Charity partnerships: 5 top tips for success

Louise Beales, Head of the Charities Practice at Odgers Interim, discusses how charities can complete a successful partnership

The third sector is integral to the lives of those most in need in our society. It is a sector full of passion, dedication and individuals committed to causes they believe greater themselves. But it is also a heavily congested space for organisations to work in. Multiple charities fighting the same battle will inevitably compete for the same pot of money, unnecessarily duplicate resources, limit their potential for growth and ultimately dilute the cause’s message.

It is a problem that can be solved through the formation of partnerships. For many chief executives however, this is the sort of joint venture that is incredibly difficult to make work, involves extensive change and poses no small amount of risk. Nonetheless, getting it right means delivering far greater value to stakeholders, a significant decrease in costs and creates a more compelling message for the cause. This is how you can bring two charities together and create a successful partnership:

1. Start from a position of strength

Historically, charities have turned to partnerships when they are facing financial or even organisational difficulties. As a last ditch effort at keeping the charity alive, partnerships formed in these conditions are often rushed, leading to a loss of talented employees and create cultural imbalances. What’s more, one charity is likely to take on the problems of the other instead of creating a single, stronger organisation.

Timing is therefore critical and partnerships should be formed when both charities are in a position of strength. This allows for effective financial planning and means both parties can prepare themselves for cultural and resourcing changes. It also means that the new brand can go through the natural process of evolution, rather than being forced onto stakeholders.

2. Get your Board on board

Getting both your own and the potential partner charity’s Board to commit to the joint venture is the first and most difficult practical step in achieving a successful partnership.

They must truly understand the benefits of merging the two charities and support the decision entirely. The only way this can be done is through effective communication and indisputable evidence of what can be achieved in the long-term.

After all, it is entirely probable that half of each charity’s Board members will have to step down. To convince them to do so, they must be able to understand and support the benefits of that sacrifice.

3. Communicate internally

For a partnership to be successful, you need the support of the charity’s employees. This is only achieved through effectively communicating the reasoning behind the proposed partnership, the vision of the bigger picture and the positive change that will come about as a result.

If the rumour of a potential merger is left to fester, this inevitably leads to mass redundancies as employees grow concerned about their future career security. To mitigate this, all communication needs to be led with the message that ‘we want you all to stay.’ Some attrition of the workforce will still happen as the two organisations merge but this will be a natural process over time, rather than a mass exodus.

4. Make behind the scenes changes before external changes

A charity’s brand is the cornerstone of its capabilities, whether that is fundraising, campaigning or attracting volunteers. It is a carefully nurtured commodity that is both the charity’s legacy and the force that attracts the many legions of supporters. This is the last thing that you want to change in the formation of a partnership.

Instead, begin with the ‘nuts and bolts’ of the charity. This includes all resourcing changes of teams and functions, the potential site move and any back office and IT changes. Creating a shared service centre model for both charities to begin pooling resources is often the best place to start.

The most successful partnerships are not always an even split of resources; one charity may have more efficient back office services whilst another might be more focused on delivering front-line services. This is something that needs to be to be incorporated into any planned partnership.

5. Prepare to hand over the reins

Lastly and most importantly, you must be prepared to potentially handover aspects of your role as the leader of the charity and even do yourself out of a job entirely.

A partnership should always be for the greater good of the cause both charities are working towards. It is a leap of faith that needs to come above personal career aspirations and therefore may require a level of self-sacrifice from those leading it.

There will always be a level of hesitancy when it comes to these ventures. For a leader, it can be hard to find the time and there’s almost always something that takes priority and gets in the way. However, in overcoming and pushing through these barriers, you will provide a better future for the people that your cause supports.

For more information, please contact Louise Beales.

Comments

Michael Ware at 30/06/2019 09:54 said:

Louise,

So true an point 1 was bourne out by Rugby House / ARP merger.

Ray Smedy at 03/07/2019 18:57 said:

Louise,

A lot of good commonsense points that are often ignored in the process. The key is identifying the need to change and wanting to find the right organisation to work with, either as a less formal partnership or as a formal merger. Your point on brand destruction is valid.

Regards
Ray

Maggie Gardner at 03/07/2019 19:10 said:

Great article. Recently I’ve heard more charities talking of mergers and acquisition as a strategy for growth and new market entry. We have to be driven by our mission and values - which for most of us shouldn’t exclude more commercial thinking if it delivers better for our users/beneficiaries. We as a sector need to be open to change.

Louise Emerson at 03/07/2019 20:12 said:

Helpful tips. It's increasingly important that senior managers/CEOs know when to consider partnership, be aware of culture and be clear on what they want to achieve all the way through. Partnership always goes deeper than one thinks.

Anna Mimms at 03/07/2019 21:01 said:

Absolutely agree. Partnership working has always been a strength in the 3rd sector however when it comes to the crunch not for profits compete for funds. Unless partnerships are genuine vehicles for shared infrastructure and core costs the funding squeeze will take its toll.

Eric Grounds at 04/07/2019 09:43 said:

The analysis is spot on. The greatest difficulties are (a) cultural, (b) personal power and (c) resistance to change of any sort. I remember the then Chairman of SmithKlineBeecham telling me about the failed first attempt to merge with Glaxo: neither Board would bend and their cultures were almost diametrically opposed. It also did not help that the proposal would lead to several directors losing multi-million pound rewards.

Caren Thomas at 04/07/2019 09:45 said:

Interesting insight Louise, the failure rate of jv's is high and exacerbated by leaving it too late (on occasions) as you observe. Its time that more charities reviewed the strategic advantage of jv's annually to route out duplication, maximise economies of scale etc and ultimately, deliver greater value for the sector as a whole and its stakeholders.

Marek Pruszewicz at 04/07/2019 11:08 said:

Really interesting, thanks Louise. Seems to me the main challenges are actually internal; convincing staff and board, who are all sure that your brand and values are different, that you align with another.

Adrian Penrose at 04/07/2019 12:53 said:

Some excellent pointers here. I think partnerships based on a duality of interests are increasingly common. As you suggest, true mergers are dependent on due diligence, especially pension liabilities, proper scrutiny of existing service contracts etc. My own experience of membership charities is that history and culture - including of the memberships - play a major role too.

Hilary Cross at 04/07/2019 13:05 said:

A really interesting piece. Although I was involved in the merger between Cancerbackup (an excellent cancer information charity) and Macmillan Cancer Support, not all partnerships are mergers. Long tern corporate partnerships are so vital for charities too. I was proud to be involved in running the Boots and Macmillan corporate partnership which recognised the enormous value both organisations brought, even if the financial commitment was largely from Boots. Staff of both organisations were really behind it as they recognised it wasn't only about fundraising (which was significant and welcome) but also about delivering Macmillan support to people with cancer on the high street at Boots.

Stuart Rogers at 05/07/2019 07:26 said:

Well put Louise. So much hinges on the will of senior execs and trustees to partner or merge for the right reasons. It is about delivering the charitable objects, not preserving status, jobs or brand. Cultural fit is so important, which requires a lot of hard work.

Mark Irving at 05/07/2019 10:54 said:

Many charities think their essential story is communicated well enough. However, in the heritage and collections sectors, I've noticed how few such charities turn their their Mission and Vision into compelling stories that connect people, place and purpose in ways that are intuitively and succinctly expressed. Taking stock of how well they tell their stories - especially to the not-yet-converted - is a valuable step towards greater organisational self-knowledge and motivation, enhanced partnership building and convincing cases for sustained support. A good way to explore the right route to the most effective storytelling is to convert 'communications' into a framework of 'experience', where messages and activities are seen within a context where tangible and intangible outcomes are seen to be having transformative effects. From a wider sector positioning perspective, taking stock of the charity's story is also a way of objectively assessing the proximity or differentiating factors between one charity and others.

Gordon Craig at 05/07/2019 11:49 said:

Good points. I was heartened when one of my Chief Executives put the possibility of a merger on the table if the Charity could not move away from something another Charity was already doing very well. It was all about putting the beneficiaries first.

Leesa Harwood at 07/07/2019 11:25 said:

Food for thought Louise, I really enjoyed reading this article. There's another option as well as the traditional merger model. Causes (rather than charities) are increasingly providing a rallying call around which people and organisations are gathering. When the individuals and organisations have added as much value as they can they move on to the next cause and collaboration. This is a very dynamic way of operating and an antidote to the intransigent nature of big, permanent, institutional structures. Rhodri Davies (CAF, Giving Thought) has written a great paper on Distributed Autonomous Organisations and how they operate in this way. It's a more agile way of collaborating without formally merging and plays to the growth in causes (#s) underpinned by digital platforms.

Ros Czarnowska at 08/07/2019 09:10 said:

A very important issue explained succinctly! Partnerships are too often seen as a last resort, but should be discussed regularly as a matter of course, and all involved with a charity should be encouraged to help identify opportunities for working with other organisations to deliver a better service for their beneficiaries. It is a question of having a culture that is looking outwards and has a growth mindset, then building trust. Getting it right is so important, because getting it wrong affects so many people!

Peter Ryan at 08/07/2019 10:32 said:

A well thought through article. Understanding both businesses and the people that drive them in depth is crucial for a successful merger. Like in any relationship wishful thinking has its place but can destroy clear thinking if rigorous due diligence is not carried out. And yes at the end of the day its the beneficiaries and the long term that count so ego has to be placed on hold.
Peter Ryan - Founder of MicroLoan Foundation

James Thompson at 08/07/2019 11:54 said:

A thoughful and practical piece about an issue which is sometimes used as a rhetorical stick to beat charities but is thankfully becoming more acceptable to discuss in polite company.

I think the point about allowing time for a natural evolution of ideas and possible changes is so important. As Louise says, too often partnership or merger is considered as a last resort when arguably it should be regularly considered by trustees as part of their risk analysis process.

At the other end of the spectrum, and supporting Louise'a advice, I read of one successful merger where a 'shadow' board was formed from trustees of both organisations some eighteen months before the decision to merge was finally taken. These were local organisations with similar purposes which had previously run joint projects but trustees had never been involved. The idea of a merger was driven by the two CEO's jointly. Over time the two boards were able to build up trust, come to understand each others' priorities and approach, consult with service users, beneficiaries and key funders, and then plan for an effective coming together of the two organisations.

I'm sure it still wasn't easy with many unforseen events post-merger, but then there's always skilled interims on hand to help if people know where to look!

Gill Edelman at 08/07/2019 12:23 said:

I enjoyed both the article and the feedback from colleagues. It is worth noting that the revised Charity Code of Governance encourages trustees to "consider the benefits and risks of partnership working, merger or dissolution if other organisations are fulfilling similar charitable purposes more effectively and/or if the charity’s viability is uncertain." This statement could be even stronger if it encouraged trustees to think about collaboration from a position of strength .....but at least it's in the Code as a standard for auditing against good practice.

Nick Caplin at 10/07/2019 09:59 said:

This is really useful Louise, and timely for the 3rd sector too. In addition to being more efficient in a world of reducing resources, partnerships that stop short of mergers can be really powerful, not least to commercial and philanthropic entities that welcome evidence of the 3rd sector working together. A great example of this is AAAMD (Action against Age-Related Macular Degeneration) that is a partnership between 4 charities who have formed a CIO focused on making AMD a thing of the past. Hugely challenging, hugely exciting and having genuine impact through meaningful partnership working.

Cath Gilliver at 17/07/2019 08:25 said:

Thought provoking article and agree with the responses, - would just want to emphasise the importance of leaders being visible in explaining the rationale and benefits of a merger to the charity's volunteers, funders and other external stakeholders; plus don't underestimate the time it takes for a new shared culture to develop. Also Third Sector Consortia can be a way of forming close partnerships without going as far as a formal merger.

Mike Thiedke at 06/08/2019 12:22 said:

Thanks for sharing, Louise. Good to be reminded of the key points that are so often lost in the process. |Helpful food for thought for Depaul UK's upcoming strategy development.