IRISH CHARITIES are being asked to sign up to a voluntary code of practice that will require them to publish annual accounts and provide information to the public on how their money is being spent. The code has been developed by the industry’s co-ordinating body Irish Charities and Tax Research which is hopeful that most of the 5,700 charities operating in Ireland will sign up to it.
Ireland is unique within the European Union in that there is no formal register of charities. There is no legal requirement for charities to publish their accounts and there is no agency to pursue them for malpractice. These reforms were promised by a Fianna Fáil-led government when it took office 14 years ago. The necessary legislation was eventually passed in 2009 but its key provisions have yet to be activated by ministerial order.
It has been estimated that charities operating in this State collect more than €500 million annually in donations. They enjoy various tax reliefs. But, as in any unregulated sector, abuses and malpractice have crept in over the years. Failure to deal quickly and effectively with these problems has exacerbated the situation. This voluntary initiative is a welcome development, but it will not deal with a hard core of dishonest organisations. That can only be done through the structures and powers contained in the Charities Act.
In the past, some smaller charities argued that statutory regulation and excessively bureaucratic requirements could put them out of business. Because of that, the Charities Act favours a non-statutory code of practice, combined with legislation that requires formal registration, collection permits and financial accountability. The two main pillars of the Act provide for the appointment of a charities regulation authority to oversee and enforce its provisions, and a charities appeals tribunal to deal with complaints. Neither of these bodies has been appointed.
It is unacceptable that well-run and accountable charities, which engage in vital social and humanitarian activities, should have to operate in a climate of suspicion generated by the fraudulent activities of suspect organisations. Their dubious operations have the capacity to poison the well of public generosity. Legal requirements to register, to keep books and accounts, and to provide information on the amounts of money collected and then spent on charitable purposes are all critical to the maintenance of public confidence. The new Government should implement the provisions of the Charities Act as soon as possible.