More than 30% of charities not filing annual reports on time, notes regulator

More than one-third of Ireland’s 11,500 charities are not filing their annual reports on time, drawing criticism from the regulator now investigating why so many are neglecting their statutory responsibility.

Publishing its 2021 annual report on Tuesday, Charities Regulator chief executive Helen Martin homed in on the issue, saying the level of unfiled accounts was of particular concern.

It follows research from the body last year which found that while 86 per cent of people believe charities are important, only 36 per cent place a high level of trust in them, and with many expressing an appetite for greater transparency.

The regulator has signalled its intention to apply a stricter response to such failures in the future.

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Charities must report the previous year’s financial activities within 10 months of the end of their fiscal year, in accordance with legislation.

Just 64 per cent of charities filed their accounts on time during 2021. While total filings for 2020 activities increased by the end of the 2021 calendar year to 79 per cent, one-in-five charities had still failed to publish accounts.

“The decline in the number of charities filing their annual reports within the required timeframe is disappointing and remains a concern particularly given that research shows the reporting requirements are not considered to be unduly onerous,” Ms Martin said in a statement accompanying Tuesday’s report.

Statutory requirement

In the context of inflation, funding pressures and public confidence, she said “the question for charities is whether they can afford not to comply with the requirement”.

The regulator’s registration and compliance units are now assessing why some charities are failing to meet the statutory requirement.

A similar proportion of charities (31 per cent, or 4,245) who filed annual reports did not declare full compliance with the sector’s new Charities Governance Code. A phased rollout of the code, which includes 32 “core standards”, began in 2020 with obligatory reporting beginning in 2021. A further 15 per cent declared partial compliance.

The regulator’s report noted that sampling it undertook on declarations of full compliance found 63 per cent to be accurate.

Ireland now has exactly 11,426 charities, with 282 new organisations registered last year, including 98 schools.

Almost half of such organisations report annual incomes of less than €250,000; 15 per cent more than €1 million; and 5 per cent more than €5 million.

The regulator opened two statutory investigations last year in relation to North Inner City Homeless and Birdwatch Ireland, although the report did not elaborate on their content or progress. Another two investigation reports were published relating to Childfund Ireland and Cabhrú Housing Association Services.

Last year saw 568 “concerns” registered with the regulator of which 543 were closed. That marked an increase of 22 per cent on the previous year although Ms Martin said that was somewhat expected given the gradual resumption of activity following Covid-19-related public health restrictions.

The top three areas of concern were governance (37 per cent), legitimacy of a charity (35 per cent) and financial control and transparency (19 per cent).