Merger talks between Goal and Oxfam collapse without a deal

Scale and diversity of both aid agencies ‘best served by operating as two distinct entities’

Goal finds itself in a better position today than when the merger talks began in February. Photograph: Cyril Byrne

Goal finds itself in a better position today than when the merger talks began in February. Photograph: Cyril Byrne

 

Merger talks between the aid agencies Goal and Oxfam Ireland have ended without a deal.

The two organisations began formal negotiations in February about a potential merger that would have brought them together under the name Oxfam Goal.

However, the two agencies confirmed on Tuesday that the process had ended without an agreement. “It was decided that the scale and diversity of both organisations’ work will be best served by operating as two distinct entities,” Goal and Oxfam said in a joint statement.

It is understood that due diligence and legal discussions about the potential merger had moved smoothly but that the deal foundered on the question of how the two entities’ programmes could be merged.

Reshaped sector

The plan would have reshaped the overseas aid sector in Ireland. Oxfam Ireland belongs to a network of 20 worldwide affiliates that are in the process of coming together under one umbrella. Goal was Ireland’s largest aid outfit until it was thrown into crisis last year by a US government inquiry into alleged collusion and bid-rigging in southern Turkey, from which Goal and other aid agencies run their Syria operations.

Goal works in 13 countries across the world and draws most of its funding from institutional donors such as the US, British and Irish governments and the European Union. It gained a strong reputation for its humanitarian work in the field. Before the US inquiry plunged it into crisis, it had built up huge operations responding to the Syrian war and the Ebola crisis.

Oxfam Ireland’s model puts a greater emphasis on channelling its funds, most of which come from the Government and individual donors, to partner organisations in the field. It also has an active and highly-regarded advocacy function.

At the outset, both sides presented these models as complementary, but as the merger talks proceeded the scale of the task in bringing them together turned out to be too complex. Oxfam Ireland is in the middle of a broader process to unify the 20 global Oxfam agencies under one umbrella by 2020.

Fallout

Goal finds itself in a better position today than when the merger talks began in February. The agency has been reeling from the fallout from the investigation by the US Office of the Inspector General and a decision by USAID, the US government’s foreign aid arm, to order it to partially halt procurement using American money.

The Department of Foreign Affairs reacted to the scandal by withholding more than €10 million in grant money, while a number of senior executives left the charity and 25 staff were let go.

However in recent weeks Irish Aid has approved a contract for €9 million for Goal for 2017 and the agency has been awarded new US funding in Sudan, Ethiopia and Honduras and is in discussions in relation to new funding for Haiti and Syria.

The Dún Laoghaire-based organisation has budgeted for an income of €115 million this year, and just last week the US authorities announced that its procurement suspension for Syria had been lifted. All of this has put Goal on a firmer financial footing, convincing its board that its viability is not in question.

Amicably

In their statement, Goal and Oxfam Ireland said they had decided “not to proceed at this time,” but it is understood that although the talks ended amicably there is no plan to resume discussions. Neither side is currently looking at alternative potential merger partners.

“The organisations’ boards believe that the two organisations will continue to make a strong impact as independent entities in their work serving the world’s poorest and most vulnerable people,” the statement said. “A joint Goal-Oxfam team spent five months exploring the possibility of bringing both organisations together, however due to the complexities of a full merger it was not possible to bring discussions to a successful conclusion at this time.”

Goal general manager Celine Fitzgerald and Oxfam Ireland chief executive Jim Clarken said their agencies planned to work closely together in future, building on the goodwill generated by the recent talks to share knowledge and resources for the good of their beneficiaries.