Mergers can benefit smaller charities

Deregistering may not be a bad thing if a charity has been consolidated, merged or subsumed under another charity, so that its capabilities and capacities to fulfil its social mission are enhanced ("Nearly 100 charities deregistered over 5-year period"; last Saturday).

While mergers and acquisitions are not uncommon in the commercial sector, it is rarely considered in the charity sector.

It is understandable that not every charity will be or needs to be a large organisation. But the reality may be that there are some charities that are too small to be operated effectively and efficiently.

An organisation that is continually struggling to keep itself afloat financially, not being able to keep and develop its talent pool, will not be able to deliver its services optimally to its beneficiaries.

This situation will be beneficial neither to society nor to those who need its services in the long run.

The question each charity board needs to consider is what the best way for the organisation to achieve its social purpose is.

It need not be just pure organic growth; other strategic options - such as partnerships, alliances, joint ventures, mergers or being subsumed into another organisation - need to be deliberated and debated objectively.

These strategies can also allow charities to leverage skills, experience, domain expertise and leaders to shorten the learning curve to excellent service delivery and greater social impact.

Clement Chung Beng Kwong

A version of this article appeared in the print edition of The Straits Times on March 29, 2016, with the headline 'Mergers can benefit smaller charities'. Print Edition | Subscribe