Jillian van Turnhout (Independent) | Oireachtas source

I welcome the Minister of State. I welcome the motion and I am supportive of the initiative taken by my colleagues. I agree with the sentiment but would go further and say there is an urgent need to implement the Charities Act to provide for regulation and supervision. I have a concern about the words "resources permit" in the motion because I believe the Charities Act must be implemented in full. I had a genuine reservation about the tenor of the press release Senator Whelan published last week but I note his words earlier in that regard.

I must be frank with the Minister. The delay in the implementation of the Charities Act is not on the side of the charities; it is on the side of this and the previous Government. When the Charities Act was being written, developed and eventually came into place in 2009, I was working in a charity and we, like many other charities I know, undertook a dedicated review of the way we operated. We took legal advice. We amended our memorandum of understanding and articles of association. My heart was broken trying to ensure we fulfilled the requirements in the Charities Act. We examined our financial accounting and our reporting to ensure we fully complied with the Charities Act. We examined our governance structure. We made sure that we were ready for the Charities Act. That was done at a cost to the organisation in terms of time, money and resources, which we were happy to bear for better regulation of the sector. The work we did was replicated by many organisations in anticipation of the Act coming into effect.

The motion refers to "resources permit". I would argue that the delay in implementing the Act is costing the taxpayer money. We are all aware there are organisations on the charities lists availing of charitable tax exemptions which are not operating as what we would deem to be charities under the Charities Act. Proper and effective regulation will see a number of organisations removed from that list and liable to paying tax. In that sense implementation of the Act will pay for itself.

In addition, in the absence of the full implementation of the regulatory provisions in the Act, many charities are being forced to divert their often scarce resources away from front-line service provision. For example, thousands of small charities are forced to incorporate as companies limited by guarantee because there is no alternative source of regulatory scrutiny to satisfy funders' requirements. It is actually costing organisations not to have the Charities Act in place.
The Irish Times recently reported that in the most recent year for which data were available from the now, regrettably, defunct Irish non-profits database - it is a shame that is not in place - 8,000 Irish non-profit companies with public benefit purposes had spent almost €17 million on audit fees alone. For the very smallest of these, where total annual revenue was less than €50,000, this amounted to an average cost of about €1,200, which is more than 7% of their annual turnover.

I am a staunch supporter of disclosure, transparency and accountability across all sectors. I am also concerned when I hear reports about high salaries, commissions and high administration costs in some charities but it is vital - I urge caution to my colleagues - that we do not tar the entire charity sector with the same brush. I have worked in and with many charities whose staff work for modest salaries and others that operate with staff, as they are called, but who are 100% voluntary; they do not receive any payments. I am still involved with a number of charities - I assure my colleagues it is all on a pro bono basis - as are many citizens across this country.

Furthermore, not all of the 7,800 listed charities receive State funding. Some receive none while others, and this particularly irks me, receive multiple funding lines across a number of Departments. That must be examined. Currently, the Government cannot provide one list showing the total amount that goes from the State to an individual charity. To do that one must go through every Department’s and agency's funding schemes. How do we know if the State is funding the same organisation to do the same thing through multiple Departments? Where is the governance?

We are all aware of the decision taken by Barnardos last month to suspend its operations and put its staff on one week’s unpaid leave as a cost cutting measure to ensure it could continue to provide essential services for vulnerable children and families. That is because the fund-raising capacity and environment for many charities is at its most difficult. We have had cumulative cuts for organisations. We can all make small cuts in life but when one has to do it year after year, it gets very tough, and Barnardos is not on its own. These cost cutting measures are being replicated across many charitable organisations.

On some occasions staff in the children's sector have, at their own expense, taken up to two months unpaid leave in order to ensure front-line services are protected. I could provide examples of staff in several organisations who have done this.

It would be wholly inappropriate if we failed to mention the outstanding work being done by charities. I have worked with many organisations and I am of the view that the delay in fully implementing the Charities Act is costing the State money and has the potential to damage the reputation of charities which are operating effectively and have sound governance measures in place. I thank those organisations - Dóchas, The Wheel and the ICTR - which are making great efforts to promote the work of governance within charities. I thank our Labour Party colleagues for tabling the motion. However, greater urgency is required.