Marc Ó Cathasaigh (Waterford, Green Party)
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Apologies have been received from Deputy Naughten while Deputy Joan Collins will be joining the meeting later. Members participating in the meeting remotely are required to do so from within the Leinster House complex. I ask members and witnesses to turn off their mobile phones as they interfere with the broadcasting equipment. I ask members participating remotely to use the "raise hand" function on Teams if they wish to contribute.

The subject of today's meeting is a discussion of the general scheme of the Charities (Amendment) Bill 2022. I am pleased that we have a second opportunity to consider this matter, which we will discuss in two separate sessions this morning. In our first session, I welcome from the Charities Regulator, Ms Helen Martin, Mr. Thomas Mulholland and Ms Madeleine Delaney.

Before we begin, I will explain some limitations to parliamentary privilege and the practice of the Houses regarding references witnesses may make to other persons in their evidence. The evidence of witnesses physically present or who give evidence from within the parliamentary precinct is protected pursuant both to the Constitution and statute by absolute privilege. Witnesses are again reminded of the long-standing parliamentary practice that they should not criticise or make charges against any person or entity by name or in such a way as to make him, her or it identifiable or otherwise engage in speech that might be regarded as damaging to the good name of the person or entity. Therefore, if their statements are potentially defamatory in respect of an identifiable person or entity, they will be directed to discontinue their remarks. It is imperative that they comply with any such direction.

The Department's briefing and supplementary information note has been circulated to members. I now invite Ms Martin to make her opening statement.

Ms Helen Martin:

The Charities Regulator welcomes the opportunity provided by this committee to provide submissions to it on the general scheme of the Charities (Amendment) Bill 2022, which seeks to enhance and strengthen the existing framework for regulating charities in Ireland. As acknowledged by other witnesses, the Charities Regulator is a relatively young organisation. However, since our establishment in October 2014, we have gained extensive experience of implementing the Charities Acts. Through our work, we have identified a number of areas where statutory amendments would enable the Charities Regulator to carry out its functions more effectively. The amendments proposed in the scheme will facilitate greater accountability and transparency, which are vital for public trust and confidence in the charity sector. They will also further support a balanced and proportionate approach to regulation by expanding what is currently a relatively limited range of regulatory tools.

Ireland’s charity sector of almost 11,500 registered charities plays a pivotal role across every facet of society. The public and the State rely on registered charities and the tireless work of hundreds of thousands of volunteers across Ireland, over 75,000 of whom take on considerable legal responsibilities as charity trustees.

We are cognisant of the profile of the sector we regulate and its importance in communities. As our 2021 annual report highlights, the sector comprises a diverse range of organisations, from the simple to the complex and from those with little income and limited operations to those with substantial resources and extensive operations.

The majority of charities and charity trustees work hard towards achieving their charitable purpose in compliance with the Charities Act 2009. Our regulatory approach reflects this and is balanced and proportionate. This is evidenced by the fact that a substantial part of our work is focused on promoting compliance and supporting charities in achieving it.

Our work includes daily engagement with individual applicants for registration to guide them through the registration process and with registered charities to ensure they understand the statutory reporting requirements and standards of governance as set out in the charities governance code.

While the public is the single biggest source of the concerns we receive regarding charities, only a small proportion of the engagement we undertake with charities and charity trustees is visible to the wider public due to the small number of cases where we have had to appoint inspectors or take other formal action. The majority of our compliance engagement is directed towards assisting individual charities to come into compliance and meet their regulatory obligations. It is only when we are not assured by that engagement that, for example, inspectors are appointed.

The Charities Regulator has been seeking amendments to the Charities Acts for a number of years to address certain fundamental and practical issues regarding the application of those Acts. There are a few key provisions in the general scheme that I would like to highlight today. Fairness is essential for effective regulation. We are seeking amendments that are intended to ensure all registered charities, regardless of their legal form, are subject to the same regulatory framework, particularly in relation to the preparation and filing of financial statements. Clarity on legal obligations is also essential. Given our experience to date in the area of compliance and the work we continue to carry out to support and encourage better governance standards in the sector overall, we view the proposed amendment clarifying the fundamental responsibilities of charity trustees as essential. As previous witnesses have acknowledged, there is nothing new here and the amendment merely codifies what is already the case and provided for in law.

While we are committed to a balanced and proportionate regulatory approach, we are limited by the type of powers currently provided for under the 2009 Act. Sometimes the only option open to us is more far reaching and heavy handed than a breach merits. Therefore, we are also seeking the expansion of the circumstances in which the regulator can impose intermediate sanctions as an alternative to prosecution. This is not an extension of our powers per se but more a modification of the range of powers already available to us under the 2009 Act. An important point to highlight here is the significant role of the independent Charity Appeals Tribunal, the statutory body established under the 2009 Act to hear and adjudicate on appeals against certain decisions of the Charities Regulator. A charity’s right to natural justice, including the right to appeal a decision of the Charities Regulator, should be fully respected in the proposed amendments.

We would also like to briefly mention the proposed amendment set out in head 5(a) which has been referenced by previous witnesses. The amendment is intended to clarify that where a suspected offence under the Charities Act is subject to investigation and potential prosecution by the Charities Regulator, we are not obliged to notify those offences to other investigative authorities. However, the Charities Regulator will still be required to notify the appropriate authorities when we suspect that an offence under their legislation has been committed. The amendment, if enacted, will not affect other obligations under the Act governing our relationships with investigating authorities and other regulators.

Finally, there are amendments intended to address practical difficulties encountered in day-to-day operations. These amendments relate particularly to the withdrawal of applications for registration and the obligation on charities to notify the Charities Regulator if they are seeking to amend key provisions in their governing document, such as their main object and income and property clauses. This provides an important safeguard for charities themselves. It ensures that changes are not made to their governing documents that could unintentionally negatively impact their status as registered charities. Ensuring that key information crucial to an organisation’s charitable status is known to the regulator and is kept up-to-date on the register of charities is vital. The public needs to know that when they donate money, goods or time to a charity, those valuable resources will only be used for their intended purpose.

Our core function is to work to increase public trust and confidence which are the bedrock of the charity sector. We are committed to achieving this, working with all of our stakeholders. The amendments we are seeking are designed to assist with this work and, if enacted, will further strengthen and enhance our ability to deliver a balanced and proportionate approach to the regulation of Ireland’s valuable charity sector.

Marc Ó Cathasaigh (Waterford, Green Party)
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I thank Ms Martin very much, particularly for persisting despite the feedback and the echo, which are making things difficult for everyone. Deputy Paul Donnelly is first.

Paul Donnelly (Dublin West, Sinn Fein)
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That echo is very disconcerting. I thank Ms Martin for her submission. Unfortunately, I was late as I had to be in the Dáil but I have read the report and I thank Ms Martin for taking the time to be here today.

Representatives of the charity sector appeared before this committee two weeks ago. I have a number of questions for her on issues that of concern to them that were raised at this committee. One concern is around the extension of significant additional powers, which is seen as a disproportionate or overly strong. It could be described as using a hammer to crack a nut. The legislation is seen as overpowering in that regard. The charities also felt that the appeals process is insufficient and that reputational damage could be caused to charities prior to any findings. As someone who works as a volunteer with a charity, I understand that the reputational damage that could be caused by something that may have happened but has not been proven is potentially fatal. That must be thought about carefully.

We also discussed the question of significant events and what exactly is meant by "significant event" in the context of members of the board of a charity. When one sits of the board of any organisation, one is always very conscious of the importance of doing one's best. Pretty much everyone who takes on such a role wants to do the best they possibly can but there is also a concern that because of issues that happened previously with various charities, people will be overly cautious in what they will report and what is meant by a "significant event". This could lead to a lot of additional work for the Charities Regulator and could overburden the charity sector, with people being overly cautious. The overall sense is that although a lot of the legislation is good, some tweaking is needed so that the members of boards are not going to spend all of their time worrying about what is a significant event and what they need to report.

The final issue relates to charities that are changing something in their constitution relating to their aims and objectives. Will Ms Martin clarify what that means, in real terms, for board members? What if something comes up that board members think is minor but the regulator does not? Clarification is needed. Everyone who sits on a board is concerned with the services that are provided by that board and with making sure that all work is being done to the best of the staff's ability. What board members do not want to do is to sit for hours on end worrying about what is significant, what needs to be reported, or whether they will get into trouble if they change something in a charity's constitution. We are asking people to volunteer, to come forward and sit on a board but if a charity is suspended or there is an investigation into it because of something that the board members did not think was significant, that causes reputational damage for the board members. How do we get people onto boards and involved in the community and voluntary sector if there is a fear in the back of their minds that they could get into serious trouble and suffer reputational damage, possibly for something they were not even involved in?

Ms Helen Martin:

I think I have got everything but if not I will defer to my colleagues who have joined me today.

The first question was on the extension of powers and the perception that a hammer is being used to crack a nut. That phrase has been used a lot. Funnily enough, the phrase we would use internally is “a sledge-hammer to crack a nut”, because that is often what we are facing. As I said in my opening statement, our first step when dealing with non-compliance is always to endeavour to engage with the charity and its trustees. That is our regulatory approach. The approach, in the first instance, is to try to bring a charity in difficulty and that may not be complying into compliance. There would never be a case, or there would be very few cases, where we would go straight in with a statutory sanction. Our regulatory approach is very much to bring charities into compliance. The regulatory tools we have available to us are available to us when we cannot get people to engage with us.

There are often cases where people are not in compliance. Those cases can be really hard because the individuals might not be willingly non-compliant. In many cases, the charity trustees are ill-informed. They are just not informed enough about their role as charity trustees and what they need to know to oversee a charity. As a result, one ends up with poor governance and charities finding themselves in difficult situations. Reputational damage, which was mentioned, can occur when people do not understand the obligations that apply to them. In most of these cases, all that is available to us is the prosecution of the individual concerned. We believe that is an absolute no-no in many cases because it is using a sledge-hammer to crack a nut. It is not going to achieve what we need to achieve. It is not that the trustees are badly intentioned; it is just that they are ill-informed. In those circumstances, we need to have available to us other powers that are more proportionate and balanced.

Let me give the example of the intermediate sanctions provision. That has been focused on a lot by many witnesses who have appeared before the committee. Intermediate sanctions can be imposed on a charity only with its agreement. An intermediate sanction is not one that we can impose unilaterally. The charity has to agree. The reason it would be advised to agree is that the only other option available to us in the circumstances is the prosecution of the offence. What we are looking for is the introduction of provisions in the Act that would be linked to those intermediate sanctions, because the intermediate sanctions provide the charity with an opportunity to fix whatever issues arise. They provide transparency to the public, indicating that the charity is working with us to remedy any difficulties. That is a really big thing for charities. We are better able to assist and bring into compliance those charities that, on being contacted by us, are willing to work with us, engage with us and help us understand the difficulties. That is very much our regulatory approach and starting point. That is the issue with the intermediate sanctions.

The Deputy said there were concerns that people could suddenly be taken off the register. I believe this is what he was getting at.

Paul Donnelly (Dublin West, Sinn Fein)
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Yes.

Ms Helen Martin:

That has not happened to date. We have hundreds of charities that have failed to submit their annual reports on time, which is a criminal offence under the Charities Act, but to date nobody has been taken off the register. The reason is that we appreciate and understand who we are regulating and our sector. We deal with hundreds or thousands of charities every year directly on the phone, at face-to-face meetings and through emails and other forms of correspondence. We are very much alive to the issue.

We view taking charities off the register and appointing inspectors and so on as being similar to the nuclear option. There will be cases where that will be an appropriate response on the part of the Charities Regulator but there is no question that there would not be a full process before that. The charities concerned would be given every opportunity to engage with us and remedy the compliance issue. It will never be the case that charities will find themselves taken off the register suddenly. That is not the approach of the Charities Regulator. Our record proves that we have not done that.

The only charities taken off the register to date were those taken off by operation of the Act because they lost their charitable tax status. It is provided for in the Act that once that status is lost, they must automatically be taken off the register. It applies only to a particular cohort of charities, namely those that never had to apply to the Charities Regulator. They got on the register of charities because they already existed and had a charitable tax number at the time the regulator was established. A charity registered by us will not necessarily be taken off the register, because the Act does not operate in that way.

The next point concerns the appeals process. As I said in the opening statement, we very much support and absolutely understand, particularly since we are a regulator subject to administrative law, that where we are making these kinds of decisions, there has to be an avenue of appeal. In our proposal, and as I see has been done in the general scheme, we have tried to make the appeals process more accessible. At the moment, many decisions can be appealed only to the High Court. We would like to see more decisions appealable to the Charity Appeals Tribunal because the latter is far more cost-effective for the Charities Regulator in terms of its public funds and how it spends them. Also, we are acutely aware of the stress and strain on charities owing to their finances. Someone said recently that the cost of High Court proceedings per day is in the region of €40,000, if not more. Therefore, this is really important to us. We fully support an accessible appeals process. When the Minister was here talking to the members, he said these were exactly the kinds of reasons the legislative scrutiny process is so important. It is so we can identify the issues. Ultimately, we are discussing a general scheme, but the actual legislation will be drafted by parliamentary counsel in the Office of the Attorney General, who will be absolutely up to speed with the kinds of administrative law requirements that any regulator should have in legislation.

The next point concerns significant events. I am conscious that many queries have been raised in this regard. What we are talking about when we talk about significant events are really those that have a catastrophic effect on a charity, whether that effect is financial or reputational, because of something that happens in the provision of services, or whether its beneficiaries or employees are suddenly at risk, for whatever reason. There is no question that this area in the general scheme needs to be refined. The Minister acknowledged that when he was with the members. We absolutely support that. Ultimately, we do not want charities to be in any doubt about what they need to do. In our view, the amending legislation is about clarifying and enhancing what is already in place. The last thing we want to do is introduce provisions that in themselves are not clear.

We have spent a huge amount of time over the years on the supportive element of our approach to regulation. We have extensive guidance. We are reviewing it at present with plain English in mind. We review it constantly. In addition, we have direct day-to-day engagement with charities. From our perspective, with regard to any obligation that comes in, regardless of how clear it is, we will likely have some guidance to assist charities around it to make sure that what we expect is absolutely clear. I would not expect charities to be left in any doubt about that or in any way feel inhibited in terms of their discussions at board meetings, which I believe was suggested by a witness on a previous occasion.

With regard to the constitutional changes, we absolutely appreciate the position. The general scheme is very broad. To echo what the Minister said, the main things we need to know about as the Charities Regulator are any changes to a charity’s main object. That is what the charity has been set up to do. I will come back to why it is essential that charities do not change their main object without getting the approval of the regulator.

The other issue concerns the income and property clauses, in addition to any changes to the winding-up clause. The income and property clauses concern how a charity spends its money. Members will appreciate that this is of relevance to the Charities Regulator but also to every member of the public.

Our position on the winding-up process is similar. It is a matter of what happens to the charity’s assets when it winds up. Any assets that are left over should be going to another charity with a similar charitable purpose. It is important that this be made very clear.

I will come back to the main object. It is important because we have had situations where charities were aware of their company law obligations and submitted the change in their constitution to the Companies Office but did not tell the Charities Regulator. There is a charity test provided for in the Charities Act. It has several elements, one of which is that a charity may have a charitable purpose only. If a charity has a charitable purpose and other purposes that are not charitable purposes under the Charities Act, it is not entitled to be registered as a charitable organisation under the 2009 Act. I hope members can see what I am getting at there. There could be people who do not understand that the change they have made has taken them outside the Charities Act. That is very serious because, if it were to happen, what would happen to the assets up to that point? The public would have donated to a charity that was registered but suddenly the charity unwittingly made what it thought was a minor change to its main object. We have experience of that and have dealt with those situations in a pragmatic way. We have not taken any bodies off the register. We will work with charities to try to get the issue rectified but, to be honest, it is not good enough for that to happen when the main object is so important to what a body does as a charity. That is why one of the main principles of the governance code is that charities must only advance their charitable purpose. Every activity they do relates to their charitable purpose. In addition, it is not open to any charity trustee, having collected money from the public for a particular charitable purpose, such as helping those with disabilities, to unilaterally and suddenly decide, without giving notice to anybody and certainly not to the Charities Regulator or the public, that the charity is going to spend those donated funds on something else. Charities are entrusted with funds. When people donate, they do so for a particular purpose and the money must go to that purpose. The charity trustees cannot suddenly decide they are going to spend it on a completely different area of charitable work, no matter how well intentioned that might be. That is a fundamental principle.

My final point relates to investigations and the reputational aspect thereof. The reputational aspect goes across all statutory sanctions because where we impose statutory sanctions, there will be a publication element to that in many cases. For example, if we impose an intermediate sanction, the nature of the sanction is that the non-compliance becomes public knowledge and the public is made aware of it. The benefit of the intermediate sanction is that we get the body to work with the Charities Regulator and we publicise how proactive the charity has been in addressing any issues that have arisen. We are always heartened when a charity comes to us after a concern has been raised, for example by a member of the public, to tell us they knew about the issue and took certain steps, and to set out exactly what they did and how they have already addressed it. In such case, we are delighted because we can see that governance is working well and they understand their obligations, and we can close the concern. Similarly, if we go to a charity and find that it was not aware of a breach and does not understand what it has done wrong, we are always happy if we can work with it to come up with a plan.

A big aspect of the investigations piece that members will have seen in the general scheme is the ability for the Charities Regulator, having gone to the expense of using public moneys to appoint inspectors in those challenging cases where we have significant concerns - we only appoint inspectors when we have considerable concerns and the charity has been given an opportunity to engage with us but has not been able to assure us - to have a statutory tool available to it to follow up when the inspectors deliver those reports. That is important. At the moment, when we publish an inspector's report, we are often asked what comes next. We are asked what we are going to do about the issue, given that the inspector has said all of these things that should not have been happening were happening. In such cases, the Charities Regulator currently has to try to engage with the charity voluntarily. We are reliant on the charity voluntarily fixing the things that have been identified. That should not be the case. The public would expect that the regulator would be able to follow up on the issue on foot of the inspector's report. Without these additional powers of direction, we could end up in a situation where an issue is not rectified and the only way we can try to combat it and address the non-compliance is to appoint inspectors again. We do not want that. It would be a waste of the public's money, our resources and the resources of the charity if that were the case. The voluntary approach that we adopt to the situations where we have inspectors' reports generally involves people having come to us with a plan. They will have engaged with the inspector and seen what the issues are. It will not come as a surprise to them. Due process is followed. The charities and charity trustees and anybody who is concerned and is mentioned in the report will be given an opportunity to see the report in advance of its publication and to provide comments on it to us. That is an important part of the process. It should not come as a surprise to anybody and we would not want it to. In most cases, the charities volunteer a plan. We have been lucky in that regard, although it is also because of the positivity in the sector we are regulating and its willingness to engage with us. If a charity has not already addressed things, by the time an inspector's report has gone through the whole process it is generally happy to provide a plan. It is a missing piece and it is certainly something we have scrutinised. We have been left in positions where a charity may not have engaged with us on foot of an inspector's report and we have been left scratching our heads and wondering what to do and whether to start again. The measures proposed in the general scheme are based on our extensive experience of regulating the sector and wanting to continue to apply the proportionate and balanced approach that we believe it requires.

Ms Madeleine Delaney:

I will add context that might help to allay any sense of fear or concern that a sledgehammer is being provided to crack a nut. The Vice Chairman referred to reputational damage where a matter has not yet been proved. This is an area for which Mr. Mulholland is responsible, so my apologies to him for stepping in. Last year, 569 concerns were closed and there were only three instances in which inspectors were appointed. This shows that the vast majority of concerns are dealt with on the basis of that engagement and nobody except the charity and us know anything about it. In terms of the engagement, obviously when we start we do not know where a matter might end, so we adopt high standards of procedure and fairness from the outset. Even though we are not a court of law and we might not be prosecuting, we adopt those standards and we do not take action that is not based on fact or is not applied in accordance with the law. That is some context in that regard. We take a balanced approach and we intend to continue with that. As a regulator, however, if one does not have the tools to ultimately do something, there will always be a small cohort who will not engage. Unfortunately, that is the reality of life. It is not necessarily that the powers are there to be used but, rather, that people know they are there and we can use them.

Marc Ó Cathasaigh (Waterford, Green Party)
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Very good. I remind members taking part on Microsoft Teams who wish to ask questions to indicate using the "raise hand" function.

There seems to be broad acceptance from across the sector and the Charities Regulator that the legislation is necessary. I know that a courts and civil law (miscellaneous provisions) Bill covered some of this ground but was not progressed. In addition, unfortunately, the change of situation with the UK in terms of its political affiliations with the rest of the EU necessitates some of what is in the Bill. As outlined in one of the notes provided to the committee, just under 42% of all registered charities are incorporated generally as companies limited by guarantee and the 2009 legislation is not really fit for purpose in that instance. It strikes me that people who might be characterised as being on opposite sides of this debate are not on opposite sides in reality. What the charities sector and groups such as The Wheel are calling for and what the Charities Regulator is calling for are very similar and aligned. The lack of detail in terms of progressive sanctions puts the regulator in a difficult position when it is trying to engage with charities. One of the characterisations the committee has heard relates to a tension between policeman and pal.

If the sledgehammer remains a sledgehammer rather than a more nuanced tool, the Charities Regulator is going to be increasingly viewed as a policeman. That will mean charities will not engage in order to remediate problems at an earlier stage when they are more easily fixed. We need some better direction in terms of the intermediate sanctions that are available, rather than going straight to charities being taken off the charities list. It is one of the things that the charity sector is very concerned about. We need to understand the appeals mechanism a little better as well.

I want to give the Charities Regulator the opportunity to flesh out the proposed two additional amendments to the existing draft heads and the three consequential amendments that come from that. They have been supplied to the committee in an information note circulated to all members. I ask Ms Martin to talk in a little more detail on these useful amendments, which meet much of the need for nuance that has been discussed. As her opening statement was quite truncated, she did not necessarily get to delve into the type of detail these amendments deserve. I want to give her an opportunity to do that now.

Ms Helen Martin:

I will start with the Chair's final point, on the two new heads mentioned in our submission to the committee. The first of those relates to the charitable purpose of a charitable organisation. The proposal is for a new section, section 42A. The reason for this proposal comes out of other observations we have seen and comments people have made around what they see as the obligation for charities to notify us of every little change. That was never intended. This particular new section aims to address the point I mentioned previously about changing an organisation's charitable purpose. Given the importance of that, we have suggested a discrete section to deal with that. As seen in the explanatory notes, there is already a provision in relation to charities that change their names and a requirement that charities notify the Charities Regulator in advance of doing that. I noticed there was a kind of incredulity from some other witnesses that were before the committee about that provision. This section is really important. I want to give a practical explanation for that. It relates to what we see every day. If a charity changes its name without telling the Charities Regulator, it is possible that it may change its name to a charity name that already exists on the register. It is also possible that it may change its name to something that does not indicate what it does as a charity. That is not something we would approve. Again, it is about transparency and the public knowing what a charity does. There are really good reasons behind that. Having said that, the only thing we can do in that situation is take a prosecution against a charity. When people have come to us after making a change without letting the Charities Regulator know, it has been because they did not realise. It has been a genuine mistake. In such circumstances, we have worked with them and highlighted to them the reason it is so important. The new section we have proposed is around that. It involves putting a similar provision in place for something that is equally if not even more important, particularly to the public; namely, changes to the charitable purpose of a charity as reflected in a charity's main object.

Ms Madeleine Delaney:

The Charities Regulator already has the power to remove a charity that is not meeting the charity test and is therefore not a charitable organisation. A change in the main object or a change of purpose, or even changes to those elements of the constitution which deal with what a charity does with its income and property, might all result in a charity falling outside of the test and having to be removed. These provisions allow us to prevent that. If it is clear that a charity needs to come to the Charities Regulator for this, hopefully we can head it off at the pass and it will not happen. As Ms Martin said, it is a way of clarifying the matter and making sure we get it at the outset but it is all going to the same issue. As I have said, the power is already there and it is the same across all the jurisdictions. If an organisation is not continuing to meet that charity test, it can be removed from the register.

Ms Helen Martin:

There is a consequential amendment to the general scheme. What is in the proposed new section 40 has already been provided for, but to a much more limited extent. It is not as clear as it is in the new section that we have proposed and we hope will be considered. We think it is a better laid-out section and we hope it will better address some of the concerns people have around needing to notify us about minor changes. They absolutely will not have to do so. We need to be clear on what people are required to do if something is an obligation. We are interested in the main object, income and property clauses, and charities winding up. The consequential amendments relate to those elements as they relate to the general scheme.

The final head we mentioned relates to the Charities Act 1961. There are older charities Acts that we operate under as well because we took over some functions from the Commissioners for Charitable Donations and Bequests for Ireland. A particular provision has been posing a real problem for charities and for the charity services committee of the Charities Regulator. These are highly qualified people who consider quite complex applications from charities, particularly charitable trusts, relating to trust deeds, sale of property and that kind of thing. We are looking for a technical amendment here. There is a requirement at the moment and it is not clear whether charities have to go to the High Court to get something done. Much of what the commissioners did was to ensure charities did not have to bear the cost of going to the High Court. This is in a similar vein - we are trying to make sure that we are clear on this and that we can save charities money where possible. Charities can then spend that money towards their charitable purpose. This second amendment is quite technical, but it is something that should be welcomed by everybody. Certainly our charity services committee will welcome it, as will the charities that have made these applications.

The Vice Chairman mentioned the "tension between policeman and pal". We certainly think we have the balance right. We would not refer to it in those terms. As a regulator, the last thing we want is to be the subject of regulatory capture, which is what being a "pal" of the sector denotes, unfortunately. The way we look at it is by considering how we can bring charities into compliance and address the small minority of charities mentioned by Ms Delaney earlier that are unwilling to engage for whatever reason, perhaps because they are ill-informed or badly intentioned. That is where our enforcement and compliance piece comes into play. As evidenced by our work to date and by our engagement charities, we have a supportive role to play. Even our own mission encapsulates that we have a supportive element while also ensuring compliance and enforcement. We are extremely conscious of the supportive element, which is why we spend such a significant part of our non-pay budget on it. We spend a lot more on it than on compliance and enforcement. In terms of facts to back up what I am saying, I hope that provides some assurance to the committee.

The companies point is a crucial thing. The Vice Chairman mentioned a courts and civil law (miscellaneous provisions) Bill that was introduced. We proposed some amendments to that legislation, but unfortunately it did not go anywhere. They were crucial amendments that are needed. There is a considerable flaw that has to be addressed. Out of everything in the general scheme, it is the most important. The framework as it was set up for charities exempted charities that are companies from a number of key provisions, and not just the financial ones. There are implications around that. For example, the obligation to keep proper books of account applies to all charities under the Charities Act. If the charity is a company, however, the provisions under the Charities Act does not apply - what applies is the similar requirement under the Companies Act. If we are faced with a situation where a charity is a company and has not complied with the duty to keep proper books of account, as the Act currently stands we cannot look to impose intermediate sanctions on that charity.

It is not bound by that particular provision, so it is not technically in breach of the Charities Act.

Paul Donnelly (Dublin West, Sinn Fein)
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It will not be, in terms of the Companies Act.

Ms Helen Martin:

It would. In that situation, we would notify the corporate enforcement authority of that. We mentioned earlier that we are in touch with many different regulators. We have memorandums of understanding, MOUs, and different things in place for that reason, but also because we are required under our Act to let other regulators and bodies, such as An Garda Síochána and Revenue, know where there are breaches of their legislation. From our perspective as the Charities Regulator, that is completely unfair. The chances are that the Corporate Enforcement Authority potentially will not follow up on what it might see in the great scope of what it does as not being a significant issue, whereas we view that as a significant issue. Albeit that the charity might be very small, it is important that charities manage their finances. They are entrusted with money by the public or State and they have to be able to manage it.

It seems unfair that a charity that is an association, for example, will be subject to sanctions by the Charities Regulator. The sanctions that we have available to us are not necessarily the same ones as there are under the Companies Act. If there is a framework to regulate charities, it should regulate all charities, regardless of their legal form. That is why this is essential.

Where that really bites is regarding the preparation of financial statements, the publication of them on the register and also the requirement to audit. If we were at the moment to introduce regulations around audit, for example, and when charities have to get their accounts audited, they would only apply to charities that were not companies. The charities that are companies would be able to avail of an exemption under the Companies Act, which would not be available to any of the other charities. That is an inherent unfairness in the framework as it is currently presented in the Charities Act 2009. It is why we tried to get it back in 2017 and why we have been talking about this for so long. It is having an impact on the level of transparency in the sector. We cannot introduce those rules around how a charity prepares its financial statements and also when they have to get those statements audited. Charities will be required to get those financial statements audited at a lower level than would be the case under the Companies Act. As the Deputy is probably aware, under the Companies Act, they can be making millions – Mr. Mulholland can correct me if I am wrong – before they have to get their accounts audited because they have an exemption under the companies legislation.

I just wanted to raise that point. It is very important, not just for the Charities Regulator, but to the sector. When we did our surveys back in 2020 with the public, which were published in 2021, one of the big things that came back, unsurprisingly, was what the public wanted to see and what it felt impacted its level and confidence in the sector was how transparent charities were around their finances and what they were doing with the money that they receive. It is crucial to that.

Ms Madeleine Delaney:

Another important point on that is that we are not asking the charities that are companies to do any more work; they have to produce these accounts anyway. We are just telling them we want them to file them with us the same as every other charity so that it is there and visible to the public. Out of fairness, we need to be able to say to those charities and charity trustees that put in so much work to be compliant with their obligations onto the Act that we will look at those who are not and ask them to be compliant as well. It has to be a level playing field. They are all the considerations that we have to take into account. At the end of the day, as Ms Martin said, we are looking to enhance the transparency and accountability in order to increase public trust and confidence.

Paul Donnelly (Dublin West, Sinn Fein)
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There are no additional requirements from the Charities Regulator in relation to the accounts. It is just simply when a company submits them, it is to the companies office. The Charities Regulator sends them to us.

Ms Helen Martin:

There is a provision in the Act whereby we connect in with the companies office and receive those accounts that go to it and they are presented on our website. However, what the Act intended was that charities would produce accounts in a uniform format so that they could be easily compared. At the moment, it is very difficult for anybody doing research in this area or a member of public who wants to compare one charity with another because charities will produce things in very different ways.

Another issue that we have – the Deputy may have heard this as well from other people who spoke with him – is around abridged accounts. We have charities that are companies that have prepared the full accounts in order and then have submitted, or somebody has submitted on their behalf, abridged accounts to the companies office. That is then what appears on the register. Our view is that it may be legally okay and permissible for a charity that is a company to do that, but abridged accounts provide virtually no detail and certainly do not provide the level of transparency. The provision is already there, but the Minister has not been able to make the regulations under it because they would only apply to a part of the overall register of charities in Ireland today. It is the regulations that would set out the detail of what people have to do when they are preparing accounts.

Also, we have sought to increase the threshold at which people have to produce accounts and at which people will have to get their accounts audited. It was €100,000 and we are looking to increase it again up to €250,000. That would be the point at which they would have to produce what would be the most detailed set of accounts. We call them statement of recommended practice, SORP, accounts. It specifically relates to charity accounts and what someone reading charity accounts should see. There are very particular things that, as one would imagine, are specific charities and that is what those rules entail.

This was something that we consulted on back in 2016-2017. We know that at that time, increasing the thresholds was supported, so that is another amendment that is in there. It comes back to being proportionate, balanced and fair. If and when these rules come in and the amendments are made, if they come in as planned, a small charity may not actually have to submit its accounts to us as part of its annual report each year and it will not have to get its accounts audited. It will still be required and bound by the separate obligation to keep proper books of account. However, it will not be required to file anything with us. That is important as well. We are looking to increase that threshold too so that more charities would fall into that. I know that Mr. Mulholland has some stats on those thresholds, the practical impact they would have and the numbers they would release from having those more onerous obligations on them, if the Deputy is interested.

Mr. Thomas Mulholland:

Perhaps I will just run through those figures. As it currently stands, charities with expenditure under €10,000 would be exempt from having to submit accounts to the Charities Regulator. We would propose increasing that to €25,000. That is from €10,000 to €25,000. On the most recent figures, that would benefit 744 charities. This means 744 more charities would not have to file their accounts to it, which is obviously reducing the burden on those, which are, in fairness, small charities. Ms Martin mentioned the charities at the other end of the scale and the current threshold for having an audit. We recognise having an audit is an expensive procedure. Let us face reality - it is an onerous obligation. The limit currently is set at €100,000. We would propose a limit of €250,000. Increasing that to €250,000 would put it at a more realistic level. More than 1,000 charities would benefit from that on the most recent figures. Some 1,000 charities would be removed from the requirement to have an audit, which is to their benefit.

Marc Ó Cathasaigh (Waterford, Green Party)
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Some material changes and the significant events are the two things that have come across the submissions. It shows the benefit of having a pre-legislative scrutiny process. Our guests have brought a level of nuance to the discussion today, which answers many of the concerns. Certainly, if we see that feed through into the legislation, it will be helpful.

I wish to give our guests the opportunity to talk about what they would like to see in terms of progressive or intermediate sanctions, as they call them. Is that something they would like to see codified within the Bill? Do they feel like they have enough guidance as it currently stands within the Bill in terms of those progressive steps that they take with charities?

The other thing is the appeals mechanism and the current situation whereby recourse to the High Court seems to be very early in the list of items that will be undertaken. How often have we seen recourse to the High Court used by the Charities Regulator or by a charity to push back against a decision made by the regulator? Maybe the witnesses could give me a little more of a detailed understanding of what kind of appeals mechanism the regulator would like to see in order that we have the appropriate protection for charities to be able to defend themselves against decisions made by it.

Ms Helen Martin:

I will start with the first question about the progressive sanctions. We are trying, through the general scheme, to link existing breaches of the Act to the intermediate sanctions. The intermediate sanctions are already in place but are very limited in what they apply to. They apply mainly to the financial breaches. If proper books of account are not kept, for example, that could lead to an intermediate sanction. However, we are looking for other key provisions that are already in the Act to also be linked to an intermediate sanction in order that we have that ability. In the case of a failure to respond to a direction from the Charities Regulator for information, for example, our approach is very much to bring charities into compliance. Therefore, when we seek information, we normally do so on a voluntary basis first. We will ask the charity to provide us with the information. If it does not do so, or if it provides us with information that is incomplete, at that point we will consider whether we need a statutory direction. If that does not work, we are into the area of potentially having to appoint inspectors. Within that provision, there is a more serious provision again on getting information from charities, and charities have to comply with that. However, with a lot of those provisions there is no recourse if they are breached other than to take the charity off the register or prosecute those involved. All we are trying to do, therefore, is to link more things into the intermediate sanctions, which, as I explained earlier, requires the consent of the charity. I do not really see that as giving us more powers. It was very clear when Members, as lawmakers, made the original legislation that they believed, rightly so, that certain things, such as failing to respond to the Charities Regulator when it issues a statutory direction for information, are very serious. However, there is the missing link that we hope to convince people to put into this legislation. That will feed in and give us the ability to formalise the bit in the middle that we have at the moment, whereby we have brought the voluntary piece as far as we can and the only thing we have left is prosecution, for example. We know that it is a serious breach but we do not want to see an individual prosecuted. He or she will then have a criminal record. That should be kept for the very serious cases, and that is what we are trying to do. We are trying to bridge that gap. To the extent that there are concerns out there, I hope that today we have assured the committee and explained the thinking behind this.

That leads quite neatly to the Vice Chairman's next question, which was how many times we have had recourse to the High Court. We have been involved in two such cases. One is ongoing and the other the committee will have heard about. Sorry - there have been three such cases. I had forgotten one a number of years ago. Last year we were involved in a case when the Charities Regulator had to go in and seek a winding up of a charity because its own trustees were not in a position to do that. The reason the Vice Chairman has not seen a lot of recourse to the High Court is not that there have not been cases in which we thought we were being left with no option but to bring those involved to the High Court, but rather that we have been in a situation whereby we have thought that would be too extreme from a cost or resourcing perspective. The Charities Regulator is a relatively small organisation and we do not have a huge budget. We cannot be going to the High Court to have resolved what are important compliance issues but ones that are not that significant. If a compliance issue were that significant, we would appoint inspectors. It is a matter of proportionality. We talk about this all the time, but that is proportionality in practice. Therefore, the fact that the Vice Chairman has not seen High Court proceedings does not mean they have not been considered in hundreds of cases, but we have found other means to bring the charities into compliance. Sometimes, however, those other means of bringing charities into compliance are very resource-intensive. When we are looking at value for money, we have to say to ourselves that if there were some easier way for charities to bring appeals - by going to the Circuit Court, for example, or for charities going to the Charity Appeals Tribunal - it would be more cost-effective for all parties involved.

Anything in this general scheme is there because we have had to try to implement it. As we said earlier, we get hundreds and hundreds of concerns every year. Members will not know to whom those concerns relate. We do not publish that information for the very reason we talked about earlier, that is, reputational damage and so on. There is, however, a lot of work that goes on under the hood, particularly when we are dealing one-to-one with hundreds and thousands of charities every day of the year.

Marc Ó Cathasaigh (Waterford, Green Party)
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Could the witnesses flesh out the role of the Charity Appeals Tribunal? That was the third leg of the stool of my questioning.

Ms Helen Martin:

The Charity Appeals Tribunal is at the moment available only for a limited number of decisions, mainly the decisions we make where, for example, we refuse an applicant for charitable status. We have done that in only a few cases, and none of those cases have been appealed to the tribunal. Obviously, we provide reasons. There is a whole process and numerous levels of processes around registering a charity. When we write to applicants, we do so in advance and tell them we will be recommending that their application be refused. We give them the reasons and an opportunity to come back to us. That is something we have done ourselves. It is not provided for in the Act but it is an additional level of fairness and procedural fairness that we think is required. We have the option to remove charitable status if, for example, someone were to do something that moved an organisation from being a charity to being an excluded body. There are excluded bodies under our legislation. They are entities that cannot be registered as charities. For example, a political party or anything that advances a political cause is not a charity under the Act and will be excluded. Similarly, sporting bodies are excluded. Therefore, there could be decisions whereby, as I said, people might inadvertently do something or carry out an activity or start carrying out activities that are not charitable. They may be good and well worth doing but they are not strictly within the four corners of the Act, and in that case we may have to remove charitable status. We have not done that yet, but that is potentially something that would come up. That would go to the Charity Appeals Tribunal, which is entirely separate to the Charities Regulator. The former is an independent statutory body. Although it was established by the 2009 Act, it is completely separate to the regulator. It has its own members, who are appointed by the Minister. I think the committee was advised at an early committee meeting on the general scheme of the Bill that the Department provides the secretariat for the Charity Appeals Tribunal.

We are in favour of it being possible for any decision taken that is of a similar effect, such as an organisation being taken off the register for a particular reason, to be appealed to the Charity Appeals Tribunal. I anticipate that this will be worked through by the drafters of the legislation, who will be very familiar with this, and by the Department itself. We are always happy to provide input to that. We absolutely recognise the importance of this, and what we see in the general scheme is an extension of the kinds of decisions that could be appealed to the Charity Appeals Tribunal.

Marc Ó Cathasaigh (Waterford, Green Party)
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Very good. As no other Member is offering, that concludes our consideration of this matter with the Charities Regulator. I thank the witnesses for their contributions. They were very valuable. We will now take a short break before moving to our second session with representatives from the Irish Council for Civil Liberties. Again, I thank the witnesses before us for attending.

Marc Ó Cathasaigh (Waterford, Green Party)
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I remind everyone that members participating remotely in this meeting are required to do so from within the Leinster House complex. I ask members and witnesses to turn off their mobile phones as they interfere with the broadcasting equipment. I ask members participating remotely to use the "raise hand" function on Teams if they wish to contribute. I am pleased to continue our conversation on this important legislation and, in this regard, I welcome Mr. Liam Herrick, executive director of the Irish Council for Civil Liberties, ICCL, and Mr. Ronan Kennedy, policy officer for the Democratic Freedoms initiative, who is also from the ICCL

Before we commence, I will explain some limitations to parliamentary privilege and the practice of the Houses regarding references witnesses may make to other persons in their evidence. The evidence of a witness physically present or who gives evidence from within the parliamentary precinct is protected pursuant to both the Constitution and statute by absolute privilege.

Witnesses are again reminded of the long-standing parliamentary practice that they should not criticise or make charges against any person or entity by name or in such a way as to make him, her or it identifiable or otherwise engage in speech that might be regarded as damaging to the good name of the person or entity. Therefore, if their statements are potentially defamatory in respect of an identifiable person or entity, they will be directed to discontinue their remarks. It is imperative that they comply with any such direction.

The Department's briefing and supplementary information note has been circulated to members. I invite Mr. Herrick to make his opening statement.

Mr. Liam Herrick:

I thank the committee for inviting us. The ICCL warmly welcomes this important legislation and we congratulate the Minister of State, Deputy Joe O'Brien, and the Minister, Deputy Humphreys, for bringing forward essential reforms in this area.

The ICCL approaches this question not just as a matter of regulating the charity sector. We see this as an essential measure in the context of Ireland's obligation to create an enabling environment for civil society and for ordinary people and communities to take part in the democratic life of the State. We see this question from the perspective of Ireland's international human rights obligations to vindicate the right to freedom of expression and freedom of association. We also approach the question in the context of our commitment to fair procedures and the rule of law. It is essential that the regulatory powers of the Charities Regulator are, as the regulator has said, proportionate and balanced.

We wish to address two specific questions today. The first is the proposal contained in the draft Bill that concerns the amendment of section 3 of the Charities Act 2009 and inserts "the advancement of human rights" into the Act as a new valid charitable purpose for organisations. This we strongly welcome. This amendment will address an anomaly that has existed in the original Act since 2009 and will provide for greater oversight and transparency in the sector, which we have long called for. The advancement of human rights was originally listed as one of the charitable purposes in the original heads of the Charities Bill in 2006 but it was omitted from the final Act in 2009. In neighbouring common law jurisdictions, the Charities Trustee and Investment (Scotland) Act 2005, the Charities Act 2006 in effect in England and Wales, and the Charities Act (Northern Ireland) 2008 all expressly provide for the advancement of human rights as a charitable purpose. Consequently, Irish law has been out of step with norms of our neighbours. As the advancement of human rights is a recognised charitable objective in the UK, including Northern Ireland, this has created and important gap of equivalency in the protection of human rights between both parts of this island.

The rationale, or one aspect of it, originally used by Government for the exclusion of human rights from the list of valid charitable purposes under the Act was that it is not a category used by the Revenue Commissioners in their determination of charitable status. However, the Charities Act 2009 is the primary statutory instrument governing this area and in our view it should be the primary reference point for legislative authority on what constitutes a charity or charitable purpose and not the interpretations of the Revenue Commissioners. In our view it would be prudent that, following the enactment of this important amending Bill, the Charities Regulator and the Revenue Commissioners agree a memorandum of understanding or other instrument of that type, as recommended by the joint committee in 2015, to ensure consistency between decisions and approaches taken by the Charities Regulator and the Revenue Commissioners when evaluating the status of bodies in the is category.

The second point will, we feel, be an important aspect of how this change will be operationalised with regard to charities and bodies that might be deemed charities in future. It relates to Guidance on Charities and the Promotion of Political Causes, a document issued by the Charities Regulator in 2021. We heard in the previous session from the Charities Regulator about the importance the body attaches to guidance documents it issues to support and assist charities. We note the language in that document on the nature of political engagement deemed to be permissible under the Charities Act has changed from an earlier guidance document issued in February 2018. The earlier document made reference to the fact that organisations established "exclusively to promote a political cause" would be considered ineligible for charitable status. I think we can all appreciate why it would be inappropriate for a body established for an exclusively political cause to be deemed a charity, for example, if it was set up to support a particular political party or candidate. However, in the updated document from December of last year, the language used is that organisations "set up primarily to promote a political cause" would be so excluded. This creates a potential difficulty about how the regulator or other bodies might interpret what is political and when an organisation crosses the threshold into being "primarily" concerned with political activity. In our view, it is difficult to envisage how, under the amended legislation, a human rights organisation could advance human rights without falling foul of the updated guidance from the regulator, given the prominent and vital role political advocacy and campaigning plays - properly - in the day-to-day work of human rights organisations.

It is our recommendation that in order for the addition of the advancement of human rights to have a meaningful impact in Irish charities law, it will be necessary for the regulator to revert to the original 2018 wording on political advocacy to provide certainty and clarity to the law. This would mean organisations established to exclusively promote a political cause should not, and cannot, be considered charities, as is correct. However, organisations should be allowed to conduct legitimate political advocacy as part of their charitable work in pursuit of their charitable aims. We very much understand there is a need to protect and distinguish electoral politics from the work of civil society but there is nothing wrong with charities or other civil society bodies engaging in political advocacy. Indeed, it is an essential and healthy feature of any democracy that ordinary members of the public can seek to influence the public life of the State. We do not want to enter an area where the Charities Regulator, or any regulator, is making subjective analyses of whether bodies should be allowed to choose political aims to advance their charitable objectives.

We are eager to engage with the committee on this question. We noted with great interest the contribution of The Wheel and Charities Institute Ireland at a recent meeting of the committee. They raised very important concerns about fair procedures and the risks associated with expanding the powers of the regulator. We fully endorse and support their views. While we understand a regulator or indeed the State may wish to expand the powers available to a regulator to give it greater discretion, this also creates certain dangers and risks that those powers might be used at some point in the future to suppress charities or other civil society organisations with which the State does not agree.

Marc Ó Cathasaigh (Waterford, Green Party)
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I thank Mr. Herrick for his initial contribution. Does Deputy Paul Donnelly wish to lead the questioning?

Paul Donnelly (Dublin West, Sinn Fein)
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Yes. It is funny because I was trying to figure out the definition of what is "political" and what is not. I am of the view that pretty much everything we do is political. How then do we come to a definition of what will be excluded as an organisation for charitable purposes? I looked at the document and there was reference to a youth group set up for migrants. The group was advocating for extra funding, organised a march and used its resources to march to the Dáil. That would be permissible. We are getting into subjective opinions on what would be deemed permissible and what would not be.

From the perspective of the Irish Council for Civil Liberties, how do we manage to do this? If a group is set up exclusively for political purposes, this would be quite clear. The other set-up is very nuanced. Where a body is trying to change legislation or is seeking funding, it would be a bit dangerous if an organisation linked to the State had the power to tell that body it is not a charity or could not use particular charitable funding. This has the potential to be abused if the State organisation did not like a body. Does that make sense?

Mr. Liam Herrick:

We very much agree. The first thing to say is we can approach this question of political engagement by charities or community organisations by asking how much of charities engaging with the political process we are willing to tolerate. We could also approach it from the perspective that was spelled out by the Charities Regulator in its 2018 documents, which is as something we should encourage. We should encourage our charities, community organisations and youth groups to take part in the political process. Ireland has a number of international obligations under human rights law to create an enabling environment to maximise the extent to which ordinary people can take part in protests and demonstrations and write to Members of the Oireachtas. We should start from the perspective of it being a positive.

It is possible to distinguish activity that is clearly linked to parties, candidates or a side in a referendum campaign. It is possible that we do this through Electoral Acts regulations and lobbying regulations. There are mechanisms for doing this. Outside of this we should encourage and facilitate to the greatest extent possible groups engaging in activity, as long as it is in furtherance of their charitable aims. There are a number of examples where this can become a problem. Deputy Donnelly very astutely pointed to the fact that in Ireland a large proportion of our charities receive some or the majority of their funding from State bodies, such as health bodies or housing bodies. It might often be the case that a youth group is concerned about the provision of resources in its community and might want to protest or express its view on this. We can all envisage a situation where the relevant public or State bodies or Departments might wish to limit its ability to do so. In our view this is an inappropriate restriction on the freedom of expression or freedom of association of these groups. We should not try through charities law to limit their ability to do so.

We also have the example of national advocacy organisations that campaign on very important social questions, such as the position of children in society. Do we want to create a situation where a large organisation working in the area of children's rights would be allowed to raise charitable funds to feed children but would not be allowed to raise charitable funds to raise its public concern about the extent to which children are bound to be in poverty because of the policies of the State? I do not think anybody would like to see this either.

On the international stage Ireland has, and we should be very proud of this, a very strong record of defending civil society, charities and non-governmental organisations in countries where they have been suppressed for political action. Recently, for example, the Irish Government played a very strong role in defending civil society in Israel where the Israeli Government sought to shut down organisations, some of which are partly funded by Irish Aid and the Irish Government. We had an instance recently when one of the largest Irish aid organisations had a fundraising campaign in this jurisdiction because it was concerned about the human rights of people living in the territory of Israel. Complaints were raised that it was an overtly political campaign and not a charitable campaign. We would say that if Irish aid agencies that deliver services on the ground in Gaza feel that, to advance protection of the human rights of the people with whom they work, they need to provide not just food and medicine but to raise political concerns, then they are best placed to make that judgment and not a regulatory body here and certainly not individual political opponents in this jurisdiction who might wish to use the Charities Regulator and the complaints mechanism to cause harm and embarrassment to the aid agencies of which we are so proud.

Our view is we should focus on the very narrow range of activity that is electoral and not limit charities. For example, if the regulator very clearly stated that, if I am raising money for children's rights, I should use that money only for children's rights, and if I were not allowed to engage in political advocacy on behalf of children and was only allowed to provide books and food to children, this would be a very Victorian and limited understanding of what charity means.

Paul Donnelly (Dublin West, Sinn Fein)
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I want to continue to play devil's advocate. I will say I have a charity, the constitution of which allows for raising funds for food and books for children and raising funds for advocacy to look at the root causes of why children are hungry and why there is educational disadvantage. Is there a danger that people who give €500 to my charity could state it was only to feed children and that they did not see that advocacy was included in the charity's constitution? Perhaps a better example is my charity deciding to spend the entire €500 on advocacy and not on food and books for the children. Is it entirely up to an organisation itself to decide where the €500 goes once its constitution covers advocacy and feeding children and providing books?

Mr. Liam Herrick:

The regulator was very strong on this. There needs to be transparency and there needs to be clarity. A person who is giving money to a charity needs to have a very clear understanding of what the money will be used for. Certainly if an organisation states it is a children's rights charity and it does a number of activities, including advocacy and the provision of services, it has to do these things. There cannot be a gap between what an organisation promises its donors it does and what it does in reality. There can be no question of this. If a charity were to fundraise and state every euro given is for purpose A, it should use the money for purpose A. This is the territory in which the Charities Regulator is properly concerned. It is to make sure there is good practice, transparency and accountability. We do not feel it should be properly concerned with deciding who can engage in campaigning and who cannot. This is a risk we see with some of the approach being taken.

Marc Ó Cathasaigh (Waterford, Green Party)
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The opening submission of the Irish Council for Civil Liberties is very focused. It is in two parts. We are unlikely to comment much on the first part. We can take it as read there is support for the advancement of human rights being brought into the Act as a new, valid, charitable purpose for organisations. If there is a voice speaking against, I have yet to hear it. We are all supportive of it. I want to make mention of it.

As Deputy Donnelly did, I will play devil's advocate a little on the second part of the opening submission. I will use my own party as an example, although what I will say is true to a greater or lesser extent of all political parties. I am a member of the Green Party. We are a political party. We are not a charity and we should not be regarded as a charity. Mr. Herrick spoke about the difference in wording between a body being exclusively to promote a political cause versus being primarily to promote a political cause. The vast majority of members of the Green Party progressed from a background of environmental activism and they do not leave this at the door when they enter the party. The vast majority of members of the party, and the vast majority of the elected members of the party, are still involved in environmental activism to some extent. I do not know that I could say of the Green Party that we are exclusively to promote a political cause. We are certainly primarily to promote a political cause but I do not know whether all of our actions are exclusively directed towards a political end point in terms of electoral results. I guess I am playing devil's advocate from this point of view. Could I make the argument that we should be classified as a charity, based on the fact that while we are primarily focused on a political cause, we are not exclusively dedicated to promoting a political cause?

I am not for one second suggesting we should be treated as anything other than a political party, but I want to use this kind of devil's advocate's position to tease out the ICCL's wish to move from one definition to the other.

Mr. Liam Herrick:

On that point, if we start distinguishing the political from the non-political around the electoral process and if we look at political parties that execute executive or legislative power or seek to do either or both those things, that is, to make and implement the laws of the country, in our view this is what distinguishes the political sphere from the civil society sphere. I think everybody understands this point and that elected representatives, who hold the power that people in these Houses do, have different obligations and considerations than those of us outside of that who have no power in making laws, except in the context of trying to engage and to provide information to elected representatives. I think that is a clear distinction.

If we try to get into a subjective analysis of what are the goals of Friends of the Earth or the Green Party, for example, we will find that all the parties represented in these Houses have goals and objectives that are matters of principle and public good, whether those involve the protection of the environment and-or workers' rights, achieving a greater sense of reconciliation between people in both parts of the island or to build stronger communities. There will, of course, be strong overlaps between the goals of political parties and those of charities and community organisations. If we put a regulatory body in the business of evaluating those various goals, I think we will have significant difficulties. The political system should be regulated in a political way. The Charities Regulator should be concerned with ensuring, in the context that the law says what is a charitable objective, whether people are keeping themselves within those parameters. The regulator was very helpful in saying that if the law defines what is a charitable objective, whether it involves poverty, human rights, religion, sport or whatever it might be, the task of the office is to ensure that bodies are staying within that remit. This would be the only concern of the office. It would not be concerned with whether a choice is made to campaign or to write a letter to a Deputy because this would not be the proper remit of the Charities Regulator.

Marc Ó Cathasaigh (Waterford, Green Party)
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Very good, that makes sense. I do not see any members online indicating. Is Deputy Paul Donnelly satisfied with that response?

Paul Donnelly (Dublin West, Sinn Fein)
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Yes. It is fairly clear. It is fantastic to see that this is coming into the legislation. We need to have a deeper conversation on this change regarding the primary objective, but I certainly will be advocating for it.

Marc Ó Cathasaigh (Waterford, Green Party)
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It was a short question-and-answer session. As I said, however, the initial opening statement was extremely focused and it got the point across very forcefully. I thank the witnesses for taking the time to come in today and for their opening statements and contributions during the question-and-answer session. This concludes our consideration of this matter this morning and also the committee's business in public session. I propose that the committee go into private session to consider other business. Is that agreed? Agreed.