A game-changer for Save the Children?

Merlin is now part of Save the Children. Tuesday’s announcement could shake up the international nonprofit landscape and affect thousands of aid workers around the globe.

It’s a merger in anything but name; officials speak of a “partnership.” Merlin’s board of trustees stepped down on the same day.

It’s also a sign of the times: International NGOs are scrambling to reinvent themselves in a competitive, globalized marketplace where foreign aid is increasingly going toward local groups in the developing world. As donors hone in on emergencies, fragile states and emerging economies with huge pockets of poverty, many international NGO leaders see their future in advocacy and capacity building, their selling point in the ability to scale up projects and apply lessons learned halfway around the world.

Last year, ActionAid CEO Richard Miller told Devex in a rather prophetic feature which quoted several other iNGO leaders and is well worth revisiting: “Big iNGOs will grow globally; small ones may do well in emerging markets. The problem is probably for the ‘squeezed middle,’ those middle-sized specialist technical NGOs based in the north, such as the U.K. or U.S., where there are cheaper organizations in India or in country growing up.”

Enter Save the Children and Merlin.

The merger announced this week is meant to “secure the long-term future of Merlin’s life-saving work” and to help Save the Children achieve its 2010-2015 strategy, the latter NGO’s spokesperson told Devex.

It should strengthen the NGOs’ network of health workers around the globe and allow for faster, more cost-effective response in the case of a humanitarian emergency.

A transition team is being formed that will work with Merlin to develop a plan over the coming months that “takes into account the scope, timescales and requirements for each country and for head office,” the spokesperson told Devex. Until that plan is drafted, the NGO “cannot say anything more” on potential staffing changes.

“However, as the two organizations come together, we will be looking for possible efficiencies.”

In plain English: Layoffs will be on the table — not a surprise, of course. When FHI acquired AED in 2011, their leaders promised to retain “substantially all” staff and perhaps even hire some. They did indeed, and yet I’ve come across quite a few disgruntled ex-employees in Washington over the past two years.

In this week’s merger, field operations will, at first, continue to operate separately, followed by a phased transition of Merlin’s program operations to Save the Children International. Save the Children has programs in all of Merlin’s 16 countries of operation apart from Chad and the Central African Republic.

“The priority is to ensure that we are safeguarding the delivery of our work,” the spokesperson said. “For those teams transferring as part of this plan, our expectation is that there will be a phased transition of Merlin’s overseas program operations and head office teams to Save the Children, which we are aiming to complete within 18 months.”

Merlin remains a separate legal entity during the transition phase. At the end of it, the 10-year-old London-based nonprofit, which provides medical care during humanitarian crises, will be an integral part of one of the largest charities in the world. Save the Children turns 94 this year, works in 120 countries, gained £332.9 million pounds in 2011 — compared to Merlin’s £68.9 million pounds — and ranks eigth on the 2012 Social Charity 100 Index, a list of the most social media-savvy NGO published by Visceral Business.

Save the Children does not have any plans for further acquisitions “at the moment,” Devex was told.

That may be the case. But there’ll be more mergers and acquisitions in international development. Keep your ears to the ground, let us know what you’re hearing, and stay tuned to Devex for more coverage on this “partnership” and others.

Read last week’s Development Buzz.

Related content:

• Merlin staff, partner on merger: Not concerned… yet