Crisis at Peter McVerry Trust deepens as councils look to exit housing projects with charity

At a nondescript entrance facing St Stephen’s Green, people came and went through a blue door that leads to one of the Peter McVerry Trust’s largest homeless hostels in Dublin city.

Most people living in the homeless accommodation did not want to stop and talk. Some sat on nearby steps smoking cigarettes; others headed to work.

One man living in the hostel said the financial crisis facing the charity cast an “uncertain” cloud over the trust. The turmoil, which has pushed the charity to potential collapse, was concerning for people in its services, he said.

The charity, one of the largest providers of homeless services in the State, has been fighting for survival since the middle of this year.

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At that point it owed trade creditors €9 million and had a €8.3 million tax bill, with insufficient funds to pay these bills or staff.

In the continuing fallout several local authorities are reviewing plans they had to build or buy housing with the charity.

Frank d’Arcy, Dublin City Council acting assistant chief executive, told councillors earlier this month that it was in talks with other housing bodies to take over several projects it had started with the trust.

Roscommon County Council, Sligo County Council and Longford County Council also confirmed they are looking for other housing bodies to take on housing projects in which the Peter McVerry Trust had been involved.

The charity has said it is conducting its own review to examine its “capacity” to deliver 500 homes it had planned to provide “through purchase, lease and construction” over the next three years.

The trust sought a bailout of about €8 million from the State last month, with a portion of interim emergency funding released in recent days to allow it to stay afloat in the short term.

An oversight group comprising the department and Dublin Region Homeless Executive (DRHE) officials has been examining the request and the charity’s wider financial and governance problems.

Barrister Stephen Boggs, who was brought in to chair the oversight group, wrote to Minister for Housing Darragh O’Brien with its recommendations on November 1st. The minister is considering them.

Within the wider homeless services sector, the charity has a reputation for underbidding others to win State contracts.

As a result it had to rely on fundraising income more than others, which, senior figures in rival housing charities privately say, left it financially vulnerable.

The charity takes in close to €10 million in donations a year on top of more than €40 million in funding it receives from the State.

There are fears the current controversy will hinder fundraising, compounding financial difficulties.

One businessman who has given six-figure donations to the charity said he was taking a “wait and see” approach before giving any more money.

Big companies that have raised funds in recent years include retail chains Harvey Norman and Homevalue, social media network Twitter, food delivery website Just Eat and Leinster Rugby.

One of its biggest donors in recent years has been another charity that helps the homeless, the Capuchin Day Centre.

Financial records show in the last five years the Capuchin centre has donated €14.7 million to the trust, to go towards building social housing for homeless people.

The Capuchin centre transferred €5 million of its reserves to the trust in both 2018 and 2020 and €4.7 million last year.

Brother Richard Hendrick, chair of the Capuchin centre, said it had partnered with the trust after a visit from Pope Francis to the centre during his trip to Ireland in 2018 saw a “surge in donations”.

The centre decided to use some of the funds “to support an established housing provider to provide social housing for homeless persons”, he said.

“This non-recurring initiative came to an end with the final donation in 2022 and no further such initiatives are planned”, Br Hendrick said.

While internally there are fears public donations may dry up, the trust is being squeezed by suppliers and creditors chasing unpaid bills.

It owes €7 million to trade creditors at the moment, and some suppliers have threatened to stop providing services unless they were paid. A small number have issued solicitors’ letters seeking payments.

Pat Doyle, who stepped down as chief executive of the trust after 18 years earlier this year, has not commented on the controversy.

His replacement, Francis Doherty, resigned after just four months in the job, claiming tensions with the board had made his position untenable.

In a scathing resignation letter on October 11th, Mr Doherty said he had identified a “substantial amount of concerning information” about practices that predated his appointment.

He claimed this included the “potential mismanagement” of donations, “huge” spending on a homeless hostel in Co Kildare, potential conflicts of interests and how the charity’s accounts “overstated” the value of its assets.

It is expected these claims will be examined by one or both of the parallel statutory investigations being undertaken by the Charities Regulator and the Approved Housing Bodies Regulatory Authority.

Internal correspondence shows the Charities Regulator’s enforcement unit had asked the regulator to appoint statutory inspectors two days before Mr Doherty stepped down.

Among former staff watching the crisis unfold in recent weeks and months, some believe the financial reckoning has been an inevitable one years in the making.

Three former Peter McVerry Trust frontline workers said the charity had expanded too quickly.

“They were always trying to stretch things ... There was this ethos that we have to help everybody,” one former worker said.

Another former staff member said the trust’s expansion appeared to be driven by a desire to be “the biggest” homeless services provider. “There was somewhere opening up every week; they expanded too quickly,” a third former worker said.

What had worked well on a small scale for Fr Peter McVerry in the early days was “never going to work” at the charity’s current size, he said.

Fr McVerry, the Jesuit priest and campaigner who founded the charity in 1983, still sits on its board and on its finance and governance committee.

At a round-table meeting with other homeless charities on November 8th in Leinster House, Mr O’Brien sought to provide assurances to the sector.

One source who attended said there was a discussion about financial issues being “specific” to the trust, as a result of a “breakdown in regulation and governance”.

However, in the wake of the controversy the DRHE is planning to commission independent audits of all charities it funds to run homeless services.

This week the Peter McVerry Trust said “unprecedented demand” on its services in recent years had “stretched an organisation that was already overstretched”.

“There is no doubt, with the benefit of hindsight and considering the inflationary impacts and construction delays associated with Covid-19 and geopolitical events, a more cautious approach to expansion would have been more prudent,” it said.

Previous bids for State contracts had been based on assumptions it could fundraise up to €10 million a year, it said.

“With the increased pressure on services, impact of inflation and subsequent reduction in fundraising abilities, the financial projections that underpinned those bids are now not aligned to present realities and are under review as we look to the future,” the trust said.

The Oireachtas housing committee has provisionally pencilled in January 16th for a meeting, with the trust and housing officials to take questions from politicians.

Eoin Ó Broin TD, Sinn Féin housing spokesman, said after charity’s services were “shored up” there was “going to need to be a wholesale change at board level”.

The public want answers about “what has gone on inside the Peter McVerry Trust,” he said.