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Merger Said to be Better Than Closure

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Merger Said to be Better Than Closure

Participants of the CCRDA Leadership Forum meeting in Adama

Participants of the Leadership Forum meeting held in Adama, on August 3 and 4, 2017 concluded that merging with another NGO is a better option than closing an organization.

During the meeting, it was disclosed that over 600 CSOs were closed in the past few years and most have not considered merging with similar other CSOs when they decided to be closed. Ethiopian Catholic Church-Social Development Coordination Office (ECC-SDCO) and Research Inspired Policy and Practicing in Ethiopia (RIPPLE) shared their merger experience on the occasion.

Representing the two organizations, Bekele Moges, Director of the ECC-SDCO, had a presentation on the various important issues needed for merging. Speaking about the legal framework, he said the two organizations merged based on the Ethiopian NGO Proclamation No. 621/2009, Article 106, which says “Two or more Charities or Societies may merge into one under a new name or under the name of one of the former Charity or Society.”

Bekele Moges, Director of Ethiopian Catholic Church-Social Development Coordination Office

Concerning the requirement for merging, he underlined the need for active registration or renewal of registration, the decision of the two organizations to merge, submission of the merging request and updated documents to Charities License Registration and Renewal  Directorate, decision of both Board of Management on the new naming of the merged charity and society and the inclusion of merging and dissolvent article in the statute among others.

As procedures for merging, Bekele Moges, stressed the need for clearing all debts, liabilities and pending issues of both merging CSOs or agree the effects of dissolution, and if there is no claimant on the merging after a newspaper announcement by ChSA, the agency writes approval letter to concerned bodies and previous registration will be returned, and bank accounts will be closed.

Handing over of merged documentation and properties, re-employment of staff, changing of property ownership and property deeds and change address of website, email and postal services are what will be done during the implementation of the merger, Bekele explained. Only three staff members of RIPPLE were employed by ECC-SDCO after the merger, Bekele said.

According to Bekele, new knowledge, skills and experience of human resources, additional assets and properties, complementing of ideas, resources, projects and partners and good reputations are some of the opportunities of merging.

As challenges of merging he mentioned the difficulty of finding a partner to merge with that has similar shared values, vision and mission. He said he was the board member of RIPPLE and he was closely observing when the organization was struggling to survive it was much simpler to merge it with ECC-SDCO. He said the merging process took time and required additional resource, which is also a challenge for CSOs to merge. And he said it is also a problem if the two CSOs are not transparent enough regarding their liabilities. He further said that there could also be difficulty to fit some staff to the new organization by creating new vacant position. According to Bekele, the resource needed to cover liabilities of merged organization is also another challenge.

The participants concluded that the fact that the two organizations had had strong relationships before the merger helped them a lot to remove the hurdles to effect the merger. But they appreciated the two organizations’ for sharing their experience. They also underlined that it is better for CSOs on the verge of closure to merge than to close so that they could continue making contributions for the development of the country.

Last Updated on Wednesday, 06 September 2017 14:11