Charities

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1 Debates: Charities Act: senators criticize delays

The Seanad debated, on the first day of its return, a Labour Party motion on the Charities Act, 2007 (Seanad Eireann, Debates, 19th September 2012, 30-50).  According to John Whelan (Lab, labour panel), who moved the motion, it was a false economy and ill-judged not to have established the office of the charity regulator, even though some might have incorrectly characterized it as a new quango.  What they sought was greater accountability and transparency to underpin the important work done by the charity sector, which was worth €6bn a year.  The vast majority of charities worked to the highest standards, but all it took was a bad egg or a few bad apples to give the sector a bad name and undermine public trust.  There was substantial duplication and overlap, he said.  An Act that took a long time to go through should not be left languishing on the shelf to gather dust and if there were people who were unscrupulous, it might help weed them out.

 

Lorraine Higgins (Lab, Taoiseach nominee) spoke of how the Charities Act had been enacted as far back as 28th February 2009.  She praised the work done by organizations such as Dochas and The Wheel who had voluntarily tried to improve the standards of the sector and had spearheaded its governance code.  It was imperative for government to complement their efforts with effective legislation.  Charities accounted for 3.25% of national income, not an inconsiderable amount, although 60% had experienced a decrease in their income over the past three years, while two-thirds had seen their beneficiary numbers increase.  Labrhas O Murchu (FF, cultural & educational) described charitable organizations as ‘the reserve troops in a time of urgency and necessity in combatting the effects of poverty and other issues’.  One could certainly not point a figure at 99% of them, but when one hears something negative, it makes one pause as to the contribution that one makes.  Such cases are few and far between, he said, but were most unfair to the vast majority of charities that did their work in the right spirit and with a sense of professionalism, accountability and responsibility.  

 

Catherine Noone (FG, industrial & commercial) expressed the hope that the charities regulatory authority would be established soon.  She regretted the closure of the data providing body, INKEx.  She raised the issue of chugging, or aggressive street fund-raising, which she said might provide a short-term financial hit but could also provoke brand damage in the long term.  Other jurisdictions were bringing in rules to limit their numbers, or the steps by which they could follow people.

 

Jillant van Turnhout (independent, Taoiseach nominee) spoke of the urgent need to implement the Charities Act.  The delay was not on the part of the charities, but by the government.  She spoke of how, in advance of the Act, charities like hers had taken legal advice, amended their articles of association, examined their governance structures, examined their financial accounting and reporting.  ‘My heart was broken trying to ensure that we fulfilled all the requirements of the Act’, she said.  This was all done at a great cost in time, money and resources, which they had been happy to bear for the better regulation of the sector and in anticipation of the Act.  8,000 charities now spend almost €17m in audit fees and for small organizations this was typically €1,200 a year on a €50,000 revenue, or 7% of their total.  Some of the 7,800 charities in the state did not even receive state funding.  She was concerned about reports of high salaries, commissions and administration costs but it was vital we did not target the entire charity sector with the same brush.  Most staff in charities were on modest salaries and others had staff who were voluntary and received no payment.  Staff in the children’s sector had taken unpaid leave to ensure that frontline services were protected.  Feargal Quinn (independent, National University) spoke of the murkiness of CEO salaries and a report in June that four charities with millions of state funding had refused to reveal how much their chief executives were paid.  

 

Responding for the government, the Minister of State at the Department of Justice and Equality, Kathleen Lynch told the Seanad that five sections of the Act had already been commenced and a sixth partially, under two commencement orders, SI §284/2009 and §315/2010, sections relating to mass cards and the personal liability of trustees.  The key provisions, though, had yet to be commenced.  The establishment of the charities regulatory authority had been deferred for budgetary reasons, but that did not indicate a change in government policy.  It had not been envisaged that there would be such a lengthy delay in the establishment of the charities regulator.  The deferral was not taken lightly.  The minister accepted that this was a source of concern to many in the charities sector and shared their eagerness to see the matter progressed.  The charities sector was engaging with the minister to find a resolution to this difficulty and he intended to consult on options in the coming months.  She noted that although the Irish Charities Tax Research Group had promoted a statement of guiding principles of charitable fund-raising since March 2011, to date only a small number had signed up to its principles.     

 

Cait Keane (FG, labour) asked: how long would it be deferred?  We should be doing something in the meantime, she said.  Perhaps the provision of funding could depend on registration with the voluntary guiding principles.  The department should examine how much putting the Act into effect might cost and it might not cost that much.  The establishment of another quango might concern some people, but it might be possible to transfer there staff from other bodies, so that its work could be done.  She said that there was a lot of duplication of provision and we should consider how we can eliminate duplication where seven, eight or nine charities were doing the same thing, each of them furnishing its office and employing staff.  Denis Landy (Lab, administrative) suggested that it was surely not beyond the scope of the government to find some mechanism within the Croke Park agreement to free up staff to set up the regulatory body.

 

David Cullinane (SF, labour) told the Seanad that his party would amend the Charities Act to provide for the recognition of human rights promotion as a charitable activity.  While it was important to have a strong charity sector and for people to make private contributions, it was critically important that charities were not having to fill gaps in the provision of services that should be filled by the state.  They wanted to limit the need for people to avail of charity in the first place and that could not happen in the absence of good social planning and economic policies, such as progressive taxation.  

 

Jimmy Harte (Lab, industrial & commercial) defended the activities of chuggers and he had no problem with them.  We could be called political chuggers, he said.  Generally, they were friendly and doing a job nobody else wanted to.  If they got paid for it, good luck to them because if they could convince someone to set up a direct debit, the money was much easier to collect.  He would not criticize them.  It was neither easy to collect money nor look for votes.