Charities overlap in missions, services, and overhead?

While in the US over the last two weeks, I had an interesting conversation with a man who gives generously to hundreds of charities each year through a family foundation. He raised the issue about the number of charities offering the same missions and services existing in the US and asked whether this is also a “problem” in Australia.

How do all these nonprofit organisation pop up in a community? During the discussion, we talked about organisations established by very passionate people for all the right reasons – a son died of brain cancer, a family member becomes disabled through a life threatening disease, or a group of people want to make a difference and support someone or an issue they care about. Rather than find an existing charity and establish a program within the charity to fill a gap in services in the community, these well-intentioned people create an entirely new charity. A community might see this in the US in health organisations and even amongst cultural organisations, environmental groups, educational institutions and in other verticals in our sector.

hospital-mergerCollaboration and Consolidation? The concern in this type of conversation is not the number of charities, but, rather, the overhead existing amongst each charity. The question is whether charity consolidation amongst charities with overlapping missions and services makes more sense. It was highlighted that in some cities in the US, some centralised charitable foundations have encouraged collaboration, at a minimum, and consolidation at a maximum. The argument is that each charity with overlapping missions and services has boards, senior staffing, office space, office equipment, and other costs. Consolidation of similar organisations strengthens the organisation and saves on such costs.

Coalitions? I have often times wondered why charities do not form coalitions if, for no other reason, than to gain purchasing power. If a coalition of health charities, as an example, was searching for a new customer relationship management (CRM) system, collectively they would gain far more buying power than they would separately. Coalitions of organisations can make change in a far smarter, faster, and efficient way than any part might achieve.

Has your organisation thought about merging with other similar organisations? Are there organisations in the community who may offer a different service where a merger would strengthen your mission and programming? What stops your organisation from merging with others in the community?