Is merger mania about to hit the voluntary sector? Help the Aged and Age Concern may have fired the starting pistol with the belated discovery that their aims and actions were overlapping.
Time will tell whether the tie-up with work, but a report from advisory group New Philanthropy Capital, a charity itself, suggests that it is a positive move.
The report from NPC says there are too many good causes competing for a diminishing well of public donations. Oxfam is just one charity hit by the economic downturn, which could result in a £2.3bn shortfall in donations generally this year.
If a huge concern like Oxfam is suffering, where does that leave the smaller charities? Surely it would make sense to offer themselves up for takeover?
The economics stack up: they would benefit from economies of scale and greater marketing opportunities afforded by the big beasts.
But the interventionist nature of charity defies conventional economic thinking. Surely there is a danger that some of their niche causes could be subsumed by the giants and later forgotten.
It is logical for the likes of two moderately sized groups with similar aims to link, hence the likely successful merger between Help the Aged and Age Concern.
But if we end up with a third sector dominated by a smaller number of super-charities, the minnows that remain risk going out of business as the big guns step up marketing and advertising.
The only option left then for the small charities would be to give in to the prevailing trend and perhaps lose both their identities and niche causes.
It is absolutely vital that the minnows do NOT get swallowed up by bigger fish. Many of the smaller, `niche` charities have developed because they provide such specialised services that it is not logical to merge with other, more generic, providers. That`s not to say that there should be territorialism and a refusal to co-operate. We need mechanisms to encourage charities that have something in common to work well together, without losing their ability to provide tailor made services in their own specific field. We could also encourage a federation of small charities, whose interests may be very different but whose positions in the `marketplace`, from a business point of view, may be very similar. Funding arrangements need to support diversity, and perhaps when the current political dust has settled a little, a few key politicians could be persuaded to sit down with some of the smaller charities and discuss how this could work.