legal structures for collaborations and mergers david saunders david kelly ncvs
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Legal structures for collaborations and mergers
David SaundersDavid Kelly
NCVS
Association Consortia
Collaboration
MergerAlliance
Why collaborate?
Funders
Less money available
Combat bigger threats
Convenience for commissioners
• Combines the benefits of large and small scale
• Rationalised area-wide structure, dovetailing independent service delivery responsive to local or specific client group needs
How do you do it?
• Look before you leap
• Find potential partners
• Communicate throughout
• Does it fit with trustees/vision/values/priorities?
• Take advice
• Agreement
Models
Separate organisations keep their independence but work jointly on some activities or functions
Organisations with resources/expertise offer assistance to others
New organisation is formed to do joint work on some activities (track record)
Group structure with lead organisation
Merger to form a new organisation, working as one on all activities
Type of activities
• Can be used to carry out charitable activities, service delivery, campaigning or policy work
• Share premises or functions
• Improve strategic efficiency
What is a bidding consortium?
A group of organisations who come together to win contracts
Speculative
Responsive
Longer term collaboration, set up in advance with a wide membership and wide areas of activity
Shorter term collaboration, set up in response to a particular opportunity with only relevant partners
Lead Provider
Subcontractor 1
Subcontractor 2
Subcontractor 3
Delivery of contract and
services
Lead Provider
Prime/ Managing Agent
Subcontractor 1
Subcontractor 2
Subcontractor 3
Delivery of contract and
services
Prime Contractor / Managing Agent
New legal entity
Either delivers contract itself through transferred staff/resources or subcontracts to member organisations
Organisation 1 Organisation 2 Organisation 3
Special Purpose Vehicle
New EntityOperates as hub or long term standing
consortium
member
member member member
member member
Standing Consortium
s.c. s.c.
Merger
Merger is where two or more organisations formally combine to form one organisation.
The term merger has no precise legal definition and is used to cover a number of different processes.
Some mergers may also be referred to as takeovers
External drivers
Pressure from funders to reduce duplication
Government encouragement
Competition with similar organisations
Stakeholder opinion
Public perception of an overcrowded voluntary sector
Internal drivers
Desire to provide more or better services
Need to increase efficiency through better use of resources
Preventing duplication of services
Financial difficulties
Raising public profile or boosting income
Loss of key staff or trustees
‘Survival’ &‘ rescue’
Merger leading to a new organisation
New organisation
Organisation A
Organisation B
Organisation C
Merger using an existing organisation’s structure
Organisation
B
Organisation
A
Organisation
A
Things to consider
• Do the outcomes justify the time and resources invested?
• Loss of autonomy
• Cultural mismatch
• Mission drift
• Damage if unsuccessful, which could be fatal
What if it goes wrong?
Any questions ?
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