Brexit Voices: How would the UK leaving the EU affect charities?

The possibility of a British exit from the European Union has raised fears of instability in trade between Ireland and the UK, which is worth an estimated at €1 billion a week, and is potential to cause ripple effects across the economy.

Where those ripples could be acutely felt is amongst charities and that could continue for a lengthy period of time after the dust settles, according to Mark Carrigan, managing director of the Ireland Fund of Great Britain.

Should trade between the countries be adversely affected by 10 per cent, people’s incomes, jobs and ability to give to good causes could be hit, he says.

“If you look at economic performance over history since, more a less, the great depression… and you look at giving to charities, they typically follow each other with a two year lag. And so as and when an economic impact happens, you see the full effect on charitable giving about two years afterwards,” Carrigan says.

The Ireland Fund of Great Britain is one of 12 worldwide chapters of the Ireland Funds, an organisation set up by Sir Anthony O'Reilly and Dan Rooney in 1976. In the 40 years it is has been in operation, it has raised over $500 million through its philanthropic network.

Economic connections

Britain’s membership of the EU is very advantageous for Ireland as a trade partner and charities benefit from the close economic connections, says Carrigan. Upsetting that connection - with a vote to leave - could cause flux and instability.

"The fact that Ireland is such a strong trading partner and benefits greatly from its trade relationship with Great Britain and also has Great Britain as an ally in Europe, if that were to change…we don't know what the impact on Ireland would be," he says.

“The one thing that we know for certain is that a vote to stay in Europe is a vote for certainty, while a vote to exit is one for the unknown, a ‘leap in the dark’ as the politicians have been calling it, and a guaranteed period of uncertainty, disruption and inefficiency.”

He adds: “Nobody knows. Nobody is aware exactly of what could happen. We know what the status quo is. We know how things work at the moment and how things can be guided in one direction or the other.”

Subsidies

Charities in England which help members of the Irish community have received subsidies and grants from the EU, a situation which would end in the event of an exit.

“Many argue that Great Britain is a net contributor to the EU and so would be better off but the question to ask is if the UK government would see fit to replace this funding in a like for like manner or if it would need to direct it towards other priorities. It would no longer be influenced by Europe,” says Carrigan.

Under EU laws, member states must give the same tax concessions on donations to a charity based in another EU country as it would to a domestic charity - a rule which could also face an uncertain future should Britain leave, with obvious implications for those charities with Irish links.

“The situation at present is that the EU encourages cross border giving and as long as an organisation meets the requirements to be a registered charity in the jurisdiction where it resides, then it should be able to benefit from tax effective giving across Europe,” Carrigan says.