Seanad debates

Wednesday, 1 May 2013

1:30 pm

Photo of Mary Ann O'BrienMary Ann O'Brien (Independent)
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I move:


That Seanad Éireann:- commends and expresses thanks for the tremendous work being done by the many thousands of Charities operating in Ireland at present;
- recalls that the Charities Act 2009 was enacted with the aim of supporting and enhancing public trust and confidence in charities, to provide for the statutory registration and regulation of charities operating in Ireland, including the establishment of an independent Charities Regulatory Authority;
understands that there are resource considerations that have led to the deferral for the present of further implementation of the Charities Act, including the establishment of the Charities Regulatory Authority;
- notes that putting in place a dedicated Charities Regulator will help to support and enhance public trust and confidence in the sector and allow it to flourish and reach its full potential particularly aiding the Government's 'National Giving Campaign';
- appreciates and welcomes the recent public consultation conducted by the Minister of Justice, Equality and Defence, Deputy Alan Shatter, designed to explore ways to progress the Charities Act of 2009 which closed on 20 March 2013;
- notes and welcomes that, as stated in the consultation document published by the Department of Justice and Equality on 23 January 2013, statutory independent regulation of the charities sector remains a Government policy objective, and the Department is now working to establish a Charities Regulatory Authority, as provided for in the Act, but taking account of the changed budgetary circumstances;
- acknowledges and welcomes the report published by Senator Mary Ann O'Brien on 26 February 2013 which explores the need for Charity Regulation in Ireland and presents various options for discussion in order to achieve a regulated sector;
- acknowledges the Private Members' motion sponsored by the Independent Taoiseach's Nominees on 27 March 2013 calling for a national debate on the current context and challenges facing the not-for-profit sector with regards to philanthropy, fundraising, sponsorship and private giving in Ireland which was passed by the Seanad without a vote;
- and looks forward to the publication by the Minister for Justice, Equality and Defence, once the review of the submissions received is completed, of the outcome of the consultation and further information regarding the Government's timeframe for the introduction of an operational Charities Regulator and full implementation of the Charities Act.
I welcome the Minister for Justice and Equality to the House. I congratulate him for undertaking to finally implement the post of charity regulator that we are here to discuss today. The post is badly needed in Ireland. Despite an excellent Bill being enacted in 2009 we all know that an economic tsunami hit soon afterwards that almost drowned us all and funding has not been possible.

My motivation for regulating the charity sector started in 1998 when my husband, Mr. Jonathan Irwin, and I co-founded the Jack & Jill Foundation. On our journey with the foundation we came in touch with other charities, with people who joined the foundation and with people who worked as social entrepreneurs and in the charity sector. I can vouch that there are thousands of extraordinary citizens who work for charities. They are guided by a moral and genuine passion for their cause that is exemplified by the activities that they undertake. That is why we are here today to see if we can, following a robust discussion, push for a badly-needed regulator post.

Earlier I published a paper that was designed to explore ways to progress and assist the Minister and his Department. I hope that it also invites thought and discussion on the needs of the charity sector and I mean that in a respectful way. All of us commend the work that has been done. Red tape, bureaucracy and conversation may go with the provision of a regulator but in no way do we mean to criticise the sector because people are 100% dedicated, passionate and work to a level of perfection.

Every couple of weeks there is a media report on charities. Last week in the Evening Herald an ex-CEO was found to have helped himself to cash from ATMs all over the country. Last Thursday I was surprised by a "Prime Time" report and then The Sunday Times published an article on charities last week. However, we do not want to discuss any of the reports in detail here. This is 2013 and we are living in a recession where citizens must scrutinise everything that happens in public life. Charities mainly deal with public money and the Government has given approximately €4 billion to the charity sector. A timebomb is waiting to explode and all it needs is one huge story on charities. We are being drip fed little stories and they have slowly but surely damaged the reputation of the charities sector. Ireland is a nation of givers but donations will decline if there is not transparency. The media feels that it has a right to know the salary of a CEO. Why do some charities respond with the phrase "No comment"? Transparency is required.

I was accompanied on my journey in the sector by a great gentleman called Mr. Conor Woods who works for Russell Brennan Keane. I salute him as he is seated in the Visitors Gallery. He is an expert accountant and also has expertise in corporate governance. I also salute my assistant, Mr. Kevin Kelly. We have all travelled on a long journey. We visited the Office of the Scottish Charity Regulator in Scotland and the Charity Commission in London where everyone was terribly helpful. Both organisations are government funded. They realise that England is going through a hard time and are considering a self-funding model.

At the back of my report there is a business plan to self-fund a regulator for the charity sector. Some may think asking charities to fund a regulator is a touchy-feely idea. Let us consider OSCR which has 23,066 charities registered in Scotland with 23 staff members and costs £3 million which sounds like a lot of money. However, it is possible to provide a regulator without having a vast number of people in an office. Ms Una Ní Dubhghaill is the Minister's main person to drive the initiative in his Department. She has advised me that we should slowly put the regulator post in place because we cannot achieve everything at once, even though she knows that I want everything done straightaway.

I shall outline another issue that I am crazy about. We have approximately 8,000 charities and one can research them on revenue.ie. The Government has given €4 billion to the sector and I am sure that the Minister is aware of that when he sits around a table with the Cabinet to discuss the sector. Imagine what could happen if the Government, academics, statisticians, students and the general public could access a central database to carry out research. People would be able to see how many charities provide for children, autism, health or are registered for foreign aid. The Government could easily check how funds are used and check value for money. There is a great need for such data and a regulator could provide it but that will take time.

Earlier this week I spoke to a famous philanthropic organisation that informed me that ten Irish charities have turned down donations because they felt unwilling - I presume that they felt unable - to produce the financial information to the level sought by foreign donors. We are all aware of the demands placed on businesses today. My company supplies blue chip companies abroad who audit us until we are blue in the face. It does not matter whether it is a British Retail Consortium audit or a financial audit, the same standards must apply to a company like Microsoft if it wants to make a giant donation to an Irish charity. That is another reason to have a regulator.

The Minister might respond to the suggestion standards similar to those required by the Companies Registration Office in respect of a business or SORP, Statement for Recommended Practice, for accounting practices should be put in place for the charities sector. According to Mr. Conor Woods, SORP provides for an extremely high level of accountancy standards recommended by the Office of the Scottish Charity Regulator and the charity regulator in London.

I acknowledge that there is a great deal going on in the country. I congratulate the Minister and his Department on the public consultation process, submissions to which are being sorted. While I acknowledge that this process will take time, we cannot wait until 2015 or 2016. The charities sector is a wonderful one, driven by volunteers and passionate individuals. Looking to best international practice in New Zealand, Scotland, America and England, we cannot in 2013 continue to allow this sector, to which we give €4 billion of taxpayers' money, to go unregulated.

1:40 pm

Photo of Fiach MacConghailFiach MacConghail (Independent)
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I welcome the Minister. We appreciate the time and consideration he has given to this issue and acknowledge his support for this dialogue in the Seanad. I also acknowledge and appreciate that the Government has not proposed an amendment to the motion.

The motion links with a debate we had with the Minister's colleague, the Minister for the Environment, Community and Local Government, Deputy Phil Hogan, a couple of weeks ago. In terms of the Seanad's role, this is an area not only fellow Senators but also the not-for-profit sector need to continue to debate and share information on. There is an element of trust we can bring to the debate. I am, therefore, proud to second the motion tabled by my colleague, Senator Mary Ann O'Brien, whose work in the area of advocacy and transparency I commend. Her recently published paper on implementation of the Charities Act 2009 provides an excellent context for the challenges facing the voluntary and not-for-profit sector. I am interested in hearing the Minister's views on how this might be funded, whether he agrees with the Senator's model of funding and so on.

I welcome members of the fund-raising and development community and not-for-profit sector who are in the Visitors Gallery. If I could have charged for seats, I would have made a great deal of money. Among those in the Visitors Gallery are representatives of the National Concert Hall, The Wheel, Jack and Jill Children's Foundation, Business to Arts and so forth.

As stated by Senator Mary Ann O'Brien, we are at an interesting crossroads in the philanthropic arena. Some good policies and fund-raising leverage schemes have been developed in the Department of Arts, Heritage and the Gaeltacht. We also heard recently in the House from the Minister, Deputy Phil Hogan, about the plans in his Department to provide significant matching funding in building fund-raising capacity and establishing a €10 million social innovation fund.

Members will be aware from the Seanad debate last month that the not-for-profit, voluntary and charity sector is operating in a declining public funding environment where the cumulative effect of year-on-year decreases in funding is taking hold. In my community, the arts community, there is growing emphasis on increasing private funding by the Government but an anxiety that this should not replace State investment. It is often the case that State investment leverages private funding. Therefore, the State's commitment is the hygiene factor in encouraging donations.

With the exitingthis year of the One Foundation and in 2016 of Atlantic Philanthropies, there is an onus on the State and the not-for-profit community to strengthen the capacity to diversify income streams and look for greater investment from private sources. My business which involves selling tickets for plays is one of the few that asks for money for a product in advance of a person seeing or experiencing it, unlike chocolate. This transaction is based on trust. The patron might not like the play but will trust us to present the highest quality of acting, direction and customer service. The greatest challenge we all have in the not-for-profit sector is providing for trust and transparency. Ireland is unique on the international stage in not having a charity regulator. I know that the vast majority of charities, including the Abbey Theatre, have nothing to hide. Publishing the costs of running a not-for-profit company will only benefit that company, create transparency which, in turn, builds trust. Trust also emerges from producing evidence and facts.

We know that, according to the 2009 report of the Irish non-profit knowledge exchange, the not-for-profit sector in Ireland employs more than 100,000 people across the community, voluntary, sports and cultural sectors. We know that this includes approximately 11,700 organisations, of which 8,000 are registered charities. With a turnover of €5.75 billion, this means that the not-for-profit sector accounts for over 3.25% of national income. However, as we await an update on the progress of the Charities Act, we should be conscious that we do not have relevant, up-to-date, accurate data for giving in Ireland. Implementation of the Charities Act 2009 would provide a stream of reliable evidence on which to build better policy and evaluate outcomes. If it is not possible at this stage to implement the Act, how else can we collect evidence?

One of the current debates in the not-for-profit sector is on the cost of administration and fixed cost with regard to implementing development and fund-raising strategies. Where I might possibly differ with Senator Mary Ann O'Brien - I am not sure about this - is on the question of whether the maxim that one has to spend money to make money is absolutely true. Ms Deirdre Mortell of One Foundation spoke in the Chamber earlier this year about growth capital as the basis for fundraising. We should not be afraid of admitting or hiding the fact that we have overheads and administration costs to help to raise additional revenues. It is a tough environment for philanthropy. While I know this for a fact, I would still take the risk of ensuring growth capital is protected to leverage more capital. I believe also that when the Charities Act is implemented, we will have other interesting data such as for how many Departments are funding the same charity. It would be helpful to have that information to ensure a more holistic approach to fundraising.

I reiterate the call I made in previous debates, that the Ministers, Deputies Phil Hogan and JImmy Deenihan, come together to share resources in terms of fundraising capacity and so forth. We should not be afraid of evidence or data or the cost in this regard because of itself it will enhance our understanding of the difficult environment in which charities are operating in raising funding. Putting in place a dedicated charities regulator would help to support and enhance public trust and confidence in the sector and allow it to flourish and reach its full potential, particularly in supporting the Government policy on fundraising and philanthropy.

Photo of Colm BurkeColm Burke (Fine Gael)
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I welcome the Minister. I also welcome the motion on what is an important issue when one takes into account the fact that there are more than 8,000 charities operating in Ireland which employ and benefit many people. They make a huge contribution to society. However, we do not have a regulator. Coming from a legal background and having worked with voluntary organisations for more than 30 years, I have been alarmed, particularly in the past five to six years, by the number of new groups setting up in this sector. I am concerned about the structures in place for small groups in communities registered as charities, many of which lack experience in this area. As recently as this morning, I made contact with Cork County Council about an organisation which was granted charitable status and is not now functioning but holds a valuable asset. We have reached a situation where we cannot even get the board members to meet.

When people get involved in this area, they should understand there are responsibilities and obligations. If at all possible, we should set up a proper regulatory structure, but there is also a need to improve the familiarisation and mentoring of people who get involved in this area. All the people on the boards of credit unions are acting on a voluntary basis but they have the opportunity to receive training and experience from people working in the area. With regard to charities, we do not have the same kind of structure in place to give that kind of support. We need to work towards that.

The current problem is that, with the reduced funding available for organisations, a number of them are experiencing increased financial pressure. There are people opting out because they are afraid of the consequences of staying on. It is important that proper structures be put in place to ensure the proper accounting and auditing procedures are adhered to. If a charity ceases to operate, any assets it has should come back to the State authorities. I am concerned about this matter.

It is interesting in respect of charities that when we draw down funding from EU level, there are very strict criteria as to how it should be used. I am not at all sure that we have the same level of accountability under our own structures. We need to examine this.

We need to examine issues that arise in respect of the Companies Registration Office. If a group registers a limited liability company and acquires charitable status three years later, what is the position? I am open to correction in my belief that there is no separate section in the Companies Registration Office to identify clearly all the companies that have charitable status. There should be. This would not take a considerable amount of work within the office.

We need to put in place a proper structure. I welcome this debate and the very constructive way in which it was organised. The sooner we put in place the structures intended in the original legislation, the better. While I acknowledge there are financial constraints, we cannot allow the situation to drift as it is doing. We need to put the structures in place at the earliest possible date. Doing so would have my full support.

1:50 pm

Photo of Denis O'DonovanDenis O'Donovan (Fianna Fail)
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I welcome this debate. I thank Senator O'Brien, Senator Mac Conghail and the Independent group for making it possible. The Minister will be glad I am not going to throw any barbs at him. I welcome him to the House. I support the Bill and will not crow about the fact that my party brought in the original Bill in 2009. It is still not fully implemented.

I will use a few minutes to explain my knowledge of charities. Some Senators and some in the Visitors' Gallery may have heard of a charity called Féileacán, which is the Irish for "butterfly". I am embarking on a 13-mile walk next Sunday to raise funds for that charity. Today, primarily through Members of this House from all sides, I have gathered the bones of €800. It is very apt, for a couple of reasons. I will tell a little story to outline why. On 4 December last, at the Rotunda Hospital, my daughter-in-law was attending for what we believed was a very minor procedure. When I was entering this Chamber at about 9.15 a.m., I received a telephone call stating her life was in danger and that she was dying. She was pregnant with twin girls. I rushed over to be with her. At that time, the staff in the hospital had to intervene to save her life and, in doing so, she lost her twin girls. This is a true story.

Until that time, I had never heard of the organisation called Féileacán, which is a registered charity. I was totally taken by the support it gave, not only to my daughter-in-law but also to my son, and the way it managed the situation afterwards. My daughter-in-law was in hospital for a number of days because of the threat to her life. I am sincerely grateful to the staff at the hospital for saving my daughter-in-law's life, as are we all. She has another little girl to live for. She asked me whether I would do the walk next Sunday for Féileacán. The walk is known as the Bay Run and is from Glengarriff to Bantry. Unfortunately, because of my physique, age and lack of fitness, I will not be running, but I will certainly be walking.

My story indicates the purpose of charities. I walked earlier this year in the Skibbereen area for a cancer charity. Charities do tremendous work. I support what other speakers said in this regard. There is a small minority of charities that muddy the waters and do damage to the very foundation of Irish hospitality and generosity towards charities.

I acknowledge that the Government is not tabling an amendment to this motion. In some small way, my little story will indicate what charities are. I must confess I had never heard of Féileacán before 4 December last year. I am very glad to be in a position to walk for the charity. My sons, who are obviously a lot younger than me, are running. The walk will be my little gesture towards charities.

What I describe indicates the depth of feeling for various charities. Féileacán is probably not very well known but there are other charities that are very well known and also doing tremendous work. I acknowledge the tremendous generosity of the Irish people. Somebody suggested a turnover of €4 billion. There should be transparency and proper regulation, and I am sure the Minister will ensure this develops during his tenure.

Photo of Alan ShatterAlan Shatter (Dublin South, Fine Gael)
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I thank those who tabled this motion. It is an important one. As we discuss and debate these issues and travel the road of putting in place what I hope will be a regulatory system, it is right that we ensure transparency in what we are doing.

I am, of course, very familiar with the Jack & Jill Children's Foundation. I met Senator O'Brien's husband, Mr. Jonathan Irwin, before I met her. It was quite a number of years ago. The charity does extraordinary and very difficult work with families who are often traumatised. It is work of great value.

I was particularly moved to hear Senator O'Donovan's experience. I wish his daughter-in-law well and hope she has recovered from what must have been a dreadful trauma in her life. I confess that I would enjoy seeing him try to run the distance but I know I would not survive beyond 1 km either. We could both have fun in that context. I wish the Senator well over the weekend and hope the rain keeps away.

I felt I should attach some importance to this motion rather than just giving a brief reply. I felt I should say something in detail about charities, our intentions and those engaged in charitable work. Charitable work, as everyone acknowledges, is extremely important across many sectors of society. When one thinks of the many diverse areas in which charities are active, encompassing health and social care, education, youth and community work, environmental and animal welfare protection and arts and culture, to name but a few, it is clear to one that "charitable work" can mean many different things to different people and its value can be realised in many different ways. We have extraordinary diversity in our charitable organisations, ranging from highly professionalised charity companies with multi-million-euro annual turnovers to small local groups made up of volunteers, and everything in between.

Some charities rely heavily on public funding and may deliver services on behalf of the State. Others depend on private donations or commercial activities, and many more on combinations of these.

With such diversity of work, size, structure and income sources, one might wonder how meaningful it is to think in terms of a single charity sector at all. However, that would be to ignore the critical common factor that all charities share, the primacy of the charitable purpose or objective. Charities exist to advance the charitable purpose for which they were established and to deliver the public benefit that their charitable purpose entails. This sets them apart from all other forms of enterprise and gives them a unique responsibility and a unique and valued place in the fabric of our economy and society. For the most part, charities discharge this unique responsibility ably and effectively, and meet the high expectations we have of them and they have of themselves with energy, creativity and integrity. I am well aware that charities in Ireland today are facing and overcoming many challenges daily as they adapt to reduced income and increased demand for services. I commend the dedication of the workers and volunteers involved and I welcome those who are present today in the Gallery.

Levels of public trust and confidence in charities in Ireland are consistently found to be high, and rightly so. Trust is essential to charities - the trust both of their donors and volunteers and of their beneficiaries. The public needs to feel sure that the hard-earned money it so generously donates to charities is spent wisely and with care and goes to help those who need it the most. Charities work hard to foster and protect this trust. The public also needs to know that when it donates food, clothing or other items to charities it is distributed or disposed of in a manner that benefits those intended. Of course, no sector of this size is characterised by uninterrupted good practice. As illustrated by the recently broadcast revelations about the charity clothes recycling business, there is always a risk of the public being misled or insufficiently informed. There is also a risk of malpractice or abuse of charitable status through deception, or of others, through criminal activity, benefiting from charitable donations. Unfortunately, when this occurs in one area it can damage trust more widely, leading to adverse impacts on charities that are fully transparent and are run effectively and efficiently and that have, in fact, invested much time and effort in ensuring high standards in their work and accountancy practices.

Recognition that public trust and confidence in charities was a precious commodity that needed to be proactively supported and enhanced was, perhaps, the primary motivation for the introduction of the Charities Act, which had all-party support when it was introduced. It was passed with cross-party support in 2009. This Government remains committed to these objectives. The measures contained in the Act to put in place a dedicated system for the regulation of charities are designed to enhance trust and confidence in the sector in a number of ways.

Increased transparency is one important part of the overall approach. In addition to establishing a public register of all charities, the system of regulation will, in time, result in the public availability of an annual activity report for each registered charily. Of course, many charities already publish annual reports and there is much good practice throughout the sector with respect to information disclosure. I encourage all charities to adopt a transparent approach and make available such information as would help potential donors to make informed choices and have confidence that their donations are being used as intended. Such measures, when placed on a statutory footing through the bringing into force of the relevant sections of the Charities Act, will also help to align arrangements for the oversight of the charity sector here with the recommendations of the international Financial Action Task Force. This inter-governmental body has a remit to promote effective measures against money-laundering and terrorist financing and has identified the global non-profit sector as particularly vulnerable to abuse for the financing of terrorism. Putting in place a dedicated charities regulator in line with the requirements of the Charities Act will strengthen the oversight of the sector here in Ireland. Very few people in this State would associate charities with terrorism and the possibility of laundering funds. This is one of the classic illustrative reasons that international bodies engaged in philanthropy also wish to ensure full transparency.

It was particularly disappointing to learn in the House this afternoon that there are charities in the State which had the possibility of being funded through international philanthropy but which, as a consequence of their poor accountancy practices, were unable receive the funding that was on offer. Ultimately, it is not funding simply for the charity but for the individuals on whose behalf the charity is working. Bad practices in the areas of accountancy and transparency mean there is less available for those who are in need and whom the charity was created to assist.

Increased transparency is just one, albeit very important, element of the regulatory framework provided for under the Charities Act. The charities regulatory authority to be established will have a range of functions and powers that will facilitate the development over time of a comprehensive and balanced system of regulation. In addition to the initial task of developing and maintaining a register of charities, these will include advisory, monitoring, investigative and enforcement functions, as well as the granting of charitable status to eligible organisations. This system of regulation will be new to all of us. It is important that charities are supported in meeting their new obligations under the Charities Act when they come into force and that the regulatory requirements are applied across the sector in a manner that is proportionate and sensitive to the different situations of different charities. By maintaining the consultative approach that we have adopted throughout this process, I am confident that this can be achieved.

Notwithstanding this clear rationale for proceeding with the implementation of the Act, it is also important to remind the House that there is already in existence a broad range of regulatory oversight measures that can apply to charities. Many charities are already subject to scrutiny by various State bodies in cases in which they receive State funding. Many charities receive significant levels of Government funding through grants, contracts for service delivery and so forth. As regards how they use and account for these public funds, these charities are subject to the oversight of the relevant grant-making or contracting Departments and agencies and, where appropriate, the Office of the Comptroller and Auditor General. The Revenue Commissioners have granted charitable tax exemptions to almost 8,000 charities and have significant powers to ensure that such charities comply with tax law. A full list of these charities is available to the public on the Revenue Commissioners website. Many charities are companies limited by guarantee, as was mentioned by Senator Colm Burke, and, as such, are also subject to the provisions of company law and are generally required to provide certain information to the Companies Registration Office under the Companies Acts. This information can be accessed by the public. Such charities would also potentially be subject to scrutiny by the Office of the Director of Corporate Enforcement. Charities that take the form of a trust are subject to the provisions of trust law. Of course, any business entity is subject to general criminal and fraud legislation.

While the Government remains committed to progressing the implementation of the Charities Act and the dedicated regulatory framework that it will usher in for charities, it is also important to recognise that the charities sector is at present far from unregulated. To suggest it is would be misleading and would fail to acknowledge the value of the effort invested by many charities in meeting existing regulatory obligations.

Turning again to the new requirements that will come into force under the Charities Act, clearly the development of such a system of regulation will have resource implications. This has created an additional and significant challenge to the further implementation of the Charities Act at this time. As this House will be aware, following the transfer of responsibility for this legislation to my Department in mid-2011, I decided to defer further implementation of the Act and explore possible alternatives and low-cost variations on the course of action that had been designed before the economic downturn. Without prejudice to the issue of resources, Government policy with regard to the regulation of the charitable sector remains aligned with the provisions of the Act. With this in mind, my Department is now working to develop proposals for bringing key provisions of the Act into force on a phased and low-cost basis.

I will take this opportunity to say a little about what we have done so far and how we envisage the next steps. In January last, I published for consultation outline proposals for implementing key provisions of the Charities Act.

Stakeholder consultation has been a strong characteristic of this policy area for many years and we are fortunate to have an informed and engaged stakeholder community. Delays in the implementation of the Act had understandably led to some frustration on the part of active stakeholders and some frustration on my part as well. It was entirely due to the reduction in the resources available to my Department. It has perhaps led to some confusion in the charities sector and among the public on the position on charities regulation as well. I took the view it was important to consult with stakeholders on the approach now being considered to communicate clearly our intentions and to ensure that the implementation process is informed by the views and concerns of engaged stakeholders.

The consultation document invited views from stakeholders and members of the public on proposals for the establishment of a charities regulatory authority on a phased and low-cost basis. Views were also sought on issues connected with the creation of a statutory register of charities, including a proposal that some of the costs to the Exchequer of establishing and maintaining this register would be offset through the application of a modest annual registration fee to be set at a level proportionate to the income level of each registered charity. The consultation also invited views on the form and content of annual reports to be made by registered charities to the new authority. As these reports are to be made public by the authority for all publicly-funded charities, this is perhaps the key mechanism through which the transparency of the sector can truly be enhanced.

I was pleased with the response to the consultation. Some 160 written submissions were received and they are currently being reviewed in my Department. Following the consultation, we are also developing more detailed proposals for the establishment of a charities regulatory authority, including with respect to resourcing and a timeframe for implementation. This work is informed by the submissions received in the context of the consultation process. Once this work is complete, I hope to bring the proposals to Government, following which the consultation submissions will be published by my Department where consent has been given by the author - it is given in the majority of cases. At that time, I also hope to be able to give a firm indication of the process and timeframe for the establishment of the charities regulatory authority.

While this evening's debate is primarily focused on statutory provisions, I take this opportunity to remind the House of the important part that complementary voluntary approaches can play in enhancing public trust and confidence in the charitable sector. We should recall that the responsibility for enhancing the transparency and accountability rests primarily with charities. Voluntary, sector-driven approaches to better practice are an essential part of a strong and accountable charity sector. Statutory regulation is simply a complement to this, not an alternative. As progress is made on the implementation of the Act, so the Government also hopes to see a continued drive from within the sector for improvements in transparency and accountability where necessary.

As noted earlier, a particular issue in this regard was highlighted by the recently-broadcast investigation on charity clothes recycling. I imagine many Senators share my concern at the finding that allegedly, in certain cases, a small proportion of the potential income derived from clothing banks appeared to reach the charitable cause with which the bank was identified or associated. As Minister for Justice and Equality, I am keen to see greater transparency in agreements between charities and companies that own clothes recycling bins in order that the donor public know exactly what is happening with their donations and how much of what they donate is actually being used for the benefit of those whom the charity has been established to help. Of course the bringing into force of the reporting provisions of the Charities Act will support increased transparency. Anyway, donors should not have to wait for statutory regulation before charities tell them what is happening to their donations. Where charities are working together with the private sector in any shape or form and where there is a sharing of moneys as a result of particular activities between the charity and a business with which it is in partnership, it is important to have maximum transparency with regard to the arrangements in place. This gives public confidence to the work the charity is doing and some assurance that the majority of funds raised are truly benefiting those for whom they are donated. It is in the interests of the charities to be upfront about this and I hope we will see genuine leadership from the charities sector on this issue following the recent revelations.

I congratulate those in "Prime Time" and RTE for their careful investigative work in revealing and bringing to public attention the activities of an organised crime gang targeting clothing banks. Burglary, theft and all types of criminal activity are, of course, to be condemned, but there is something particularly nasty and callous in the actions of those who steal, for their own benefit, charitable donations intended to help those in genuine need. I have asked the Garda Commissioner for a report on the activities of gangs involved in this particularly cynical and despicable type of criminality and the action that can be taken to bring them to justice.

2:10 pm

Photo of Alan ShatterAlan Shatter (Dublin South, Fine Gael)
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Fundraising is another area in which sector-driven efforts to spread best practice can play an important part and the Government continues to support certain initiatives in this area, including the development and promotion of a statement of guiding principles for charitable fundraising that has been developed by the charities sector under the leadership of the voluntary charity umbrella body Irish Charities Tax Research. These guiding principles, at the core of which are respect, honesty and openness, aim to provide a set of agreed and accessible standards to charitable fundraising strategies and projects. My Department is providing grant support for this initiative. I have encouraged all charities to sign up and adhere to these principles, which represent a simple yet demonstrable commitment on the part of charities to better accountability and transparency. To date, although I have been pleased to see that sign-up by charities to the principles has been growing in recent months, unfortunately thus far only a relatively small number of charities have formally committed themselves to the principles and this is a matter of concern. Although there have been some additional commitments in recent months I see no reason the overwhelming majority of charities, if not all, should not make such a commitment. My Department continues to support this initiative with the aim of increasing the share of fundraising that conforms to these principles but such an initiative requires the support and participation of charities which are engaged in fundraising to be meaningful and I urge all charities that carry out fundraising to commit publicly to these best practice principles.

The motion before the House notes the link between effective regulation of the charities sector and the objectives of the forthcoming national giving campaign, which is one of several initiatives of the Forum for Philanthropy and Fundraising. Through this forum, Government is working with major philanthropic organisations and other stakeholders to unlock the potential of philanthropic giving in Ireland by creating a favourable environment for individual and corporate giving and developing fundraising capacity. The forum was re­convened in 2011 by my colleague, Deputy Phil Hogan, Minister for the Environment, Community and Local Government, and reported in May 2012. One of the recommendations of the forum was to create a national giving campaign aimed at increasing private giving, in particular planned giving, by 10% each year to 2016. It also aims to raise awareness and understanding of the value of philanthropy and planned giving among all sections of Irish society, including high net worth individuals, the corporate sector and the general public, by demonstrating how charitable and philanthropic giving benefits communities throughout the State. A thriving philanthropic and fundraising sector benefits greatly from the availability of readily accessible, good quality information on the non-profit organisations that it supports. Information on the income and activities of charities enables progress and developments within the field to be tracked and understood over time and useful international comparisons to be made. The gradual implementation of the Charities Act and in particular the measures relating to the compilation and publication of certain information on charities will contribute to this. In this way, progress on the implementation of the Act represents an important part of our efforts to create a favourable environment for philanthropy. The giving campaign will be launched later this year and it is envisaged that charities will be encouraged to launch their own campaigns under the umbrella of the national campaign.

I wish to note in particular the work of Senator Mary Ann O'Brien in this area. Senator O'Brien's paper on the implementation of the Charities Act that was published in February during the period of consultation conducted by my Department is a timely, constructive and helpful contribution to our discussion on this matter and to realising our goals. The current situation demands that we approach the task before us with creativity, flexibility and pragmatism and that our actions are informed and underpinned by continuous engagement with the charities sector and those who have a stake in it. Ongoing engagement is crucial in this regard. The active engagement of informed stakeholders such as Senator O'Brien will be critical to our efforts as we seek to put in place on a phased basis a dedicated system for the regulation of charities.

That was a particular issue raised by Senator O'Brien in her contribution. I agree entirely with her that there should be standard accounting practices for charities so there is a clear and understandable format and a clear provision of relevant and comprehensive information in a transparent way that the public understands.

Before closing, I would like to return briefly to the core issue before us, namely, the role played by charities in our society and how we can best support them in it. Charities, by definition, benefit communities through their work, and for this they are indeed worthy of our commendation and thanks, as expressed in tonight's motion. The provisions of the Charities Act are intended to help them to deliver this benefit with transparency, integrity and efficiency. This in turn can help the trust we have in our charities to grow and thrive so that we can contribute to them with confidence. It is in all our interests to have a strong and vibrant charity sector and I look forward to advancing the regulation of the sector in line with this overall objective. I welcome the support on all sides for the motion before the House and as Minister for Justice and Equality I have the greatest pleasure in expressing my full support for its content.

2:20 pm

Photo of Katherine ZapponeKatherine Zappone (Independent)
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I welcome the Minister to the House. I will begin where he concluded by commending my colleague, Senator O'Brien, for the extraordinary work she has done since she was appointed and her passion for this area. I also thank those who worked with her so ably and many of the great representatives of the sector, who are in the Gallery, and those who have worked and continue to work hard to support the sector and our work in trying to get movement on these issues.

Every once in a while I whispered to my colleagues in the Chamber as the Minister gave his speech. It was a great, fulsome, thoughtful, comprehensive and heartening speech. I hope it was heartening for those who have participated in the sector and those who continue to do so. The speech contained a lot of information. I assure him that I and others in the sector will quote it and take it as a heartening response to what we are discussing, namely, his efforts to define charity and the consultative process. He will bring forward proposals on the provisions to implement the Act on a phased and low-cost basis.

He went beyond the issues we are discussing in his conclusion, in terms of voluntary measures. I thank him, and congratulate him and those who support him. The speech and the willingness of the Minister to engage with us in that way is a great and ongoing response to the motion tabled by our group, led by Senator Mac Conghail, on having a national debate on the current context of the not-for-profit sector.

I am sure many people looked closely at the motion, in particular our last bullet point. Some might have said we did not set the bar too high because we mentioned we looked forward to the publication of the outcome of the Minister's consultation, and further information regarding his timeframe for introducing the charities regulator and the full implementation of the Act. We are reasonable people and expected a reasonable response, and we got one. We set the bar just right.

The Minister indicated to us his awareness that this is a win-win situation for him, his Department and the Government, in terms of what we sought. There are costs, as he indicated. He mentioned the establishment of the regulator and the implementation of the Charities Act, and that he needed to investigate that. He also referred to doing things at a low cost, with which I agree. If the costs are low the benefits can be high. There are benefits to philanthropy. In our earlier motion and the Seanad Public Consultation Committee which examined social entrepreneurship, we found there are major benefits to the establishment and implementation of the Act because it encourages the development of the philanthropic sector, something we need desperately.

There are significant benefits for charities in continuing to partner with the public sector and, as the Minister, my colleagues and others have said, that increases confidence in the sector, something which is needed. We should move forward with great urgency to do the work he laid out.

The Minister is a man with great ambition. I have noticed and complimented him on much of the legislation he introduced. The Government has also introduced a lot of legislation within a very short time. I refer to personal insolvency, governance, regulating the banks, dissolving the IBRC and the referendum on the fiscal stability treaty. Much legislation refers to the economic arena. The Charities Act concerns the social arena. As we have said, if one moves with urgency in the social arena it is of benefit to the economic arena, and he has a sense of that.

The motion urges speed. I welcome the consultative approach of the Minister. I do not think it is a smokescreen for slowing things down. I heard how he will move forward. He has had consultation, which was a great opportunity for Senator O'Brien to outline a great piece of research, and many colleagues fed into the process.

In the 30 years I have lived in this country I have established two charities, worked as a CEO for a non-profit organisations and raised millions of euro. If the Minister wants people like me and our philanthropic colleagues to keep going, he should give us a lift. He is doing that and we await with hope and great expectations his forthcoming invitation.

Photo of John WhelanJohn Whelan (Labour)
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I welcome the Minister to the House and commend him. On the first day of summer there is a great deal of warmth in the room and I would like to continue in that vein. The Minister has embraced the motion, not just in letter but in spirit. I also commend my colleagues in the Independent Group. Senator O'Brien has championed the issue, with other colleagues in the Independent Group. To an extent, we are all singing from the same hymn sheet. I do not think anyone doubts the bona fides and good intent of the Minister. It is great to see cross-party support for what is at stake.

Before we get carried away, it should be noted the Charities Act was passed by Parliament in 2009. The words I live in dread of in the Chamber are "shortly", "imminently" and "soon", but I am not saying that applies in this case. One never knows what timeframe is involved. On 19 September 2012, I introduced a similar motion calling for the full implementation of the Charities Act and for the appointment and establishment of the office of the regulator.

To be fair, at that time it received wholehearted, warm, cross-party support, but that was nine months ago. Albeit that there has been consultation since, and that is important, at that time there was some nervousness about it. Nobody at any stage is casting aspersions or doubts on the integrity and honesty of the 8,000 charities that have access to €4 billion in State funding and an estimated additional €4 billion in charitable donations and contributions, which is more than half the budget of the Department of Health. We know the scrutiny that is required to ensure the taxpayer and communities get value for money and that the money is going where it is most needed, to the client at the coalface.

As Senator Donovan pointed out in his moving contribution, everybody in the room has their favourite charities and work. We can only commend the work of the Irish Cancer Society, the Irish Hospice Foundation, the Irish Wheelchair Association and the myriad suicide support groups in the current climate around the country. This morning coming to work I saw the lifeboat volunteers out with their May Day collection. I thought it was very clever word play and very appropriate. If anyone is going home this sunny evening they should keep the collectors in mind. I am sure they are out and about.

The charity sector relies on its credibility and reputation. By and large we are very lucky in this country to have such commendable people. It is a vibrant, robust and vigorous sector, and without that voluntary charitable sector there would be a horrendous void in Irish society that the State could not meet or match. We would be left stranded in so many areas. Therefore, it is vital that the important but limited funding available is being put to best use. Let us not cod ourselves. There are unscrupulous people out there, present company excluded. Those who have put their best foot forward are clamouring for the implementation of the Act. They have been imploring the Government to get on with it. Charities here have been embracing the consultation process. We can no longer say there is a cost or a structural impediment that prevents us getting on with it. Too much is at stake, not only the money but the valuable work.

We have seen time and again that there are those who will take advantage when advantage is there to be taken. They will exploit any gaps and loopholes. There are cases of excessive commission, where the money is being stripped out and is not going to the people for whom it is intended. There are charities that are not transparent in their actions, payment systems and processes. It is hard to believe that they are even ripping off the clothing banks. This is something a charity regulatory office would bring to an end. We should have a league table of best practice so people would know the charities that are behaving and conforming to best practice and those that are putting the money to best use. We have a certain amount of duplication and overlap in the sector. That is not good for anyone, certainly not for the children and those in need of diminishing resources.

I commend the Minister of State, Deputy Jan O'Sullivan, and welcome her to the House to continue the discussion. I commend her for taking the implementation of the Charities Act in a gradual fashion so far, but we are four years down the line. The Labour Party group brought forward a similar motion. I commend the Independent Group which not only brought forward the problems or challenges but came up with solutions, which is to be commended. Our motion dates back nine months and I would like to see the consultation brought to a successful conclusion and us to move robustly and promptly into the implementation phase.

2:30 pm

Photo of Feargal QuinnFeargal Quinn (Independent)
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The Minister of State, Deputy Jan O'Sullivan, is very welcome. It is a very good day for the Seanad when Senator Mary Ann O'Brien and the Independent Group put down a motion to which the Minister responds. We are so used to motions coming in here and the Government putting in an amendment disagreeing entirely with it. It is delightful to see this and I congratulate the Independent Group and Senator Mary Ann O'Brien for doing this. One of the frustrations we have in everything we do here is the length of time it takes to get things done. Senator Whelan touched on the fact that it was in 2009 that the Charities Act was passed here, and yet we have not really got around to doing what needs to be done. We can and should do it immediately. The Minister's heart is in the right place so I am sure it will happen this time, but let us ensure it happens with speed.

I am glad to contribute to this motion and I will briefly mention a topic relating to the more efficient regulation of the not-for-profit sector with regard to philanthropy, fund-raising, sponsorship and private giving in Ireland. By doing so we could really increase the amount of revenue charities can raise. I also agree we should put in place a charities regulator. I am delighted to see the Minister intends to move on that but it is taking a long time. The fact that Ireland is almost unique in that it does not have a regulator for charities is indicative of the work the Seanad can do. We can draw attention to such areas. A charity register is also a good idea. I like the description on the UK Charities Commission website which states:

The (UK) register of charities shows key facts about the work and finances of every charity. You can see at a glance whether a charity is up-to-date with its reports and its accounts.
That information is good for the customer, and by customer I mean those who contribute to the charity as well as those who receive from the charity. We need a similar system here. Transparency in charities can help increase much-needed revenue that has been falling, particularly since the crisis.

Given that the State gives so much money to these charities there needs to be much more impetus on the side of Government Departments to audit the accounts of charities. This would also look at charities from a business-oriented perspective to analyse their efficiency in reaching their targets. We need to know the impact - it is a great word - of a charity's work. We need to look at a charity's work more like the way we look at a business in the private sector and how a business would measure itself. At the same time, the private sector and the non-profit sector can also play a role in making charities more transparent and efficient.

The situation in other countries is very much worth noting and the Internet is also widely used to better inform the consumer, meaning those who contribute to the charity as well as those who receive from it. In the US there are websites such as the one by the non-profit organization, Charity Navigator. It is a very interesting website which evaluates US charities, rating them on a zero to four scale. Could we have a similar system operating here? It really provides an in-depth analysis to the customer - the person who is donating. This kind of charity rating is very worthwhile.

In terms of overall salaries - and we have touched on this a little here - of CEOs of charities, there is more murkiness. In particular, there was a report last year that four charities that share millions of euro in State funding every year have refused to reveal how much their chief executives are paid. While more transparency will hopefully mean more donations in the long term, some charities simply have to get away from the murkiness that surrounds them. It is in their own interests to do it. The press, others and we here can help by spotlighting those charities.

I would also briefly like to mention the topic of crowd-funding related to charities. Linked Finance, an organisation in which I must state my involvement, aims to crowd fund SMEs and larger businesses. There are other charity crowd-funding websites in Ireland. This is the future but I think the Government needs perhaps to examine the area more to ensure the right conditions are being set, in that consumers have the knowledge and confidence to invest in certain worthy projects. By introducing some safeguards, the Government can allow the sector to grow which is what it should be doing.

Unfortunately, and to generalise, sometimes older politicians overlook such developments, as it is in their nature, but I guarantee legislation will be introduced on this matter, as has been done in the US and the UK already. I hope we do not do it five or ten years late and then pat ourselves on the back. As much as many Senators and Deputies would not like to hear this, we could do a lot worse than following UK legislation much more closely instead of pretending we were the first to do something. The opposite is often true. Consider the fact that the US passed the Jumpstart Our Business Startups Act 2012, known as the JOBS Act, last year, which made equity-based crowd funding legal. Its effect was to ease entrepreneurs' access to capital via the Internet. The US believes this could raise hundreds of millions of dollars and create thousands of businesses. What if we were to do something similar in Ireland? This would be an example of community ownership.

I have raised previously the example of DonorsChoose.org, a website that allows people to give to projects in American schools. We recognise the significant amount of philanthropy that takes place in America because they have made it easy to do so. However, we have made it difficult here in recent times. We must take steps now to encourage more philanthropy.

I am delighted this motion was tabled and even more delighted that it was responded to by the Minister. I wish the Independent Group and Senator Mary Ann O'Brien every success in this area. I believe the Minister will respond to the motion and I urge that this happen immediately.

2:40 pm

Photo of Eamonn CoghlanEamonn Coghlan (Independent)
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The Minister of State is welcome to the House. In my sport, they would say she is taking up the baton for the Minister for Justice and Equality, Deputy Shatter. I commend Senator Mary Ann O’Brien on this motion, as it is most important to keep pressure on the Government to fully implement the Charities Act 2009.

I have spent 30 years working with the Children’s Medical and Research Foundation in Our Lady's Children's Hospital, Crumlin, first as a volunteer when I lived in the United States and then, on my return to Ireland in 1990, as a marketing and communications executive. In the latter decade of my professional working life there, I was director of fundraising and development. Many people used to think I just lent my pretty face - or celebrity status, if one wishes to call it that - towards raising funds for Crumlin. I was in fact there in a professional capacity, working on the front line with many thousands of volunteers.

Photo of Martin ConwayMartin Conway (Fine Gael)
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The Senator is much more than a pretty face.

Photo of Eamonn CoghlanEamonn Coghlan (Independent)
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As the Minister said, he met Mr. Jonathan Irwin long before he met Senator Mary Ann O’Brien. I met Mr. Irwin when he came to Crumlin when young Jack was a patient there and was appalled by the services available then. Fair play to Mr. Irwin for establishing the Jack & Jill Foundation afterwards.

Having worked with thousands of volunteers raising funds through golf matches, cycling events, marathons and triathlons in the corporate sector and through schools and community groups, I know we spent a lot of time policing what was happening in the area. People would come to us proposing that they sell clothes in the name of Crumlin hospital. We even had a company propose selling tyres while using the name of the hospital as a benefit to itself. We found that only 10% of the funds raised in parachute jumps were going to the charity. We had to get rid of those organising it and tell them they were not welcome. We even had farmers with a fund-raising idea of splitting up a field into a grid and running a sweep on guessing where the cow’s call of nature would land. One can guess where we told them to go.

It is not the staff in our fundraising office who get the credit but the volunteers. It was the volunteers who built the new medical tower at the hospital for €15 million. It was the volunteers who provided life-saving equipment for the children. To this day, it is the volunteers who support the world-renowned research that goes on at the research centre. Up to 120,000 children go through the hospital every year. While we wait for the new paediatric hospital to be built, which will probably take 20 years, we still need to fix Crumlin. Accordingly, we badly need the support of the voluntary sector to do that.

The Charities Act was signed into law in 2009 but it has not yet been enacted and only some sections have commenced. This is a shame, as the debate on this sector has been going on for ten years. We have heard that up to 7,000 charities are registered. From my information, however, there are 17,000 charities operating. It is becoming exceptionally difficult to control the well-intentioned individuals and groups who want to raise funds. They feel they can just set up shop and go about raising funds without any rules, regulations or guidelines.

The Children’s Medical and Research Foundation in Crumlin is the leading charity in Ireland. First, everyone knows its brand. There is not a family or a household who do not know some child who has attended the hospital. Second, it has implemented corporate governance and compliance for 40 years. As Senator Mac Conghail and the Minister stated, people trust the charity work done by Crumlin. The strong board and leadership, with volunteer businessmen and women from industry and the medical field, ensure that everything is transparent and in order.

I welcome the first corporate governance code for community, voluntary and charitable organisations, launched last June by the Ombudsman, Ms Emily O’Reilly. However, it is not mandatory and it is disappointing to note that not many organisations have adopted it to date. At the launch, Ms O’Reilly stated: "Good governance is not some sort of mildly irritating optional extra in the conduct of our public affairs but is rather the pivot around which everything turns and which ultimately determines the success or failure of our enterprises." This includes charitable organisations. Unfortunately, it is the fly-by-night organisations, the bogus individuals purportedly collecting for good causes which bring down the reputation and good name of genuine charitable organisations, damaging the trust enjoyed by them. This can be only be stopped by establishing the charities regulatory authority. It was indicated earlier that lack of funding is the main reason it has not yet been set up. We cannot use this as an excuse. The authority must be up and running soon. While the Minister said it will be in time, time is running out. We owe it to the volunteers, donors and beneficiaries to have this sector regulated.

Photo of Labhrás Ó MurchúLabhrás Ó Murchú (Fianna Fail)
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I welcome this motion from the Independent Senators. I compliment Senator Mary Ann O’Brien on her research and diligence in this regard. If that diligence had not been applied, this matter would not have been addressed with any sense of urgency. That is a sad commentary on ourselves as legislators. I cannot think of any motion that is more important for debate in this House than this one. We are speaking on behalf of people who have not been given the same opportunities in life as we have.

But for the charities that exist, the responsibility would fall back on the State. It would be the role of the State to look after its citizens. The charities fill that role, often with a huge voluntary input. This is not just about money; it is also about providing a voice for these people when different pieces of legislation come up in the Oireachtas. People must always come forward and make cases for people who are more vulnerable than ourselves. This is an important role, particularly for us as legislators. However, the responsibility rests on the State.

We know that even in the best of times the State would not fulfil that role fully, and there is very little chance at present, with the economic climate that exists, that the State could have any intention whatsoever of fulfilling that role. The charities sector is vital to the welfare of thousands of people and we need it operating to the fullest capacity and with the fullest trust and confidence of the people who support the charities. The sector must be protected. I recall the sense of urgency that existed when the Charities Act was enacted in 2009. Everybody realised it was needed, but perhaps it came about because of newspaper headlines. Often the headlines do not represent in the fullest way what the charity sector is about, but because those headlines appeared in the newspapers, it was felt we had to take action. It should not have been necessary to wait for something of that kind to initiate action.

Everybody knew for years that proper regulation of the charities sector was necessary. It was evident to people in the street, particularly where money was changing hands in a manner that was not receipted and was collected by people we did not know. Take the clothing industry as an example. When people are asked to give their clothes to a particular organisation, they still do not know whether this will bring a financial gain for that organisation or whether the moneys received go to a charity. This is just one small example of the confusion that still exists. When people contribute money on the street outside a bank or a shop, some little alarm bell always sounds in their heads with regard to whether that money ends up in the right place. This is only a small element of the total picture.

The one way to ensure that nothing untoward happened was through regulation. We have a comprehensive Act now and it covers all the issues in significant detail. In addition, it covers what would strengthen the charities sector and help the legitimate part of that sector. This is itemised step by step in the Act. People were given the opportunity, through debate, to feed in their experiences and their practical understanding of what was involved. They were also able to include their vision for the charities sector. We can imagine how they must feel now we are told, four years later, that one of the reasons the provisions have not been implemented is their cost. This is sad, because the idea behind the concept was to save money and ensure the moneys available from generous-hearted people are available to help others for whom the State has responsibility. That is the logic of what we are saying.

It is wrong and unfair that the Act has not been implemented. I would be first to stand up and defend the Government with regard to many of the austerity measures it must take, because we must be realistic. However, in this case, austerity is self-defeating. For that reason, I hope the Minister and Minister of State will avail of this opportunity to bring the message to the Government that we still hope this regulation will not have to wait and that the benefits of bringing in the regulation and implementing the Act far outweigh what might be saved.

2:50 pm

Photo of Jillian van TurnhoutJillian van Turnhout (Independent)
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We are having a very good debate on this and we could say we are all in agreement and that the word on this is "consensus". However, knowing Senator O'Brien as I do, I feel she would like the word to be "urgency" and to feel we are bringing an entrepreneurial spirit to this motion. It is good that we have consensus, but is that good enough? It is not, and that is the reason Senator O'Brien has used precious Private Members' time to raise this issue. There was consensus among our group that this was such an important issue that we should try to nudge and drive the process further along. I acknowledge the work Senator Mary Ann O'Brien has done to champion the issue of the implementation of the Charities Act.

As a volunteer with the Girl Guides and having been chief executive of the Children's Rights Alliance, I speak from personal experience of the charities sector. I was working with the alliance coming up to the Charities Act and during the debate on the Bill on what needed to be done. We had to consider whether our organisation would be prepared and ready for that Act. Our organisation and many others prepared themselves and worked to ensure they reached the highest standards. We double-checked everything we did and examined our financial reporting and so on. However, the issue is that we still do not quite know what the implementation of the Charities Act will mean for financial reporting. Therefore, we look to the UK to see its models of good practice and the accounting standards used there. When it comes to compliance, charities here are working in a vacuum with regard to the standard that will apply here. How can they say they are reaching the best standard when there are potentially different ways in which the Act will be implemented? However, we want to ensure we are fully compliant.

With regard to donations received, we do not know how these are to be declared. The public want to know this, but the organisations want to know also, so they can ensure they have the required systems in place. Every organisation produces an annual report and in our role as Senators we receive quite a number of annual reports. However, often, when I look at the annual reports of well-known charities, I notice they do not necessarily report against the objectives of their organisation. We get reports of activities and of what they are doing, but the Charities Act talks about the objectives of the organisation. Therefore, reports should be written against those objectives.

We have all cited good examples of charities, but we must be careful that we do not confuse charities with the not-for-profit sector. Sometimes, the same organisation can be both a charity and a not-for-profit organisation. However, some organisations have chosen to work as limited companies in the not-for-profit sector. What we are talking about today is the "charity" brand and what that means. We know some charities will adopt the regulations early, and nobody has a difficulty with that. However, in the next wave of organisations to be looked at by the regulator, how will the public know which organisations are fulfilling the Charities Act and which are not?

Senator Ó Murchú spoke about people collecting outside shops or banks. I have sometimes looked at the names of the organisations collecting in that manner and have never heard of them previously. I wonder then how I can know if the collector is collecting money legitimately or whether the money collected will go to the charity. I would like to know that 100% of the money collected in such bucket collections goes to the charity. I want to know when I give my money that it will all go to the charity, not that just 10% will go to it. There is an issue with regard to public trust and confidence in the brand or charity.

That is about fundraising, but it is also about getting volunteers involved with an organisation. We need to look at the resources a charity has to hand. Those who will be supporters in many ways would support and help organisations, but they need to know that it is correct.

We have given examples of where organisations apply good practice and the difficulty is how one compares them. Unless we have a standard formula for how organisations report and show their financial information, both expenditure and income, how will we be able to compare organisations and the level of funding? This is a bigger question for the State. It astounds me that Departments, when allocating funding, have no idea what other Departments give funding to an organisation. Other than going to the Companies Office and requesting the organisation's accounts, it is often difficult for them to know. Even if one wants to look at the good use of public money, that would be an issue.

I fully support the motion from our group which is being led by Senator Mary Ann O'Brien. As I said, she is an entrepreneur and knows all about branding. For me, this is one of the reasons we need to ensure the charity name stands for something. We have heard too many stories, even in recent weeks, where that brand has been damaged. We need to ensure there is clarity about the implications of the Charities Act and when it is being implemented. We all want to see an operational charities regulator. As I said, I would prefer it if the word "urgency" was included, with "consensus", in the motion.

3:00 pm

Photo of Martin ConwayMartin Conway (Fine Gael)
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I welcome the Minister of State, Deputy Jan O'Sullivan, who is witnessing a very interesting and stimulating debate. In fact, I would not call it a debate but a discussion. In many ways, it is a pity the Minister for Justice and Equality, Deputy Alan Shatter, could not find the two hours in his schedule to listen to all of the contributions because those speaking in this House speak with enormous credibility on this issue. I look across at Senator Labhrás Ó Murchú and consider the voluntary work he has done for 40 years, as well as the very valuable work Senator John Crown is doing with his cancer research charity. Of course, Senators Jillian van Turnhout, Katherine Zappone and Mary Ann O'Brien also bring a wealth of experience to voluntary and charitable work. The House has enormous credibility in this regard.

Like many others, I was very troubled by what I saw on the "Prime Time Investigates" programme on the systematic raiding of charity clothes bins throughout the country. One criminal gang is making serious money and in one seven day period robbed 800 clothes bins and exported multiple 40 ft. container loads of clothes. In donating their clothes people sincerely believe they are going to help the underprivileged. Many of the clothes donated could have remained within their families, but they felt the right thing to do was to donate them because of the added value they brought to charities.

I commend the previous Government for the 2009 Charities Act. At the time it was going through the Houses, I remember following it with great interest because it was badly needed. We all see church gate collections and even that old concept is one I believe needs to be tightened, as do other bucket collections. When one sees the name and number of a charity, one should be able to check with ease whether it is bona fide without this being cumbersome or difficult. The pending introduction of the register of charities is overdue and I agree with Senator Labhrás Ó Murchú that it will save money in the long run. It will save the money of hard-pressed citizens who are contributing money that, in many cases, they could do with keeping themselves but, because of the generous nature of the society in which we live, they instead donate to people they believe are in greater need. There is a need for accountability and transparency, particularly as we are a modern society which considers it does its business in an up-front and appropriate way.

If one was to try to compare the charity world in terms of the absolute accountability rightly expected in the world of politics, unfortunately, one does not mirror the other. There is much greater accountability and transparency in politics than within the charities sector. This time last year the HSE requested that charities which it was co-funding declare the bonuses paid to their chief executives, but they refused to so because the bonuses were paid from charitable contributions. However, the money is still coming from the same people - the people of Ireland - whether by way of taxes or charitable contributions. I firmly believe we need far more transparent accounting within the charities structure. What the chief executives of registered charities are being paid in salaries, bonuses, expenses, pension contributions and perks should be freely available information. It is expected in public bodies and politics and should also be expected in charities. These are not private individuals, corporations or sole traders. They are de facto public servants because they are being funded by the public. It makes absolute sense that this should happen.

To be frank, it is regrettable that vast swathes of the Charities Act have not been implemented to date. I commend the Minister's bona fides in coming into the House and not opposing what I consider to be a very impressive motion. However, we need a timeframe. I welcome the commitments made. I do not believe resources are really an issue because this will save money and, therefore, it is an investment - it is giving with one hand and getting back from two. We are a generous nation and, per head of population, probably give more than people in any other country. I point to the many missionaries from this country who have gone abroad for many decades and the tireless and very generous contribution they have made to the Third World, as well as the many millions of euro sent from this country to the Third World. The people of Ireland would certainly regard it as money well spent if the various elements of the Charities Act were implemented.

I genuinely salute the great voluntary and charitable efforts being made by the various Members of the House. They do it proud in what they do.

Photo of David CullinaneDavid Cullinane (Sinn Fein)
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I commend Senator Mary Ann O'Brien and the Independent Senators for again tabling a motion on this issue. It is only a short number of weeks since we had a similar debate in the House. The Senators who tabled the motion might recall that at the time my party and I tabled an amendment to their substantive motion. At their urging, we decided not to press the amendment because I understood the logic of what they were trying to do, which was to get the Government over the line on a specific issue in the implementation of the Charities Act. That was very laudable, but I have to restate the premise of our amendment, on which Senator Labhrás Ó Murchú touched somewhat in regard to the obligations of the State. The State has an obligation to make sure the basic needs of citizens are met and that people are cared for from the cradle to the grave. Putting food on the table, making sure children are properly clothed and that people have enough income, for example, to heat their homes and keep them running, pay utility and other bills and gain access to education are basic requirements that should be met.

The reality is that many of the austerity policies put in place by this and the previous Government which primarily impact on the most vulnerable in society and low income families will result in more and more families and individuals depending on charities to put food on the table and heating oil in their tanks, send their children to school, put clothes on the backs of their children and even pay their mortgages and basic utility bills. That is the reality for any of us dealing with people on a daily basis in our communities. We know that is a fact. When they come into our offices and clinics, they are increasingly saying they are going to charities such as the Society of St. Vincent de Paul or the Simon Community. Unfortunately, more and more people are depending on charities because the State is failing to meet their requirements. It would be remiss of me, as somebody who gladly represents people who are being left behind, not to make that point.

I appreciate the sentiments expressed in the motion and the logic of what the Independent Senators are trying to do. I also fully support implementation of the Charities Act. The motion references the report drafted by Senator Mary Ann O'Brien. I have read it a number of times because it is an excellent report and the Senator has done the House a service by drafting it. I have found it to be excellent and of very high quality. In the foreward she says we need to sit back and reflect on how so many Irish charities prop up the State in the provision of vital services in areas in which the State has been found wanting. That is essentially the point we were making in the previous amendment and I concur entirely.

I have long supported the need to ensure charities are well regulated and very much welcome the 2009 Act and commend the previous Government for introducing it. Deputies Jonathan O'Brien and Pádraig Mac Lochlainn, the Sinn Féin spokespersons on this issue, on several occasions in the Lower House have queried the reason we have not implementation of the Act. We seek to amend it to allow human rights promotion as a charitable ground, but perhaps that is an issue for another day. The legislation needs to be implemented. I appreciate Senator Mary Ann O'Brien's argument that there are financial restrictions on what can be achieved, but this should not be used to delay or halt implementation of the Act. There is clear agreement in the House across the political divide among all parties and none that this should happen.

Senator Mary Ann O'Brien's report also notes that those Irish charities regulated by the Companies Act and limited by guarantee are obliged to publish their financial statements and that in so doing the application of the statement of recommended practice, SORP, is entirely voluntary and adopted by some charities as best practice. According to a recent survey, 20% have adopted the SORP, while 20% are in the process of adopting it or plan to adopt it soon. However, 60% have no plans to adopt it. That underpins the importance of the motion.

I commend the Minister for making a very good contribution and the fact that the Government has not tabled an amendment which, unfortunately, is the practice, even when well intended, constructive and good motions are tabled by the Opposition or Independent Senators. We must welcome the approach taken and I hope it can be seen as a statement of intent on the Minster's part that he will follow through on the logic of the motion.

As I assume I am close to the end of my contribution, I want to-----

3:10 pm

Photo of Terry LeydenTerry Leyden (Fianna Fail)
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The Senator is very wise. He is close to the end of the time allotted.

Photo of David CullinaneDavid Cullinane (Sinn Fein)
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I commend the Independent Senators for tabling this important motion and welcome the representatives of all of the charities present. I am a realist and a pragmatist. I do not believe we will ever reach Utopia, but I do believe the State has abdicated its responsibilities in recent times in ensuring people have the required levels of protection and that some of the responsibility for the provision of services has landed on the shoulders of many charities which are under pressure. I would not have a difficulty with paying more tax if it was used to provide services for people who need them. I certainly believe many higher earners would not have such a difficulty either. I commend the Independent Senators for tabling the motion and hope we will not have a similar motion before us in a number of months time. I hope the Government will give a commitment to act and deliver on it.

Photo of David NorrisDavid Norris (Independent)
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I compliment my colleagues on tabling this very important motion. I have just come from a meeting of the Oireachtas Joint Committee on Foreign Affairs and Trade and a series of other briefings. We are very busy in the Seanad today, but there are a number of issues I wish to raise. I am very glad that the motion has not been amended, that it has been accepted and that there will not be a vote on it. It appears to be going through unanimously, which is very important. In these extraordinarily difficult financial times we need to support genuine charitable efforts. There are some remarkable individuals and organisations such as the Society of St. Vincent de Paul, which is splendid. I want to come back to it because it is very vulnerable. People like Alice Leahy in Trust which looks after the homeless need and deserve our support.

This is an unregulated area, particularly with reference to charity mugging or "chugging", as I think it is called. I live on North Great Georges Street and come here via O'Connell Street and Grafton Street. I sometimes see up to eight charities with 20 young people collecting. Sometimes it is an exercise to be undertaken in transition year, but I do not think this is appropriate. The sector should be regulated properly, although I do not begrudge charities the money. There are other people who pay young people, very often foreign students, to collect money for them. I wonder how this activitiy should be regulated, but it should be regulated.

I particularly commend the work of Senator Mary Ann O'Brien and her husband who is in the Visitors Gallery who are the co-founders of the Jack and Jill Children's Foundation. Based on their tragic personal experience, they have built something that is extraordinarily important for parents placed in this difficult situation where they did not receive any State assistance. It is a reproach to what is supposed to be the caring element of our society that this very vulnerable group with damaged children - I hope it is not inappropriate to say this - did not receive support. The State stands reproached in that regard.

I mentioned the Society of St. Vincent de Paul. I am not a Roman Catholic, but it is not a sectarian group. It provides wonderful briefings. For example, some years ago it spoke about trying to front-load grants for fuel. Paying them on a staged basis was absolutely useless because one could not buy 16s.4½d. worth of fuel. One needs the entire lump sum to provide for oneself for the winter. It costs the Exchequer no more money, but it allows people to access fuel. That is the kind of practical measure the Society of St. Vincent de Paul takes. It provides clothing for people.

I am homing in on my last point, the main one I wish to make. I reported to the Garda some time ago on people who consistently dropped in little notices in my area asking for old clothes for a charity and giving a telephone number one could ring. I rang the number repeatedly, but nobody replied. It was a scam. The people concerned were taking clothes, while pretending to be charities and depriving those who might have benefited from them if they had been given to real charities.

That is only the thin end of the wedge. The real situation was exposed recently in an excellent programme on RTE. It was one I had been aware of for some time. The makers of the programme traced people who were violently breaking into the collection bins for the St. Vincent de Paul and so on and stealing the clothes. This is a multi-million euro industry. There was a St. Vincent de Paul warehouse in Cork with racks and racks of hangers, all empty. We saw video footage of these people forcibly bursting the doors open and piling the clothes into vans. That is the situation. There is no law in this country under which these people can be prosecuted. One question I would like the Minister of State to bring back to the Government is this: Can we please have some law? These are violent criminal gangs, many of them eastern European. I am not racist about this. Eastern Europe is a very large place but it produces some of these crooks. It is appalling that people in this day and age, who are really on the edge, should be deprived of clothing, of monetary assistance and so on because criminal gangs are making millions. Enormous trailers are being loaded up and exiting through Dublin Port bound for central Europe. That is wrong. Will the Minister of State please bring this issue back to the Government and ask for some legislation? We need to consult with the St. Vincent de Paul and the other charities to find out what legislation is needed and put it in place. Just this morning I heard in the news on the wireless that there was a battle between some of these groups and I am not sure that a man was not killed. In fact, he was killed. This is shocking. These criminals are leeching like vampires off the goodwill and good intentions of Irish people and infesting them with their evil. Now there are criminal gangs and deaths are resulting. That is not the purpose of charity.

I commend my colleagues on their raising of this issue. I am delighted it is not being opposed and I hope the Minister of State will take back to her colleagues the sentiments that have been expressed here this evening.

3:20 pm

Photo of Mary Ann O'BrienMary Ann O'Brien (Independent)
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I welcome the Minister of State to the House. Will she pass on my thanks to the Minister for Justice and Equality, Deputy Alan Shatter, for his extremely positive speech, his comments and his intention to move along speedily? As some of my fellow Senators referred to me as a slightly crazed entrepreneur, I have done my best to behave and be realistic.

Photo of Martin ConwayMartin Conway (Fine Gael)
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The Senator has always behaved.

Photo of Mary Ann O'BrienMary Ann O'Brien (Independent)
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We will soon welcome news from the Minister about his plans, his critical path and his timeline to roll this out in stages. Nirvana cannot be achieved in one month. So many Senators made good contributions that I will take a few points from them. Senator Zappone has had to go to another meeting. If I may be excused for my appalling manners, I never welcomed those in the Visitors' Gallery, who are from different parts of the charity sector. I thank them for coming.

There are Senators here who represent different sectors, including Senator Crown, who is a specialist in cancer treatment, Senators Ó Murchú and Mac Conghail, who represent culture, Senator van Turnhout, who has worked with children, Senators Conway and Eamonn Coghlan, and others representing the interests of children, of Guides, of those with disabilities, of Crumlin Children's Hospital, of sport, and of Úna Ní Dhubhghaill in the back who does all the work. We all need this. Our beneficiaries and donors need it. We need this regulation now. Senator Eamonn Coghlan spoke about brand Crumlin. We are saying that at the top of that umbrella is the brand Ireland charity.

We heard impassioned speeches this evening about the "Prime Time" programme two weeks ago. That is one of the many stories to emerge in recent years of little bites and chews at brand Ireland. We cannot afford for this brand to be damaged and it is only a matter of time before a big story comes and damages our beautiful brand Ireland. We need this regulation to be put in place. We know we have no money. We know we are broke, but there are ways. Of the Government's donation to charity, which is €4 billion, 0.1% would give us €4 million, which could comprise €3 million to run the regulator and €1 million for a beneficiary fund, maybe for a charity that had got into trouble. It is possible.

Senator Quinn spoke about crowd funding. It is the way we have to go in the future. Bill Clinton spoke about this at the Global Irish Economic Forum last year. We cannot even begin to think about crowd funding unless we have our systems and our accountancy and reporting practices in order. I meet people all the time through my relationship with the Jack & Jill Foundation who ask me how to start or close a charity or merge it with another charity, or whether I know of any other suicide charities in Munster or Leinster. I have to say I do not have a clue. These are all simple questions. How can I view the accounts of a charity? The Minister said one can go to the Companies Registration Office. I need my accountant to look into the companies' accounts, because a normal person cannot read the accountancy reports. We need simple information. We need a lovely website that will almost advertise brand Ireland so that we can see clearly what our charities are doing.

In summing up, I thank everybody, because this was a good, robust, cross-party discussion. We need to keep this high on the Minister's to-do list. It is a big undertaking, but Úna and the Minister have received some very good public consultation documents among the 160 submitted. We look forward to hearing from the Minister about his critical path. I thank everyone who contributed.

Question put and agreed to.

Photo of Terry LeydenTerry Leyden (Fianna Fail)
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When is it proposed to sit again?

Photo of Martin ConwayMartin Conway (Fine Gael)
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Tomorrow morning at 10.30.