Charities’ financial records ‘may damage sector’

Benefacts criticises the failure of some organisations to publish detailed accounts

The reluctance of some charities to publish detailed financial accounts may be contributing to public scepticism about the sector, according to a charity database. File photograph: Getty Images/iStockphoto

The reluctance of some charities to publish detailed financial accounts may be contributing to public scepticism about the sector, according to a charity database. File photograph: Getty Images/iStockphoto

 

The reluctance of some charities to publish detailed financial accounts may be contributing to public scepticism about the sector, according to a charity database.

Legislative changes brought in as part of the Companies Act, 2014, allowed non-profit organisations to begin publishing abridged accounts in the same way as private companies.

A new analysis by the database Benefacts has revealed that 23 per cent of Irish charities opted to publish such accounts in 2015.

Speaking at the unveiling of the Benefacts Nonprofit Sector Analysis on Friday, the organisation’s managing director, Patricia Quinn, described the trend as “disappointing” and said it could damage public confidence in charities.

“Individual non-profits themselves need to reflect on the quality of their public disclosures about their work and its impacts.

“It’s hard to see how you can expect people to trust you more when you tell them less, as 23 per cent of charities chose to do in 2015,” she said.

“What it means is that the public now has much less information to use in understanding where the money comes from and what they’re doing with it in non-profit organisations.

“It’s entirely legal but it’s just a disappointing trend, because you would think charities and non-profits would want people to know what they’re doing and not want to hide.”

The report revealed that Irish non-profit organisations generate almost €11 billion in turnover annually, almost half of which comes from the Government.

It also also found that more than 70 per cent of Government funding to in excess of 8,000 bodies in the sector goes to a group of just 347 organisations, made up of healthcare and education providers.

Disclosures

Ms Quinn was also critical of requirements which stipulate that many non-profit organisations and charities must file half-a-dozen disclosures in the space of a year in order to comply with criteria for public funding, much of which involves the repetition of the same information.

“Don’t get me wrong, I’m not against accountability, but it’s in everyone’s interests that this go hand-in-hand with transparency and in this digital age we can surely do something to improve on the Byzantine arrangements for reporting that plague this sector,” she said.

The organisation’s analysis showed that Irish non-profits employed 5.5 per cent more staff in 2015 compared with 2013.

It also found that income from fundraising and donations increased by 15 per cent year-on-year for these organisations over the same period.

Just in excess of 1 per cent of employees in the non-profit sector earned more than €70,000 in 2015.

A select few earned between €200,000 and €300,000, most of whom worked for quasi-public bodies funded largely by the Government.

At the event on Friday, Minister for Public Expenditure and Reform Paschal Donohoe, whose department provides significant funding to Benefacts, emphasised the value of the data that had been made available.

“In the environment of fake news and post-truth politics, the value of these things is something now that we can’t take for granted, and maybe the value of this is even higher than it was a short time ago,” he said.