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Beyond Ireland’s private and public sectors, lies a third sector, a sector that is poorly understood and seldom acknowledged by the state. This overlooked sector has operated for decades without a national strategy, comprehensive state infrastructure supports and until recently, coherent regulation. Yet, the third sector’s vital pulse runs through every community in Ireland, and it makes a significant contribution to prosperity: 158,000 people are employed in this sector (7.3% all of all the paid jobs in Ireland), it generates annual turnover of €12.1bn and mobilises an army of nearly half a million citizens to volunteer around 232.8 million hours of unpaid work per year.
Most importantly, it delivers a wide range of key services and supports to society in areas such as community development, health and care provision. This is accomplished either through community-led activity or through working with state agencies and bodies.
Today, part of this overlooked sector will come into public view when the Charities Regulator publishes a milestone report on governance in the charity sector. The Report of the Consultative Panel on the Governance of Charitable Organisations proposes a new governance framework that will provide a solid foundation for supporting good governance practice in the community, voluntary and charity sector.
Significantly, this report acknowledges the unique characteristics of nonprofit organisations and the distinct challenges facing the multitude of unpaid trustees who volunteer their time to govern Ireland’s 9,931 charities. It is another important step marking a more engaged relationship between the state and the community, voluntary and charity sector.
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This new spirit of engagement is evident in a number of initiatives underway in various government departments. The Department of Rural and Community Development is currently working on a national plan for community development and the voluntary sector, as well as a national social enterprise strategy. At the same time, the Department of Health is completing a public consultation on the role of charities in the provision of health and social services, and the Department of Finance is busy implementing new measures (first announced in Budget 2018) that will compensate charities for some of the VAT they pay. In turn, charities are embracing a new era of regulation, transparency and compliance.
These developments are remarkable if one considers that less than a decade ago, there was no regulatory framework for charities in Ireland. Oversight of the sector was, at best, piecemeal, and unlike businesses, charities had little guidance or practical support from the state. As we have seen in recent times, the state’s previous laissez-faire approach has occasionally left the sector vulnerable to exploitation and bad practice.
The Wheel and others in the charity sector stepped into this vacuum and vigorously campaigned for coherent regulation, legal recognition and greater engagement between the state and the nonprofit sector. The 2009 Charities Act addressed many of these issues and laid the foundation for the introduction of the Charities Regulator. In 2012, charities again took the initiative to create a voluntary governance code for the sector. This code will now inform the new governance framework described in the Charities Regulator’s report .
Somewhat ironically, the increased engagement between the charity sector and the state is creating a new set of challenges. Organisations now face a raft of regulatory and reporting requirements from a range of regulators and funders, including the Charities Regulator, the Lobbying Regulator, Data Protection Commissioner and for many charities, the HSE, Tusla and HIQA. These requirements are placing additional strain on many organisations and their voluntary trustees. This will be further compounded when the General Data Protection Regulations (GDPR) come into force on 25 May.
Charities are up for the challenge, but we need joined up thinking from the state and regulators to avoid unnecessary duplication and administrative costs. State authorities also need to recognise that the large amount of form-filling and repetitive administrative work now required by different oversight bodies is diverting resources from the core work of charities, and that this work need to be funded.
People support and commit to charities to benefit society and those in need, not to fund duplicate form-filling and related administrative costs.
Ireland’s future prosperity will come from having socially, economically and environmentally sustainable communities, which charities help to create. By addressing the strategic needs of our third sector and adopting a partnership approach, Government can help to increase the positive impact of this precious national asset.
Deirdre Garvey is CEO of The Wheel, the national association of charities.