https://powerofus.force.com/s/article/NPSP-Merging-Contacts

When a staff member receives an error while attempting to merge duplicate contacts, it is often due

to insufficient permissions. Creating a Permission Set with "Modify All" on Contacts and Accounts

and assigning it to the staff member will grant the necessary permissions to perform merges. This

Permission Set will override the default profile permissions and provide the required access to

manage and merge contacts.

Steps:

Go to Setup > Permission Sets.

Click "New" to create a new Permission Set.

Name the Permission Set appropriately (e.g., "Contact Merge Permissions").

In the Permission Set, navigate to Object Settings.

Select Contacts and Accounts.

Check the "Modify All" checkbox for both objects.

Save the Permission Set.

Assign the Permission Set to the staff member by navigating to the user's profile and adding the

Permission Set.

Reference:

CertGod Nonprofit Cloud Consultant Guide: Discusses the importance of appropriate permissions for

merging records​​.

Salesforce Documentation on Permission Sets: Details the steps for creating and assigning Permission

Sets.