This document discusses mergers and collaboration between voluntary organizations. It provides an overview of reactive and proactive reasons for mergers, including financial pressures and meeting user needs more effectively. It also outlines different approaches to collaboration on a spectrum from informal partnerships to full mergers. The key steps of a merger process are discussed, including dating/negotiations, decision making, planning/legal work, and implementation. Two case studies are presented that show how mergers can reduce costs but also involve one-time costs and adjustments. Effective communication and keeping existing relationships are emphasized as important for a successful merger.

1. Mergers & Collaboration
Workshop

2. • Overview, approaches and process
• Three case studies
• Q&A
This session

3. Collaboration & Merger Drivers
Reactive Reasons
• a last-resort effort to survive in
response to external pressures
• a strategy for dealing with an
environment of uncertainty and
scarce resources
• a response to pressures arising
from commissioning and
contracting a response to the
influence of funding bodies.
Proactive Reasons
• meet users’ needs more effectively
• have greater influence on the
external environment
• expand the range of services
provided.

4. Collaboration & Merger Drivers
In practice, it is often a combination of factors.
Seven major reasons why voluntary organisations consider merger:
• the vulnerability of smallness
• financial pressures
• governance problems
• influencing the external environment
• meeting users’ needs more effectively
• broadening the organisation’s offer
• having a history of collaboration.
https://www.ivar.org.uk/publication/thinking-about-merger/

5. • Range of approaches
• Range of structures
• Trust and relationships
• Cultural similarities
How to go about it

6. Operational Integration
ResourceIntegration
Merger
Consortium Contract
Programme project funding
Common referral system
Strong partnership working
Co-location
Silo working Weak partnership working
Integrated teams

7. • Reflect local community needs (place &
purpose)
• Democratic mandate (strong accountable
governance)
• Economies of scale do not always
translate to efficiency and effectiveness
(bigger empty pot or bureaucratic
nightmare)
Objections

8. • Technically often not that difficult
• Political
• Cultural
• Understanding of benefit
• Decision making (or lack of)
• Headspace or implementation resources
Barriers

9. • between the joining parties)
Structures to support collaboration
Informal alliance relationships and understandings that may be written but are
non-contractual. An arrangement that is essentially informal,
based on good
Contract-based (can be partnership agreement) A relationship that is underpinned by a contract between the
parties
that sets out the objectives, respective roles, cost-sharing and
charging arrangements.
Joint venture The parties establish a legal entity, which they jointly own and
control,
for the purpose of undertaking specified functions.
Group structure One example of a group structure is when parties agree to
become
controlled by a holding entity, which owns or controls the
parties
(subsidiaries preserve their original identity).
Merger The parties merge on whatever basis is agreed. This either
creates a

10. • Probably lightest weight structure that
– Achieves objectives
– Meets political needs
– Provides security and remedy
What to choose

11. Rough process
Dating Negotiation
Decision
Making
Planning and
Legal
Implementation
Final go aheadHeads of termsIn principle
Drivers
Aspirations
Motivations

12. • Choosing to Collaborate: Helping you succeed
• https://www.gov.uk/government/uploads/system/up
loads/attachment_data/file/409625/Choosing_to_c
ollaborate.pdf
• Collaborative working and mergers and
introduction
• https://www.gov.uk/government/publications/collab
orative-working-and-mergers-an-introduction-
cc34/collaborative-working-and-mergers-an-
introduction
Dating and negotiation

13. • Check list for mergers (20 questions for
trustees)
• https://www.gov.uk/government/uploads/sy
stem/uploads/attachment_data/file/398566
/Checklist_for_mergers.pdf
Decision Making

14. Sets out the key principles of the agreement
and key details
• Letter of intent , Memorandum of
understanding
Heads of Terms

15. • Investigation to understand any risks,
liabilities or issues and to validate the facts
for the decision. Undertaking activities with
‘reasonable care’ – proportionate
• https://www.oneeastmidlands.org.uk/sites/
default/files/library/Due%20Diligence%20
Checklist.pdf
Due Diligence

16. NRCC & WNVCA Experience

17. • Worked together on community development for
years
• Change on contract in October ‘14 meant closer
working on strategy and policy work
• Both under funding pressure but not an immediate
crisis
• Strategic position also key
• Led to ‘RDC’ in December ’14
• Existing relationship critical to honest RDC
Dating and Negotiations

18. • In-principle Dec,
• Heads of terms Jan, March final decision
• Deciding & moving quickly was the right
decision but does have a resource implication
• Emphasis on keeping communication on-
going – use your individual strengths
• Get the CEO bit sorted early
Decision Making

19. • Jan – March 2015
• Due diligence – followed charity commission
template
• Helped underpin similar culture
• Full merger this is a workload (lost our Sunday’s)
• Detail matters - its not about process its important
from day one if the IT will talk to each other!
• Did it ourselves paid auditor to review (on behalf of
RCC)
Planning and Legal

20. • Closed for two days, Live 1st April
• Communication – internal, external – clear consistent
• Did a crib sheet, Did a day one strategy
• Moved then launched
• Things can still go wrong
– ICT
– Name change
• Ended up closing WNVCA December 2016 (loose
ends)
Implimentation

21. 0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Premises & Associated
Overheads
Operating Budgets
Strategic & Managment Staff
Delivery Staff
Support Staff
Norfolk
RCC
WNVCA
What did it do to costs?
• Not that easy to compare as
some functionality changed
(delivered less back-office
support) some reflects
organisations choice (e.g.
outsource finance)
• Saving on expenditure but
also changes in income
• 9% ‘clean’ saving (none
delivery effecting savings)
circa £46K
• Roughly £35K in one-off
costs (although not all
strictly necessary for