Transparency around the charity sector is vital

Irish people are among the most charitable in the world. Nine out of 10 adults donated to charity in 2022, according to figures from the Charities Regulator. Meanwhile, the crowdfunding platform GoFundMe has ranked Ireland as the most generous country in the world for the past four years.

Over the past decade, however, a number of controversies have hit the charity sector, with Bóthar, Console, the Central Remedial Clinic, Goal, Gorta and the Peter McVerry Trust among those to face difficult questions.

Alongside the issue of senior staff these controversies damaged public confidence in charities, while a more recent survey from the Charities Regulator found that members of the public also have concerns around transparency in Ireland’s approximately 10,000 charities and 20,000 not-for-profit organisations.

The survey by Amárach Research also found that almost 40 per cent of adults were concerned that charity regulation is not having any effect, holding a view that there is no evidence of consequences for non-compliant charities. Are they right, or can they be confident that their donations are well spent?

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Sandra Velthius owns and manages Whitebarn Consulting, which provides a range of information and support services to charities, voluntary organisations, community groups, NGOs, social enterprises, co-operatives and to the public and private sector bodies that work with them. She says that compliance has beefed up, and that charities have to adhere to a variety of rules and regulations.

“In order to become a charity in Ireland an organisation has to prove that they operate in the jurisdiction, have one or more charitable purposes and provide public benefit,” Velthius says. “Only if the Charities Regulator is satisfied that they meet all the relevant criteria will they be entered on to the public Register of Charities. They must then adhere to all charity law and other rules set out by the regulator.

“If they are in the health sector they may have to comply with Hiqa and HSE standards. Depending on their legal structure and activities, they may be accountable to An Garda Siochána, the Data Protection Commission, the Health and Safety Authority, the Health Information and Quality Authority, Revenue, the Standards in Public Office Commission and many more.

“In some cases they have to report on a regular basis to such agencies, and much of this information is then made publicly available. For instance, anyone can browse the Register of Lobbying to see what those charities that engage in advocacy as part of their work have been up to, and all returns that charities which are companies limited by guarantee have to make to the Companies Registration Office can be purchased for a small fee.

“Sometimes charities undergo regulatory inspections and the reports from these are then published for all to see. Examples include the Mental Health Commission for approved mental health centres, some of which are charities, and the Department of Education and Skills for schools, most of which have charitable status.

“Additionally, charities are accountable to their funders. These can be government departments, statutory agencies, corporates, trusts and foundations, both in Ireland and further afield,” Velthius says.

Amy Carr is director of fundraising and marketing at Focus Ireland, a charity working with homeless people and those at risk of homelessness. She says that annual statutory audits, periodic audits by State funders, publication of audited financial statements, and being signed up to and compliant with a range of best practice codes are among the ways in which Focus Ireland provides reassurance to funders, supporters and other stakeholders.

“The rules, particularly around financial matters, are stringent and enforced,” Carr says. “For example, charities are legally required to file annual reports with the Charities Regulator within 10 months of the financial year-end, those who don’t are investigated. Focus Ireland also submits its annual report to competitions where they are scrutinised by a range of professionals who provide robust feedback on any lack of clarity. Focus Ireland is regularly shortlisted in these awards.”

Velthius says that in her experience many charities actively go beyond the minimum requirements. “For example, internally they might find innovative ways to involve service users in their work or they might establish and communicate very clearly defined roles, responsibilities and decision-making flows for all who are part of their organisation. Externally they might show how well run they are through voluntary compliance with quality frameworks.”

Online commentary occasionally suggests that charities should be entirely staffed by volunteers, but this assumes that the well-educated and skilled people needed to run a complex operation would be willing – or able – to work for free.

“There is still not a full public understanding of the range of roles and activities that exist within the charity sector, and charities need to do more to explain what they do and why paid, qualified staff are needed,” says Carr. “Recently we have found that the conversation has shifted, and the public’s focus is moving towards supporting based on the impact that the charitable organisation can demonstrate. Most people want to support charities which make the most impact and advance their mission. To tackle one of the most challenging issues in the country and end homelessness for thousands of people every year we need to have a skilled and dedicated workforce.”

Velthius, meanwhile, says that while some regulation could be streamlined, and there is some duplication, charities are dealing with complex questions and protecting vulnerable people, so it is right that there must be some administrative burden.

“In any sector there are always going to be some bad apples. If a rogue politician is spotlighted do we give up on democracy? If one judge makes a dodgy ruling, do we distrust our entire legal system? If one retailer acts unethically do we stop buying things? No. In the private sector fraud happens regularly, but the entire sector is not held responsible. Indeed, it’s likely that in the future a charity scandal will happen again but because of how the sector is now regulated people should be better held to account than they perhaps were before.”