Why an increasing number of charities are deciding to merge

When two charities inspired by Johann Heinrich Pestalozzi — Pestalozzi World Children’s Trust and Pestalozzi International Foundation — decided to merge last September, some in the sector saw it as a last resort. But the leaders behind the new Pestalozzi International argued it’s time to rethink that mindset. “Charity mergers are often associated with failing organizations, a way of avoiding closure,” James Haughton, who heads Pestalozzi International, told Devex. “I think the sector should lift its gaze and take a different attitude, because what should really drive how we make decisions is how we can have the most impact, right?” Only nine months on, Pestalozzi International, which offers “person-centred education” in Zambia, India, and Nepal, has formally concluded the merger. But Haughton said it’s put them in a better position to deal with the current climate, which he didn’t foresee when they began the discussions. “I think what's happened with USAID and the withdrawal of British international development spending it’s heaped the pressure on organizations like us, and at the same time, the better funders out there are interested and motivated by joint applications,” he said. With rising costs, shrinking donor pools, and increasing demands for local leadership and efficiency, more charities are exploring mergers as a path to survival — and in some cases, growth. But as case studies show, success depends not just on structure, but on culture, values, and power-sharing. Ailbhe Treacy, who works in fundraising and impact for U.K.-based nonprofit 80,000 Hours, said that charity mergers were an underresearched area of development. But she uncovered several success stories involving mergers and acquisitions, which she said could take many forms and didn’t just include one organization being acquired by another. Treacy’s research, conducted using a database of 898 U.K. development NGOs, found that four NGOs merging led to improved delivery and quality of services and made them more attractive to donors. One example that Treacy analyzed was Street Child Africa, which merged with Chance for Childhood in 2016, after Street Child Africa’s income fell due to the 2008 global financial recession. After the pair united, Chance for Childhood reported lower overheads and increased charitable spending. In late 2023, it was announced that Hope for Children will merge with Chance for Childhood. They now operate as one charity, under the Chance for Childhood name and branding. In its 2024 annual report, Chance for Childhood said that it had exceeded its targeted impact, reaching over 60,000 children in 2023-2024 with early years education. Speaking about the merger with Hope for Children, Chance for Childhood trustee Helen McMillan told Devex that it was becoming harder to justify the central admin and support costs in terms of the proportion of total income, after fundraising challenges brought about by COVID-19. The U.K.’s charity regulator, the Charity Commission, had been actively encouraging mergers, she said. “It was key that the charitable objects were closely aligned, and there were huge synergies between the two organisations’ programmes and teams, making the new merged organisation a powerful union,” she said. “This means an expanded ability to reach and advocate for the education, safety and futures of even more children.” Some of the trustees at Pestalozzi likely needed more convincing about their merger “because organizations can be quite territorial and quite precious,” said Eddie West-Burnham, the chief operating officer of Pestalozzi International. But once dialogue started, they were fully onboard. “It was very clear, very quickly that this wasn't just an administrative decision, but about what we can do to be more efficient,” he told Devex. West-Burnham had previously been the CEO of West Norfolk Mind, a mental health charity, and led it through a merger with two other charities. Because of his experience, he knew that someone would have to make a personal compromise, with two CEOs needing to fit within an organization. Although they were open to sharing the role, the Pestalozzi board preferred just one, so West-Burnham stood aside. The same happened with the board chairs. “Sometimes there’s this feeling of ‘I can't lose my little fiefdom, my little empire,’ especially if the CEO or chair set up the organization,” said West-Burnham. “But the effectiveness, efficiency, and delivering a quality service has to be the priority, not the ego and the status of the chief executive.” The pair said that their merger had been a steep learning curve, and that there was not as much guidance available for charities undertaking such a process as there should be. But Haughton added that within their strategic review, Pestalozzi International considered mergers “a matter of normal business now.” “We’re always looking out for opportunities and synergies to come together with organizations,” he said. “I wish organizations would consider it as a normal part of asking themselves what impact they're having and what more they could do.” The Meningitis Research Foundation, or MRF, already worked closely with its member network, the Confederation of Meningitis Organisations, or CoMO, when the pair merged in 2021. MRF’s chief executive had served as the CoMO chair, and they shared an office. But the duo felt that the move was needed after the global road map to defeat meningitis by 2030 was approved by the World Health Assembly in 2020. “It really became apparent just how aligned both organizations’ goals were, and really that we'd have a stronger voice,” Elaine Devine, the director of communications and engagement at MRF, told Devex. She added that from 2016 onward, it became increasingly challenging for CoMO to find funding to operate as a member network. Joining forces ignited enormous growth and CoMO went from leading activities for World Meningitis Day in just over 40 countries across the world to 135, taking action in every global region, and reaching 1.7 billion people with what they said was lifesaving information by 2024. Their membership is growing every month, said Devine. “By being one organization, we can work with members to identify and understand the challenges that they are facing, and the common threads among members in all regions of the world, such as the current climate of aid cuts,” Devine said. She added that they were currently working with CoMO members to understand the impact of the aid cuts in their communities. Challenges One of the things that Devine had learnt was that when charities merge, the process is “a marathon, not a sprint.” “It's not quick to bring together two organizations from the point the organizations agree to come together — it means you need to examine the work you are doing and how you are doing it, to ensure an effective focus and delivery going forward and to avoid any duplication,” she said. In West-Burnham’s experience, the two biggest challenges for charities when merging are culture clash and misalignment. “I have seen conflict arise when organizations — usually driven by single-minded CEOs — have different leadership styles, decision-making processes, and workplace norms — potentially creating friction, slowing down the collaboration process, and having a negative effect on morale,” he said. Misalignment could occur when organizations have differing priorities, donor expectations, or beneficiary needs. Other problems included loss of identity, especially when a larger organization was merging with a smaller one, and financial implications, including restructuring costs, such as potential redundancies, possible funding changes, and concerns about other hidden costs. Consolata Achieng Norbert, founder and executive director of the Mango Tree Orphan Support Trust Kenya, said it was crucial that mergers were rooted in trust, shared values, and a genuine commitment to equitable partnerships. Last year, it was announced that Mango Tree Orphan Support Trust Kenya, which launched in 2006 as a response to the AIDS crisis in the East African country, will merge with Kids Club Kampala, or KCK, formed in 2009 to help people across multiple slum communities in Uganda. The decision has led to Mango Tree closing its U.K. office. Kids Club Kampala will now continue the charity’s programs for children in Homabay County, western Kenya. The collaboration will be staged over three years, with KCK supporting Mango Tree’s partners in Kenya, Tanzania, and Uganda, to help them fulfil their promise to provide free education to vulnerable children. “For us, meaningful collaboration means investing time in building mutual understanding, co-designing strategy, and allowing local expertise to lead,” Norbert told Devex. “Localization and decolonization aren’t boxes to tick — they’re long-term commitments to dismantling power imbalances and ensuring that communities have agency over their own development.” She said that she was worried that some mergers were being fueled by “survival instincts” or pressure to reduce overheads, “without deeper strategic or ethical reflection,” and was just a “cost-saving exercise.” “We hope to co-learn, scale good practices, and jointly influence the global development space in a way that truly centers African leadership,” she said. Norbert added that funders were increasingly recognizing the value of locally led approaches. “We believe this collaboration strengthens our ability to access such funding, not just because we appear bigger or more efficient, but because we are more credible together,” she said.