Console controversy: Every crisis can damage all charities

Footage of Mercedes and Audi cars being taken into possession by the interim chief executive of Console over the weekend sent out a discordant image that said: this is everything that a charity should not be.

The scandal at the suicide charity is the latest in a series of disquieting controversies that have hit the charities sector in recent years.

All charities depend, to varying extents, on fundraising, and if public goodwill is damaged it has a knock-on impact on funding. The high-profile disclosures on executive pay levels in the Central Remedial Clinic and Rehab, had a cooling effect on fundraising at the time.

Such crises happen only occasionally and have involved only a handful of charities out of many thousands that operate in Ireland.

Nonetheless, each crisis can cause damage to all organisations and highlights deficiencies in regulation, governance and invigilation for the sector until now.

The irony is that really strong legislation designed to prevent such practices has been in place since 2009. The difficulty is that the key provisions of the law have never been commenced or sprung into action.

For a relatively small State, Ireland has a huge number of charities, well over 8,000, not counting the 3,600 or so schools that have a charitable status. They range from behemoths such as Concern, Trócaire, Oxfam and St Vincent de Paul, to tiny charities with little funding and only a handful of volunteers.

The Charities Act 2009 defined what a charity was for the first time. The definition takes in anything that benefitted the community or a section of the community, including relief of poverty, education, arts, religion, the environment, health, disability, child welfare and animal welfare.

Governance

The Act also required all charitable organisations to register and laid down rules on fundraising activities, operations and governance. It also envisaged the establishment of a charity regulator. Part four of the Act gave powers to investigate financial irregularities and allegations of mismanagement. Part seven of the Act was another powerful tool, laying down principles on fundraising.

The approach of some charities to fundraising has caused contention. Examples are “chugging”; the use of non-sealed collection tins; and a charity lending its name to a commercial operation for a tiny fraction of the profits.

The Act was strong but its arrival coincided with the recession. Much of its provisions were long-fingered, notwithstanding high-profile scandals.

Businesswoman Mary Ann O'Brien became a member of Seanad Éireann in 2011. She and her husband Jonathan Irwin had founded the Jack and Jill foundation. Given the controversies live at the time, and her own personal experience of isolated cases of cavalier attitudes, she decided to have an in-depth look at the 2009 Act.

“You must remember there was €4 billion of State funding swilling around in the charities sector with no proper oversight,” she said.

O’Brien produced an excellent report in 2013, in which she highlighted the fact that the most powerful parts of the 2009 Act were still shelved.

“My desire to reform the regulation of Irish Charities is based solely on a love and a deep-rooted respect for the sector and the thousands of men and women who are working tirelessly to improve the lives of those they encounter. My only agenda is simply improving public trust and faith,” she wrote in the foreword.

There has been progress since then, but it has been fitful. The regulators' office came into being, and a little over a month ago a permanent charities regulator, John Farrelly (formerly of HIQA), was appointed.

After a slow start, including an extension of deadline, the charities register itself is nearing completion. There are over 8,000 charities registered with an additional 1,500 being processed. In addition, a separate bulk registration is under way for 3,600 schools.

Problems

But the lack of commencement for part 4 and part 7 still presents problems. Farrelly and his team had to refer to a 1963 Act for the process to refer Console founder

Paul Kelly

to the Director of Corporate Enforcement.

Things are moving more quickly now. The regulator has been given extra resources to recruit more staff.

Tánaiste Frances Fitzgerald has committed to fast-track the commencement of part 4 to early September. That will allow the regulator recruit an inspector of charities, and specialists who will be able to pick up early on any risk.

It would be counterproductive to swamp tiny charities with few resources with paperwork.

Yet Farrelly points out the fundamental principle at play: “Compliance is not an option. Not everyone has got that yet.”

For his office, it is “about having the powers and having the courage and conviction to use them”.

“When part 4 is commenced we will have both in place and we will use them.”