Charities

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1 Debates: Charities, top ups and regulation

Sinn Fein introduced a private members Bill designed to ensure the enactment of the unenacted parts of the Charities Act, 2007 by 31st May and to amend the Act to include human rights as a legitimate area of charitable activity (first stage: Dail Eireann, Debates, 16th January 2014, 52-3; second stage 21st January, 96-116; 22nd January, 583-605).  Introducing the Bill, Padraig Mac Lochlann (SF, Donegal NE) accused the previous government of passing shiny legislation but never implementing it and the present government of dragging its feet  ‘allowing scandal after scandal until it got so big that they had no option but to agree to the establishment of a regulatory authority’.  The recent scandals had had a hugely negative effect and a Wheel survey found 53% of charities had suffered a drop in fund-raising, a quarter had received phone calls or correspondence and 14% of volunteers had received negative or abusive comments.  The Bill also reinstated human rights as a legitimate form of charitable activity.  It was important that it be made clear that what happened at the Central Remedial Clinic (CRC) would never happen again.

 

Martin Ferris (SF, Kerry N) said that charity should not be necessary in a just society, but was vital in an austerity one.  Irish people were generous to charity and it should not be siphoned off for other purposes: the government that had made charity urgent owed us to make sure that did not happen.  The Bill attempted to protect the generosity of citizens.  This Bill would ensure enactment by end May: why should it be delayed any longer?  Jonathan O’Brien (SF, Cork NC) spoke of the ever increased pressure on charities and how social welfare officers were now re-directing people to the Society of St Vincent de Paul.  The minister could restore public confidence by the stroke of a pen.

 

Aengus O Snodaigh (SF, Dublin SC) spoke of the rising pressure on the Society of St Vincent de Paul and the Simon Communities.  He appealed to people to continue to give to charities.  Sandra McLellan (SF, Cork E) spoke of the valuable work of charities in her own constituency.  Michael Colreavy (SF, Sligo – Leitrim N) told of the work of the Society of St Vincent de Paul in helping people heat their homes and how ALONE still works to alleviate the suffering of older people.  He described as obscene the salaries of the senior executives of some charitable organizations and as questionably criminal the diversion of slush funds for pension benefits, unethical practices which might have been going on for years.  People had been put by the political system into positions that they could exploit for their own gain: was it as a pay off for loyal political party membership?  Corruption worked best from the top down.  Auditors and accountants appeared to have noticed nothing and something was seriously wrong here.  It would be tragic if the actions of a few selfish, greedy, unprincipled and unregulated individuals were to blemish the record of heroic volunteers.  People must have the confidence to know they will not be conned again and we had to consider how to legislation against cronyism and golden circles.

 

Responding, the Minister for Justice & Equality Alan Shatter expressed his concern at recent disclosures.  He explained how the government had had to delay the implementation of the Act due to the urgent need to reduce government spending.  To minimize costs, the charity authority would now be established on a small scale, staffed by officials from his department.  Charities would be required to meet some of the operational costs by a modest, proportionate annual fee and in this way the regulation of charities will become largely self-financing: ‘it is only through utilizing this provision [of the Act] that we are able to establish these new structures at this time of constraint in government spending’.   Registration fees will not be payable before 2015 earliest.  Sanction to fill the CEO post on an interim basis and ten other administrative posts was given in December.  Their first task would be preparation of the publication of a statutory register.  The staff positions would be filled by end February and the board by easter, for which he would issue a call for expressions of interest.  The authority would be formally established by ministerial order and the register published before end 2014.

 

As for the objective of the Bill to reinstate human rights as charitable, the minister said that human rights could only be charitable ‘in the case of a human rights charity that has consultative status with the United Nations’ or in the case of existing exemptions.  The minister concluded by detailing to the house the manner in which he was now winding down the state compensation scheme to charitable lotteries and specifically addressed the operation of Rehab Lotteries.

 

Derek Keating (FG, Dublin MW) raised the question of top-ups in Our Lady’s Hospice, Harold’s Cross.  Tom Barry (FG, Cork E) said that he failed to see the need for enormous salaries for chief executives.  Patrick O’Donovan (FG, Limerick) spoke of ‘the-dog-ate-my-homework type excuses and how damage done had to be repaired. The days of sending people out with a bucket to collect top-ups of €370,000 must stop. Paul Connaughton (FG, Galway E) said that people must be held accountable and the money re-paid.  Niall Collins (FF, Limerick) cited the costs of the regulator in Northern Ireland, £800,000, but even with charities here paying fees of €75 to €500, there would still be a significant gap to pay for the 20 staff expected.  Eamon O Cuiv (FF, Galway W) described the savings from not appointing a regulator as small compared to the loss of income to charities as a result of recent events.

 

Maureen O’Sullivan (ind, Dublin C) described what she called an offensive and pervasive odour of greed, selfishness and corruption.  The CRC board was almost a Who’s who? of members of Fianna Fail.  The CRC and other institutions like the Mater allowed themselves to be used as a thank you. Small charities had an amount of paperwork, rules and regulations to go through to get charitable status and pay professional fees: where was that governance for larger charities?  Seamus Healy (ind, Tipperary S) spoke of how the debacle had the potential to destroy the funding base of charities. Catherine Murphy (ind, Kildare N) commented on how we could see how vulnerable were these services when donations fell by half.

 

Stephen Donnelly (ind, Wicklow) questioned why the chief executive and staff should be drawn from the civil service.  This would be a major mistake.  There were many others with valuable experience and expertise in the charity and private sector, academia and the public sector.  Damien English (FG, Meath W) noted how state support for the voluntary and community sector had fallen 20% to 40% while Irish giving to charity had fallen below the British level.  The CRC crisis had a profound effect, with some charities down 40% to 60%, while the longer-term impact might be more profound. Joe McHugh (FG, Donegal NE) contrasted the regulation of the farmer community with a man making off with €742,000 without regulation, which was disgusting.  Jim Daly (FG, Cork SW) referred to unparalleled anger about what had happened and he regretted the response of Rehab.  We cannot assume that because an organization is charitable, it is holier than thou.  The Bill was lost 84-40.

 

The Dail debated the situation in Rehab (Dail Eireann, Debates, 23rd January 2014, 752-5).  The Tanaiste, Eamon Gilmore, told Billy Kelleher (FF, Cork NC) that rather than support lottery fund-raising, the state might fund it better to consider whether those millions could be used elsewhere such as in front-line services.  The government must ensure that controversy did not undermine public confidence in charities.  Aengus O Snodaigh (SF, Dublin SC) drew attention to the continued lack of regulation of charities.  What had been uncovered in CRC, Irish Water, Poolbeg and elsewhere was a toxic political culture of top-ups, bonuses, jobs and contracts, something rotten in the state.  Was it appropriate that the head of a charity earn more than the Taoiseach and ten to 20 times more than social welfare?  Would all charitable organizations make disclosure?  The Tanaiste agreed that salaries should be made known.  

 

According to Aengus O Snodaigh, the root of the issue was that a chaotic mix of public, private and charitable provision had been allowed to develop and government must bear responsibility.  Although government provided funding, the arm’s length relationship permitted poor accountability.  The Tanaiste explained that the government was coming to grips with what had happened and there must be accountability, with the best possible service and transparency.  

> See also: Dail Eireann, Debates, 21st January 2014, 326-7; 23rd January, 923.