Charities Sector Statement

Naturally, we are all concerned at recent disclosures regarding charitable organisations – with one in particular capturing headlines and undermining confidence in a serious way. I know that all of us here share a concern about the impact that these revelations have on charities across the country, where we have seen that in the run up to Christmas and thereafter, donations have been markedly down on last year, even though these charities have not had anything to do with the disclosures whatsoever. What needs to happen now is for an increased level of transparency and accountability to come about in the charity sector. The Charities Act of 2009 provides for a system of regulation for charities in Ireland and at the heart of this is the creation and support of strong trust and confidence in our charities. This is needed now more than ever.

The phased introduction of the Charities Act is now necessary, however I believe we need to consider the additional step of the establishment of a “Charity Quality Assurance” mark above and beyond this, which would operate as a guarantee that a charity adheres to a high standard of transparency and accountability while spending a low amount on administration fees, say for instance, less than 20% on administration fees. I believe that such a simple mark would encourage those who don’t have time to thoroughly research their charities to give with the guaranteed assurance that they adhere to the principles of transparency and accountability that is necessary today and being able to gather this information at a glance. Think “guaranteed Irish logo” for the charity sector. One glance, and a person can be assured. This, naturally, would have to include the full disclosure of salaries for senior staff. The idea that the CEO of a charitable organisation can get away with not disclosing their salary while calling for others to do so is, to my mind, the height of hypocrisy and is exactly the kind of thing which undermines confidence and faith which Irish people place in charities when donating.

The Charities Act provides for a new regulator to be established for the charity sector. The Charities Regulatory Authority is to be an independent State Agency charged with the registration and regulation of all charities operating here. The creation of this body is essential to the full roll out of the Charities Act and I am glad to see that this is now going ahead. While I understand that the establishment of the regulator as envisaged in 2009 had to be curtailed due to economic necessity, I did call for some form of regulator – to be established in 2011 – and I wish that this had prevailed at the time.

The Charities Act is an important piece of legislation. For the first time, charitable purpose is defined in law, comprehensive statutory registration of charities is provided for, and the legal basis is established for a significant increase in the information about charities and their affairs to be made available to the public. For reasons of cost, it was no longer possible to implement the Act as originally envisaged, yet we have at no time proposed the repeal of this legislation, such is its importance. Such a move would not represent an advance in the regulation of the charities sector.

Instead, the Minister has put great effort into the best way to bring key measures of the Act into force in a way that does not involve unsustainable expenditure on the part of the State, and yet is capable of delivering a demonstrable improvement in the regulation of the sector. In this sense, I believe that this solution is a very workable, practical one.

The establishment of a Charities Regulatory Authority and development and publication of a Register of Charities as provided for under the Act are both vital steps in securing the future of charities, but all parties agree that it needs to be done in a cost-effective way. In order to minimise the cost to the taxpayer, the proposal to initially establish the Authority on a small scale, to be staffed by officials from within Minister Shatter’s Department.

In order to enable the development of the services provided by the Authority, charities will be required to meet some of the costs of its operation through payment of a modest and proportionate annual fee. I believe this is an important step and there must be a keen emphasis on the proportionate aspect. This is provided for in the Charities Act. In this way, the regulation of charities will become largely self-financing in due course. It is only through utilising this provision that we are able to establish these new structures at this time of constraint in Government spending.

The proposal to levy annual fees on charities was contained in the consultation documents published this time last year and I understand that charities had the opportunity to give their views on and propose alternatives to a suggested fee structure. I believe that we need to find a ratio which works for the maximum number of individual charities; this might be based on a combination of size, or perhaps revenue earned per staff member. Either way, we need to find a fair solution that suits as many as possible. I understand that registration fees will not be payable by charities before 2015 at the earliest, but that is still a relatively near date.

The Government are very aware of the urgency of making progress on this and I am glad to see that the Minister is moving quickly with the administrative staff positions filled by the end of February as well as an interim CEO to be appointed by this time. One wonders where there is institutional knowledge and value to be learned from the previous body Inkex, the Irish Nonprofit Knowledge Exchange, which operated from 2007 to 2012 and attempted to bring accountability, transparency and openness to the Irish charity sector. There would seem to be an existing body of knowledge there which might be helpful to the establishment of a Regulator.

Where funds intended for charity are not being used as intended, or indeed where they are being used inefficiently, such that an unacceptable proportion of the funds is spent on overheads, that should concern all of us, not least the charities themselves, who must strive to benefit their given charitable purpose to the maximum extent possible. No-one disputes that those who are employed by charities must be remunerated at an appropriate level for the work they do. But the charity sector is not well served by a lack of transparency over senior executive salaries, nor by excessive levels of remuneration, where such may exist.

In recent weeks we have heard a series of disturbing allegations about the use of charitable donations by different organisations. The details of these have been the subject of considerable examination in both this House and the media, and have caused concern among the public, which makes our work all the more urgent.

I believe it is vital that that trust and confidence in our charity sector is restored. Future donations depend on it, and therefore the future of the sector depends on it. Ireland, historically, is one of the most charitable nations in the world. I would hate for that to change as a consequence of recent revelations. The new system of charities regulation that is provided for in the Charities Act will be an important part, I hope, of remedying this.

© Catherine Noone – Dublin Senator 2011. | Wordpress Webdesign by: exSite