David Stanton (Cork East, Fine Gael)

I want to be associated with the remarks made by the previous speaker about the Minister of State, Deputy Carey. I thank him for his presence and acknowledge his deep interest in this area.

The Bill is extremely welcome and timely. It is possibly overdue, but we are glad it is here. It is to reform the law relating to charities to ensure greater accountability and to protect against abuse of charitable status and fraud.

As many speakers alluded to already, there is a concern that some individuals and groups are using charities as a cover to raise money for dubious purposes and it is obvious that the law and procedures in this area seriously needed tightening up. The Bill also aims to enhance public trust and confidence in charities to increase transparency, and that is also quite important.

There are a number of concerns about the legal structure for charities. Almost every Member of the Oireachtas has been involved in some form of charity because we are out there dealing with the public and with communities all the time. As a result, it struck me that while one way of becoming a charity is to form a company limited by guarantee, that can be a cumbersome legal way to proceed. Many Members have already alluded to this. To put it simply, there are big charities and small charities. In a way that is a childish view, but it is one way of looking at it. We must support and encourage all types. Perhaps it is necessary to find a way of differentiating between the types of charities — maybe there is one and I have missed.

Other colleagues have mentioned one-off collections such as those for a sick child. These can be abused as well. We need to look at how to support and encourage a small group of local people who want to fundraise, for instance, in a pub by holding an auction or raffle which can raise substantial moneys, as against a large organisation. The Minister of State might brief us on that. One way to do it would be to incorporate that in the Charities Bill.

Mention has also been made of organisations which advocate for political causes being excluded from the register of charities, and there is potential in that regard.

There should also be a provision to permit charitable trustees to indemnify themselves from personal liability using trust resources. This was proposed in the past.

Some statutory organisations can be included in the register. It is important that the identity of charities as being independent of the State is protected. It has been put to me that some organisations believe that no State-owned or State-controlled agency should be included in the register.

There is a concern that the fees to be paid by charities are to be included in the register and there is also concern about submitting annual returns. Many smaller charities could find it difficult to meet the additional compliance costs associated with regulation and many organisations may face difficulties if these additional costs include fees for registration and for the making of annual returns. That relates to the issue of large charities and small charities.

Another topic I want to mention briefly is related to philanthropy. I note and welcome the establishment by the Government of a forum on philanthropy and that Philanthropy Ireland has issued a number of reports. The culture of philanthropy is not well established in Ireland. One could say this was not a wealthy country up until 15 or 20 years ago and we did not have vast amounts of money to donate. In the United States such a culture is well established. In Ireland we still have a State that looks after people. That is not the case in the United States where the welfare state is not established to the same extent as here and in the UK. At the same time there is an opportunity to encourage philanthropy. The people of Ireland are very generous. The tsunami appeal and other such appeals down through the centuries show that we have always given money, even when we did not have it for ourselves. One way would be to give public acknowledgement of charitable donations, such as the Beacon awards in the UK which publicly recognise philanthropy. Perhaps Philanthropy Ireland will do that.

Another way of encouraging it would be to focus on financial incentives such as lowering the minimum donation eligible for tax relief from €250 to encourage giving at a smaller level. I understand other countries have lower minimum donations. In the UK, for instance, income tax relief is available on all donations made through the payroll. Deductions can be made from pay before PAYE is applied. Gift aid tax has also been introduced so charities can reclaim the basic rate of income tax paid by all donors.

Another option would be to allow donations to be in the form of non-cash assets such as shares or property. Currently all donations must be in cash to be tax deductible. Converting non-cash assets into cash often exposes donors to capital gains tax. The experience in the United States suggests that allowing donations of other assets might encourage philanthropy among wealthy people.

Many speakers have referred to giving VAT refunds to charities. Currently charities pay VAT on purchased goods and services but, unlike companies, cannot claim a refund against VAT collected. The Government claims our hands are tied by EU VAT law but charities insist it is possible. This is an issue the Minister for Finance should examine.

There is another possible way to help charities benefit that is used in other countries, namely, escheatment. This is a process of turning over unclaimed or abandoned property to a State authority instead of to the controller of the assets. The dormant accounts legislation is similar to this system.

Let us suppose the Minister has a small number of shares in a company and he receives a small dividend cheque worth only a couple of euro. Because it is so small he might not consider it to be worth cashing and if he leaves it to one side he could forget about it. That happens quite a lot. One can ask what happens the money and who owns it. In other countries it is handed over to the state through a process called escheatment. I encourage the Government to examine this process as it has a great deal of potential. There are resources out there that could be made available for charitable purposes. This approach is taken in other countries, especially in the United States.

The State could establish an escheatment agency as an independent statutory body. It would require banks and companies to submit periodic returns detailing unclaimed funds. I do not refer to dormant accounts, which is a separate issue. Companies could retain control of these funds for two years and moneys would then be turned over to the State escheatment agency, which would maintain publicly searchable databases to allow beneficial owners to claim assets, subject to adequate proof and payment of a fair administration fee, in a similar way to the way the dormant accounts fund operates.

The Bill could contain proposals to escheat certain dividends from quoted companies. This would provide an opportunity for charities to claim funds and resources. We will probably never have enough funding for charities. This is a well-known practice in the United States. In some states there, the state treasury has strict fines for companies that fail to comply with filing obligations. I also understand the system operates in Australia and in other countries.

The administration costs associated with charitable organisations must be examined. The Bill provides for the authority to encourage better practice by companies in this area. I am concerned at the amount expended on administration by certain organisations which collect a great deal of money for charity.

I will not name the organisation in question, but a number of years ago I was invited to visit the headquarters of a charitable organisation. I was shown into the boardroom which had plush carpet on the floor and a mahogany table among other features. It struck me how well appointed it was for a charity. We must have a balance. I suggest the legislation should set a certain limit to the amount paid out on administration. However, I accept one has to speculate to accumulate. The Bill mandates the registration and naming of people who are professional collectors, which is important. The legislation will require also that fundraising agents and consultants have to be named.

We should examine the area of church gate collections which concerns political parties, including the one of which I am a member. Both Fine Gael and Fianna Fáil hold church gate collections. I am not comfortable with them and I question whether they fit into the charity ethos. If we all stopped doing them they might not happen. When people go to church they should not be accosted by fundraising for political parties. People are happy to donate to genuine charities, but it is questionable whether political parties fall into this category. On the other hand, it flies the flag for a party and people learn about the existence of that party and, in some cases, people take the opportunity to raise issues.

Deputy Deenihan told me he did not have time to refer to his proposal that all charities should publish what they collect on an annual basis and that the information should be accessible. I note that the reports will have to be made available but I suggest they be made available on-line. That is probably a matter for the new authority when it is set up. The notion of making reports available suggests that they would be available somewhere in the authority's headquarters. Who will bother going to that place to find out what a certain organisation collected? If reports are available on-line, everyone can access them and the costs would be minimal. It would probably be a lot cheaper than publishing them.

Members get so many reports from organisations, bodies, State agencies and semi-State agencies, and I have not read half of the ones I received. Publishing on-line should be used more than is currently the case as this would cut down on waste and reduce our carbon footprint. I am sure the Minister of State, Deputy Pat Carey, receives even more documentation than we get and, knowing him, he probably spends most of the night reading them. I cannot get around to reading a fraction of what I receive and I end up having to throw them out because, otherwise, I would not fit into my office.

We need to tighten up on the permit system that is issued by the Garda because it is archaic. The physical permit needs to be far more professional. However, we must be careful to ensure that the permit is not required to be so professional that organisations cannot produce them. We must examine this issue. I am not sure whether the Minister of State has seen the permits issued by the Garda but I am sure he will agree they are out-of-date. As part of the authority's remit, it could address this issue.

I welcome the Bill. It is important that we recognise and acknowledge the work done by people in charitable organisation. Many of them carry out fundraising because for one reason or another the State has not or cannot provide assistance for a specific purpose. We are all aware of cases where money is raised to help parents from, say, Cork whose children are in hospital in Dublin and who have to stay overnight in a hotel or guest house while their child is being treated. Should people be put in that position? They are already emotionally vulnerable having to deal with a sick child and there is enormous pressure on a family in those circumstances. The State is failing in its duty to support parents and families in such situations and it falls back on a local community to raise money to support them. There are areas that must be clarified when the State is failing in its duty and the charitable sector must chip in.

Charities do extraordinarily good work. Deputy Deenihan said there were thousands of charities in the State. Could the authority in some way examine all those charities and, where possible, it could suggest a coming together, so to speak? Instead of ten charities working in the one area and duplicating work, there might be only one. That would cut down on the duplication and administration costs and ensure that more of the funding raised would go to where it is needed.

I wish the Minister of State well with the progression of the Bill through its next Stages and through the other House. I look forward to dealing with it on Committee and Report Stages.

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