The charities and not-for-profits landscape in Australia has been under constant change, reform, and rising cost pressures. Meanwhile, these critical organisations are faced with the challenge of maximising their impact while often managing limited financial and human resources.

Mergers, amalgamations, and strategic collaborations may provide a compelling solution to address these challenges through strategic initiatives towards pursuing and realising their impact and reach.

Rationale

There are a variety of strategic reasons why organisations might pursue this course, including (for example):

1. Operational Efficiency and Financial Sustainability: Combining resources, knowledge, and capabilities through mergers and amalgamations allows organisations to reduce administrative overheads, share costs, and operate more efficiently — leading to increased sustainability and long-term impact.

2. Expanded Reach and Impact: Organisations can broaden their geographic footprint, access to new donors and markets, and provide more comprehensive services. This may result in a larger and more significant impact.

3. Risk Mitigation: Collaborative pursuits or multi-entity structures can help spread and mitigate risks, which may reduce the impact of external challenges. This can result in a more resilient organisation.

4. Increased Innovation: Cross-sector collaboration can foster innovation and the exchange of best practices, driving continuous improvement and creativity within the sector.

Path to Success

1. Assessment and Planning: Although there is no ‘one-size-fits-all’ approach to mergers and amalgamations in the not-for-profit and charities sector, each party must conduct thorough due diligence to identify suitable partners, aligned values and purposes, and to establish clear governance and operational objectives and outcomes.

2. Legal and Regulatory Compliance: Compliance with Australian laws and regulations is crucial — and rectifying non-compliance typically attracts significant and unnecessary costs. Organisations should seek professional legal advice to ensure all legal aspects are covered.

3. Operational Integration: Effective integration of systems, processes, culture, and human resources is essential for the success of any formal amalgamation transaction. Developing a comprehensive plan is essential.

4. Communication and Stakeholder Engagement: Transparent communication with key stakeholders, including staff, service recipients, donors (if applicable), core funding bodies, and the wider community is key to maintaining a high-level of trust and support throughout the process.

Our Expertise

Lawyers at Hundt Law have been advising charities and not-for-profits on mergers, amalgamations, and collaborations for over a decade. We offer leading corporate governance, regulatory compliance, and legal due diligence advice. We are able to draft or review practical and plain-English transaction agreements to facilitate and guide the process. We are also able to advise on and facilitate property transactions to be transferred pursuant to the merger.

Our team brings a deep understanding of the sector's unique challenges and opportunities, which helps inform our advice to ensure it is practical, pragmatic, and commercial.

Contact

If your organisation is considering a merger, amalgamation, or collaboration, please get in touch at contact@hundtlaw.com.au

Disclaimer: The information above is of a general nature, must not be relied on, and is not a substitute for obtaining formal legal advice that is specific to your circumstances.