Should we have fewer Not-for-Profit Organisations?

(24 Mar 2017)

 

 

                            

The announcement that Goal and Oxfam Ireland intend to merge has again raised the issue of consolidation in the Irish not-for-profit sector. Commentators have regularly offered opinion that we have too many charities but the arguments are based on a perception that the number of not-for-profit organisations seems big or that there is obvious duplication in a particular area.


Back in 2009, as we contemplated the likely impact of the economic crash, in association with the Ireland Funds and the Irish Heart Foundation (supported by Ecclesiastical Insurance) 2into3 published a paper exploring this theme called “Collaboration for Great Impact”.  Its findings are as relevant today.

Benefacts lists 19,386 not-for-Profits and the Charities Regulatory Authority lists 8162 charities (some 20% of which are inactive). The expectation is that both these numbers will grow with not-for-profits exceeding charities as not all public benefit organisations are deemed to have a charitable purpose, with Sport and Recreation in particular excluded from the Charitable sector.  We currently have a Not-for-Profit organisation for every 237 people living in Ireland or a charity for every 563 people. In England and Wales there is a charity for every 351 people so it is not so obvious that are there are simply too many charitable organisations in Ireland.

It is true that in the Health and Social Service sectors there is duplication in particular geographic areas but there is also an absence of scale with an insufficient number of organisations having a national reach. The same argument cannot be applied to most Arts, Sports and Community organisations as their very essence is centred around a specific geographic community. Equally schools serve a particular community and there is a point at which a school is too large or too distant for those it serves. Simplistic arguments do not apply to the not-for-profit sector.

Why then should organisations collaborate or even merge?

Motivating factors are usually to improve finances, build skill sets or to deliver on mission. The challenges are organisational culture and fit, staff turnover, resources needed, leadership, identity and support. Success factors are research and planning, openness and communication, supportive staff teams, strong leaders, measurable outcomes and speed. There is a lot to consider. 

Funders, especially the State in Ireland, can play a very significant role as they seek some of the benefits of collaboration where not-for-profits are delivering services on behalf of the State. This has already been evident in the International Development sector and we can expect it to play out, in particular, in Social Service and Health areas where absence of scale, insufficient skill sets or duplication within geographic areas are most evident.

Contact 2into3 Director, Dennis O'Connor at dennis@2into3.com or on 01 2343184.
 

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