger can strike fear into the heart of even the most experienced trustee. True, it can be a very intensive and complex process, but the benefit a merger brings to the organisations involved, their beneficiaries, and the sector as a whole can be significant.

There’s a mountain of information out there for anybody considering a merger, but scaling it can be daunting in itself. To help shed some light, NPC and the Clothworkers’ Company held a seminar for trustees looking at what you can expect, what you need to know, and the things that make it all worthwhile. Our briefing sums up the proceedings in full—from the legal responsibilities of trustees and the different merger models, to best practice tips from personal accounts.

Here are a few of the key points:

Know why you’re doing it

There will certainly be a financial case here. Will you be able to reach a broader donor base? What savings are you likely to make? Is the process financially viable? But the first question should always be: how will this help our beneficiaries? A merger may enable you to achieve a more streamlined service with the power and profile to bring in funds, or a more comprehensive service that helps to provide multi-faceted support. Taking things back to a shared vision will keep you on course through the tougher times, and provide the motivation to navigate through disputes and disagreements.

Set off on the right foot

Putting in the hours at the beginning can avoid a host of problems further down the line. What are likely to be the sticking points or deal-breakers between you and your merger partner? Who’s going to lead the new organisation? What form will the new organisation take? What will it be called? Getting professional advice at an early stage (whether paid or internal) can’t be recommended highly enough.

Everything in proportion

In an ideal world, your due diligence would be exhaustive—but resource constraints will have to guide your decision here. Smaller charities in particular may struggle to find the necessary time and money to carry out really thorough due diligence. So you should bear in mind your limits when choosing the appropriate model for merger—some are more complex than others. Equally, you need to make a decision about the level of risk you’re willing to bear, and adapt your due diligence accordingly.

Don’t forget the people

It’s easy to become caught up in contracts, accounts and board meetings. But one of the most important things in the process is the people involved. This is true at all levels—the key is being aware of your stakeholders. Staff in particular should be kept updated on the process, as many may be looking at losing their jobs. For senior managers, communication is key—new leadership teams need to gel if the process is to go smoothly.

Get some advice

Mergers are complex and technical, so it’s well worth seeking proper advice on the legal, financial and strategic elements of the process. You should draw on any internal expertise you might have, but even if you have to pay, it’s worthwhile in the long run to get it right, and get it right the first time.

If you’re thinking about becoming a trustee, we’ll be publishing a short paper on the basic responsibilities it involves and the benefits it can bring early next year, when we begin our next set of seminars to continue the trusteeship conversation. Among other topics, we’ll be looking at getting on top of your charity’s finances and understanding its impact.

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