1. Skylark Charity Support Network Graham Whitney Skylark Charity Support Network Providing pro bono support to small/medium size charities wishing to merge or collaborate Perspective on Mergers in the Charity Sector www.skylarknetwork.org.uk Further information: graham@skylarknetwork.org.uk Notes Skylark been running 15 years Senior Management Consulting Professionals plus 15 Associates Provides: Process method for mergers Challenge Independence Project Management Support for Senior Leadership Why have mergers got such a bad name in the 3 rd Sector? Loss of independence control? Failure? Merger can be an important strategic option

2. Skylark Charity Support Network Mergers….what are the drivers? A positive strategic option Funders Buyers of Services Beneficiaries Other Suppliers/ New Entrants Notes Reducing costs is a catalyst but is insufficient to justify a merger Changing needs of beneficiaries & requirement from funders are real drivers Clear articulation of “Size of the prize” is critical

3. Skylark Charity Support Network Mergers….at the right life stage of development The “S “ Curve Notes After a growth period, charities typically go through a transition Merger can be an option to lift the charity to the next stage of growth Where are you ? Where is your partner? “Two drunks don’t make a good team” 170,000 charities is not wrong but consolidation is needed in fragmented sectors to allow space for start ups to bring new ideas & energy

4. Skylark Charity Support Network Mergers…made by people thinking outside the box Trustees CEO Trustees CEO Beneficiaries Notes Trustees have a responsibility for their beneficiaries not just their charity Scanning externally and identifying possible merger candidates is a new role for Trustees Putting their beneficairies before their own position is the hallmark of a true leader

5. Skylark Charity Support Network The Skylark Merger Framework A four stage approach to mergers within the charity sector Guided by the Business Strategy determine a short- list of target merger candidates. Merger StrategyFeasibility Integration Planning Integration/ Execution Exploring the potential benefits and risks of merging. What opportunity would the merger deliver both parties? Are the charities’ cultures compatible? Detailed Integration planning: How will the charities come together? How will the transition be handled? Formal due diligence. Implement the agreed plan, review and measure associated short and long term benefits. Transition NewCo to be fully up and running as ‘business-as-usual’. Joint agreement to pursue Agreement in principle of ‘How’ they will come together GO/ NO-GO joint decision NewCo fully up and running I II III IV END OF STAGE MILESTONES Stage Mergers….breaking it down into steps Notes How to do a merger is intimidating but can be achieved by using a clear process Using good professional advice Having independent support