Benefacts facing closure due to funding doubts

Benefacts, the data analytics company that assesses the state of Ireland's non-profit sector, is facing closure due to question marks over the future of Government funding.

Each year the company releases data scrutinising the finances of more than 10,000 non-profits including charities.

Employing about 20 people, it receives almost €1 million from the Department of Public Expenditure and Reform each year, accounting for about two thirds of its operating costs. Chuck Feeney's Atlantic Philanthropies played an initial role in financing the organisation.

However, while it is understood that separate philanthropic funding has been secured for the next two years, the viability of its operations is under threat if State backing is withdrawn.

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Discussions are understood to be ongoing between various Government departments on its future.

Confirming the threat, Benefacts managing director Patricia Quinn said any such cessation in funding would mean that from next year public servants, researchers, analysts, philanthropists and the non profit sector itself would lose an invaluable resource "at a time when Covid-19 has made digital access to trustworthy data more important than ever".

“With notice of the termination of its existing funding arrangements, Benefacts’ future is now in serious doubt but we remain open to discussion with Minister [Michael] McGrath and his officials about how the benefits of our work for the sector and others can be sustained into the future,” Ms Quinn said.

Benefacts aims to “convert data into intelligence” by compiling information from 10 publicly accessible sources including the Companies Registration Office and the Charities Regulator.

Its work is highly regarded as a source of information in the sector. Earlier this year it warned, through its analytics, that small- and medium-sized charities were facing funding losses of €1.5 billion in 2020 due to the Covid-19 pandemic.

Research

Dr Oonagh Breen, professor of law at UCD said its work was a "vital resource" for academics in the area of charity and non-profit law related research.

“Nowhere else can one find – on an open source basis – current governance data and PDFs of constitutions and previous year’s financial accounts,” she said.

“Building on reliable data, Benefacts’ reports allow trends not only to be identified but mapped over time. This enhances empirical research on non-profits and, in turn, informs our understanding of our sector, enabling better policies and laws to be established.”

Sean Moynihan, chief executive of the charity Alone noted how Benefacts' "quality and consistent" data was evident at the start of the Covid crisis "when we were able to get real hard data on key metrics such as fundraising dependency, employee numbers and payroll".

A report compiled for the department last year by Indecon Research Economists identified a demand and requirement for data on the non-profit sector by a number of public bodies, currently provided by Benefacts.

“The overall benefits of the Benefacts’ service are likely to be in excess of the costs,” it said, although added that there was a need for even more specialised data.

“The methodologies used by Benefacts are appropriate and are in line with the approaches used in other countries. Some enhancement of the services would be useful and there is an alternative option for more centralised public service provision.”

The Department of Public Expenditure and Reform said it has provided grants totalling €4.67 million to Benefacts since 2015.

It said the project has met broad objective of helping government departments and public bodies to determine their demand for data on the non-profit sector.

“The Department is now working with these organisations to determine the scope of services to provide that data into the future,” it said.

“This will ensure value for money and allow data on this important sector to be provided on a permanent basis from within the public service.”