BWB Impact: Restructuring In The Social

Merger and mutualisation can help to maximise mission and sustainability for organisations in the social and public sectors focusing on positive social change.

Changing lives: it's what we're all trying to achieve. Whether in the social sector (as a charity or social enterprise), or in the public sector, the challenge of delivering outcomes - those life changes - and doing it better in times when need is no less but funding is scarce, is considerable. Researching impact and improving delivery are essential, but how can structuring, or rather restructuring, help? How can merger for the social sector, and mutualisation for the public sector, enable organisations to maximise mission and sustainability?

Merger

Merger is a widely used phrase in the social sector. It covers any form of combination of two or more entities' operations, functions, or funds and assets. It therefore embraces the true merger of equals; an acquisition of assets and operations of one by another; and the reverse takeover, where one organisation takes over the other (the subsidiary) while the controlling trustees of the subsidiary become the controlling trustees of the acquirer. To explain how it can enable that maximisation of mission and sustainability, let's look at six Rs - reasons why - and six Cs - challenges to be addressed in getting it to deliver that value.

Reasons

First are the Rs: the reasons why you would merge.

A merger can enable you to gain access to, or exploit your own, intellectual property rights: such as know-how in the service arena, recipes or technical manufacturing methods for nutritional supplements for overseas aid organisations, or customer lists. Reach is next: increasing access to a wider range of beneficiaries. Resource is the third: gaining access to key capital assets such as property, to staff and their expertise, to funds, or to management expertise and leadership (for example to respond to a change in the market, or the retirement of a key individual). Removing blockers or risks, or enabling them to be better managed, may be possible with a merger that brings in expertise, the sourcing of a key supply or resource, or a business which is counter-cyclical to one already held. Reputation in a chosen service user market, or with public sector commissioners, or with key suppliers, donors or other third parties key to delivery and sustainability may also be gained through merger with a strong counterparty. Finally it may simply be the right...