Tuesday, 4 February 2014
Charities Sector: Statements
Cuirim fáilte roimh an Aire go dtí an Teach. In recent weeks and months, the charities sector has been in the spotlight for all the wrong reasons. The tradition of charitable giving in this country goes back generations. We are a nation of givers, going back to the people who went out as missionaries all over the world. Our achievements in international peacekeeping are one aspect of this, as well as what we have done to support people far less well-off than ourselves. We did so at a time when this country and its people did not have many resources. In short, the principle of giving is an innate element of the Irish psyche.
There was also an innate sense of trust among Irish people when it came to their giving to charitable causes. Unfortunately, a small but significant element within the charities sector has breached not just the legal trust, but also the moral trust of the public. People have no issue whatsoever with a fair day's wage for a fair day's work. Nobody has a difficulty with persons in senior positions receiving appropriate remuneration. The key word here, however, is "appropriate". What we have discovered through revelations in recent weeks - indeed, recent years - is that significant salaries are being paid in the sector, in some cases well in excess of what even the Taoiseach or the Minister responsible for legislating for the sector receives. There is something fundamentally wrong in that scenario.
When a private, wealth-generating company is paying a chief executive officer a significant salary because that person is leading the generation of wealth, that is reasonable. It certainly is not reasonable, however, for an organisation that generates its resources from taxpayers in the first instance to pay those types of salaries. "Section 38" and "section 39" have become buzzwords of late, but there was very little public awareness of what was happening in these organisations prior to the recent revelations. To have chief executive officers of charities receiving remuneration far above and beyond what is reasonable and appropriate is not acceptable. The corporate governance of charities has been an issue for a long time. In 2009, when the then Government made an effort to deal with these issues, the Fine Gael Party in opposition supported that initiative because it was the right thing to do. My party has sought to ensure that the pathway the Minister is charting is the correct one and that time would be taken to ensure it is so.
That pathway having been decided, it was wholly appropriate for the Minister, in the midst of the emerging controversies, to make an announcement in January of his intention to proceed in setting up a charities regulatory authority. The establishment of that body certainly will help to bring clarity to the situation. There remains a requirement, however, in the coming years, to examine forensically the management of charities in this country, from the smallest organisations to the major players.
There were thousands of registered charities in this country, some with obscure titles. I believe A Pint a Month is the name of one charity. I wonder what it does. Perhaps it does some very good work, but I do not know.
We must have a discussion about and a forensic analysis of charities. There are charities doing the same work as other charities, so there is duplication. That must be examined. If there is a national charity doing very good work, do we need a plethora of localised charities doing the same work and effectively duplicating resources? Certainly, the accountancy element of charities requires forensic examination. Charities are set up as means for companies to be efficient with their taxation payments. Many companies make very generous donations to charity. These are totally legitimate, appropriate, above board and very welcome. They give enormous support to charities. However, others make donations to charities which could be described, in the most charitable language, as somewhat obscure. One would question if that is appropriate, if technically legal.
The behaviour of accountancy firms must be part of the overall conversation we have about charities. I do not believe there should be a differentiation between somebody paying their taxes and somebody putting a euro in a bucket. The money should have the same element of transparency. The ordinary individual's concept of charities is very simple. They want transparency and to ensure that the vast majority of what they contribute is going to the cause to which they have chosen to contribute. At present, as a society we cannot give an undertaking that this is happening. It is happening in many charities, but it is not happening in many charities as well.
It is appropriate and proper that scrutiny has focused on charities. As I said earlier, the contribution of individual citizens to charities should have the same transparency as the payment of taxes. I will be interested in the Minister's response to this debate. Significant progress has been made already, but I consider the progress made to date to be only a starting point. To restore the ultimate and absolute confidence of the Irish people in charities will require a job of work. That job has started and will continue for the lifetime of this Government. I sincerely hope it will continue under the next Government, because it will take a significant period of time to achieve the absolute confidence we need.
I welcome the Minister. He is one of the Ministers who come to this House regularly for debates. Today's debate is particularly important. As has been pointed out by Senator Conway, the charities sector in this country is well supported by the public. It touches every aspect of Irish life. Much of it is not out in the open because of the confidentiality of the work being done.
Senator Mary Ann O'Brien has spoken on the regulation of the charities sector on many occasions and I believe she reflects the view of many people involved in that sector. It is not as if it is an imposition to progress this matter, but it would be at the request of the sector itself. There are many reasons for that, but one of the main ones is a lack of governance. There is lack of governance and there are many concerns about that. Where that exists it affects people who are involved in charities and are doing genuine work. Certain suspicions can be aroused simply because of the perceptions that exist about the lack of governance.
We can be very proud of the manner in which Irish people regularly respond to emergencies at home and abroad. Even in a time of recession, we always seem to be prepared to respond in a generous way. There is a historic background to this because in the past we benefited from similar generosity on the part of others when we were in need. One stand-out instance in this regard involved the Choctaw tribe of native Americans which made a considerable financial contribution during the Great Famine. It must have been exceptionally difficult for the tribe to which I refer to do that. When members of the Choctaw tribe visited Ireland in the past ten or 12 years, they obtained an immediate sense of appreciation and gratitude for their forebears' act of kindness. This was only one instance of the support and assistance Ireland has received when it has needed it. This is one of the reasons our people want to respond to the suffering of others.
The thousands of volunteers who collect money or deliver assistance on a weekly basis go about their business in a very quiet, almost anonymous, way. It does not matter to which organisation one is referring in this regard. It could be the Society of St. Vincent de Paul, which may hear about a family that is virtually destitute and which will, in an easygoing way, make an approach and offer assistance. There is no fanfare of trumpets in respect of such acts. It could also be those involved with meals on wheels who deliver meals to elderly people who would otherwise not eat properly. Then there is the work done by other organisations in respect of families that are obliged to deal with particular emergencies. For example, a loved one may have died abroad and the family cannot afford to bring the body home. The list in this regard is absolutely endless. That is why it is so important to ensure that the work of charities is not undermined, minimised or misrepresented in any way.
One of the most worrying aspects of the recent debate in respect of this matter relates to the fact that the deliberations of the Committee of Public Accounts were similar to those one might see on a television drama. People were, of course, outraged by what they heard. They would have been extremely disappointed by the fact that the money they donated from their meagre resources was not used for the purpose, namely, to help others, for which they thought it should be used. This all comes down to the need for transparency and accountability, both of which must be legislated for. We can draw up all the pious wish lists that we want but the simple fact is that these will not be delivered upon. When the current controversy blows over it will be forgotten to some extent, if not fully. At that point, we will be obliged to start all over again.
I am glad the Minister is taking steps to initiate implementation of certain aspects of the Charities Act 2009. I am also pleased that the Opposition has supported him in this regard because this matter should not be a political football. It is absolutely vital, particularly in view of the current controversies, that answers are obtained and that markers are put down in order to ensure that there will be no recurrence of what happened in the past. In the wake of recent revelations, there is a sense of suspicion and caution among people. If one comes out of one's bank or credit union and encounters an individual selling something on behalf of a charity, one will question whether the money is actually going to go to charity. The position is similar in respect of requests for donations received in the post. I know many people who are delighted to receive such requests. They want to make charitable contributions and they are glad that there are organisations which are prepared to use the money they receive for the right causes and in the right way. People do not resent being asked for donations. However, due to the fact that answers have not been provided in respect of certain questions that were posed - it is important that such answers will be forthcoming - members of the public are wary.
Not only do is there a need for a regulator, we must ensure that said regulator is properly resourced.
In recent years, regulation and oversight have failed. We must not allow this to happen again because we will have no excuse as we will have had an opportunity to examine regulation in other areas. It is vital that the regulator is properly resourced and has sufficient powers. However, we must also avoid building an unnecessary bureaucracy. We know the reasons red tape is introduced. We must bear in mind, however, that there are no question marks hanging over hundreds of charities which are under pressure as a result of limited staff and resources. We must take a balanced approach that does not impose excessive stress on such organisations, especially in the current climate where there is a danger of a knee-jerk reaction. The money people give to charities must be used for the purposes for which it is given and expenditure on salaries and other items should not be excessive. These are givens which should not be questioned. We must also restore confidence in the charities sector. The Minister responded quickly when the recent controversy broke. I hope he will, as a matter of urgency, ensure the 2009 legislation is implemented, especially given that it enjoyed the support of the Opposition and Government of the time.
We have an opportunity to achieve some balance by ensuring we do not paint everyone with the same brush. We must bear in mind the differences between charities, which are good in themselves.
Senators who contribute to this debate do so because they have a strong belief in charity. If it were not available, many people would suffer and slip through the net without fully knowing what has hit them. Let us think of those vulnerable people who benefit from charities and acknowledge those charities which do the work we expect of them.
I thank the Minister for coming before the House to discuss the charities sector and the recent difficulties in which charities have found themselves. The sector includes an estimated 12,000 non-profit organisations, of which 7,000 have charitable status. The combined figure of employees in the sector stands at more than 100,000 and charities also have more than 560,000 volunteers on their books. Their total annual income amounts to approximately €6 billion. All of this presents a logical case for protecting charities and taking progressive action.
The recent scandals which engulfed a number of charities, specifically the charity associated with the Central Remedial Clinic, have sickened donors and the wider public. Unfortunately, they have also had a detrimental impact on charities' ability to fund-raise across all areas. The sector is facing mounting financial pressures at a time of increasing demand for their services. In recent months, charities and groups have had to work with scarcer resources and are struggling to attract new support and funding as a consequence of events which have mired the charitable scene. Coupled with this, many middle and low income households are faced with stagnant incomes, leaving them with less to spend and much less to give. A further demonstration of the effect of this is the fact that prior to the scandals which emanated from the media before Christmas, almost 60% of organisations had experienced a decrease in income in the past three years, while two thirds of non-profit organisations had experienced an increase in beneficiary numbers in the same period. According to Fundraising Ireland, donations to charities fell by 40% over the Christmas period.
Indeed, according to Fundraising Ireland, donations to charities were down 40% over the Christmas period. I know from my involvement in a local campaign with two well-known Irish charities that they raised an absolute pittance. I spoke to one of the regional organisers of an organisation that does great work with the elderly in the west who told me it raised less than €1,000 over a seven-day period. This would have been a pittance to that organisation in times past. Unfortunately, that was all people could muster up over the period in question. This is regrettable in light of the demands on the services in question. If a business were to sustain such a decrease in revenue, it is fair to say it would be faced with closing its doors. Charities, many of whom for the most part provide essential support services for their benefactors, are no different.
There is no doubt that the Charities Act 2009 will play a vital role in ensuring the revival of the charity sector, the effects of which need to be felt now more than ever. The forthcoming appointment of a charities regulator will also be of assistance. It will result in increased transparency and accountability for charities operating in this country. Having spoken to representatives of charities that are based in my local area, I am aware that they welcome this move. It will certainly give people the confidence to start donating again. Given that the charity sector receives millions of euro in funding from the Government and the public each year, it is imperative that the Government, in addition to fulfilling its role as the custodian of taxpayers' money, ensures the sector is regulated and overseen. Unfortunately, we have learned recently that a lack of regulation or enforcement can present the Government and the charities themselves with significant problems. While we are awaiting the establishment of the charity regulator's office, we can ensure wrongdoing is being eliminated in other ways.
I spoke a few weeks ago in this House about a special edition of "Prime Time" that was broadcast before Christmas. It focused on a charity called Victory Outreach, which used pretty appalling practices when dealing with heroin addicts who were attempting recovery with it. It forced those who came to it for assistance to work for up to 18 hours a day to raise funds for it, with daily targets and no pay. The addicts had to give the charity between €80 and €150 every week from their social welfare payments. Victory Outreach allowed service users to go cold turkey, which is not advised by experts who work in addiction. The residents were not given chemical assistance or professional counselling. They were told to use prayer as a way of getting over their addictions. They were also told to stop taking their prescribed medication. This is an absolutely appalling abuse of human rights by a so-called charity, which started working in Ireland in 1997 and operates up to five recovery homes in this country. As it is clearly operating in a market in which supply does not meet demand, it has learned to abuse its special position.
To make matters worse, I understand the Irish courts are referring people who come before them to Victory Outreach. I implore the Minister for Justice and Equality to take action in this regard. I acknowledge and accept that delicate issues relating to the separation of powers arise in this regard. Somebody somewhere has to stop this practice from going on. While addiction services that are funded by the HSE are required to meet minimum standards, Victory Outreach is not funded by the HSE, which means there is no provision in law for the regulation of its residential treatment or rehabilitation centres specialising in addiction. It is most regrettable that organisations like Victory Outreach are allowed to operate outside standard practice. The charity's much-maligned practices were highlighted recently in the charity's US organisation, where a contractor was paying illegally low wages to workers from the church, as it calls itself, to renovate hotels. I am fearful that its lack of morality and scruples might cause Irish service users to be subjected to the same or similar treatment or human rights abuses. For that reason, I ask the Minister for Justice and Equality to look into this operation and take whatever action he considers necessary to protect those who most need to be protected.
I am a fervent supporter of the great work done by many charities in this country. I try to make whatever impact I can by raising funds for a number of them. I recognise the important role that Irish charities play at local, national and international levels. As a public representative, I have engaged with many charities and their services on behalf of my constituents. Their readiness to help and their impact must never be under-estimated. They are of critical importance to every small town and village in this country. Their tentacles stretch as far as delivering services in health, social services, education and emergency relief. From an international dimension, we must not forget the part Irish charities play in keeping Ireland's international reputation right up there among the most benevolent countries in the world. Two and a half years ago, I was lucky enough to travel to Ethiopia as part of an Oireachtas delegation. I got to see the work being done by some of the fantastic charities that are being funded by Irish Aid. I have first-hand experience of the work of this sector throughout Ireland and in sub-Saharan Africa. This cannot be underestimated when it comes to alleviating crises in war-torn and hunger-ravaged countries.
Some people have spoken here about the Charities Act and the fact that it will ensure greater accountability for charities, protect against the abuse of charitable status and fraud and enhance public trust and confidence in charities. These are all very important reforms, not least because charities constitute a sector in Irish life that suffers from a high degree of mistrust on the part of the public as a result of the scandals that unfolded recently. In the absence of the enforcement of the legislation, we may well have contributed to usurping the trust that has been built up between the public and charities. I know this legislation was drafted well before the Minister came into office and certainly the recession and the difficult economic times in which we found ourselves made it very difficult to make any real progress in this area. To that end, we must ensure that the entire sector and the goodwill it attracts from the public are not decimated as a consequence of any further financial scandal raising its ugly head. That is something we should be keen to avoid so that all genuine charities, of which there are many, that are working very hard for their respective causes can continue safe in the knowledge that their sector is properly regulated and free from such risks. It is vitally important that we uphold the highest possible standards when it comes to charities so that they can benefit from their own high standards and the trust of the public as a consequence.
While I have focused up to now on the pioneering rules about to be enforced, I take the opportunity to acknowledge and laud the great work being done by organisations such as Dóchas and The Wheel among others who have endeavoured to voluntarily change the standards applicable to the not-for-profit sector. They have shown great initiative in their own individual endeavours and the spearheading of a governance code for community, voluntary and charitable organisations is indeed a wonderful feat. While their efforts go some way towards initiating a charter for charities, it is imperative for us as a Government to help complement their efforts without delay.
I welcome the opportunity to contribute on this issue and hope some of the issues raised by me and other group members will be taken on board by the Minister. It is imperative that the Government and the not-for-profit sector work together in solidarity to achieve the same goals of transparency, accountability and value for money. That is the only way we can all move forward together. I take the opportunity to welcome visitors from Rotary Ireland who are in the public gallery today. I had the pleasure of speaking with them earlier. I wish them well in all they do.
I welcome the Minister to the House this afternoon and thank Senator Ó Murchú for his kind words. I entered this House having had the experience of setting up a charity and the parallel experience of having a business. As the business grew, I understood that corporate governance was very important and necessary, although I have put on the record that it was a very boring, part of running a business. I published this report and met with the Minister on a number of occasions in February 2013. We had a debate last May. I again acknowledge the meetings I had with the Minister and his excellent team headed by Úna Ní Dhubghaill and all the work they have done. We knew the regulator was on the way, unfortunately as it has turned out, too late.
When I was researching this report, I visited the Office of the Scottish Charity Regulator, OSCR, as well the English regulator in London. Even though they have been in the media recently following our own scandals and have made statements about how awful it is for Ireland, Scotland and England had their own scandals even after the regulators were set up. OSCR is the one towards whom we need to look. Scotland has a very similar sized population although OSCR has 23,000 charities to look after and 23 employees. It can be done quite cost effectively.
The Minister for the Environment, Community and Local Government launched his code of good practice in July 2012. That was definitely a case of putting the cart before the horse. Charities were asked to sign up to the code of practice about leading their organisations, exercising control, being transparent and accountable, working effectively and behaving with integrity.
We have 7,000 charities with 100,000 employees. Eighty charities have signed up to that code of practice with a further 80 pending signing. I look forward to the Minister's response. I hope he will expedite the establishment of the regulatory body. I refer to my report and I am convinced that the regulations need to be doubled in strength, a case of belt and braces. We do not want to have a system full of red tape but unfortunately the damage has been done by the awful practices in the CRC. I do not understand why Rehab is waiting for a board meeting before the chief executive officer can divulge her salary. For goodness sake, what is the great secret?
I was aided in doing my report by very able accountant colleagues who know all about this wonderful world of SORP, statement of recommended practice, and which must be implemented in Ireland. Every charity must take on this practice. It is a consistency in accounting treatment, policies and principles so that the accounts of all charities will be similar and international best practice is adhered to. To my knowledge, SORP stipulates that the information about the salaries of any worker in a charity paid more than €75,000 - from the CEO to the man with the bucket on the street - must be transparent. Increments of €10,000 over €75,000 must be recorded as public knowledge.
I hope the website will be simple and easy to navigate. I am 53 years old and I am not very familiar with social media websites. I want the website to be idiot-proof. I want to be able to find the charity I am looking for and be able to see immediately that, for example, 65% of its funding comes from Government and the remainder from fund-raising. I want to be able to see how much goes to administration and marketing and how many executives are earning more than €75,000. Such a system would enable the public to trust charities again because as a previous speaker said, 99.9% of charities are wonderful. We are all passionate about this sector which has 560,000 volunteers and has €6 billion to help the most vulnerable in our society. However, we have lost a lot of ground with a 40% drop in donations since the scandal began.
Money must be expended to fund education and training. In my report I talk grandly about corporate governance but I intend to attend a course in corporate governance. Anyone involved in a charity, big or small, needs to attend such a course. Officers of charities should be trained in corporate governance. I may sound like I am whining at the Minister but I am convinced of the need for a belt and braces approach. There cannot be enough transparency.
I attended a wonderful ITCR conference in the Aisling Hotel. It was planned to establish the regulator this August and perhaps the Minister will say it will be established earlier now. It will be a difficult task to establish a regulatory system and to have the boom-boom effect that I am asking for. More resources will be needed as quickly as possible. I suggest there should be training for board members and management teams. I suggest the regulator should host a micro-website with information on corporate governance and SORP.
I fund-raise actively with my husband and we have no shame. We look in America and anywhere there are people with money. However, following the scandals, there is huge resistance from the giant philanthropic funds or the large multinationals because they adhere to their corporate governance code and would be greatly concerned if they were to get any little wobble in that respect. We have had a national wobble here and we need to correct ourselves because the real money is with those and we would not have to go to members of the public who do not have the money to give at this time. The big boys, as part of their corporate responsibility, which is part of every business person's need, will ask about one's corporate social responsibility. If my little business was talking, as it were, to a multiple in England, that multiple will ask me about my corporate social responsibility and I would set out my corporate social responsibility tactics within the company and our plans for the year. All companies want to give but we need to know that those to whom we give are running their charities in a responsible and good way. I look forward to the Minister's reply.
I welcome the Minister to the House. As other Senators have said, we are all concerned about recent disclosures regarding charitable organisations, with one in particular having captured the headlines and having undermined confidence in a serious way. We all share a concern about the impact these revelations are having on charities. We saw in the run-up to Christmas that donations were markedly down, by 40% as Senator Mary Ann O'Brien said, and I would say they are down by at least that, even though some charities have not had anything to do with the recent disclosures.
We need an increased level of transparency and accountability in the charities sector. The Charities Act 2009 provides for a system of regulation for charities and at the heart of this Act is the creation and support of strong trust and confidence in our charities. This is needed now more than ever. Charities welcome the establishment of a regulator as much if not more than everyone else in society. The phased introduction of the Charities Act is necessary, as is another measure, which I have discussed in passing with the Minister on a few occasions, namely, the need to consider the establishment of a charity quality assurance mark above and beyond that. That would operate as a guarantee that a charity adheres to a high standard of transparency and accountability while spending a low amount, say, less than 20%, on administration. Such a simple mark would encourage those who do not have time to research their charities thoroughly to give with the agreed assurance that the charities adhere to the necessary principles of transparency and accountability and that they would be able to gather that information at a glance. I am thinking in terms of a type of Guaranteed Irish logo for the charity sector, which would immediately indicate to the public that the charity is adhering to the proper regulation, for want of a better word. A person would be assured with one glance at the logo. It is natural that it would have to include the full disclosure of salaries of senior staff, to which Senator O'Brien referred. The idea that the chief executive officer of a charitable organisation can get away with not disclosing his or her salary while calling on others to do so is the height of hypocrisy and is exactly the type of thing that undermines the confidence and faith the people place in charities when donating.
The Charities Act provides for a new regulator to be established for the charities sector and the Minister has indicated he will put an interim regulator in place very soon. The charities regulatory authority is to be an independent State agency charged with the registration and regulation of all charities operating in Ireland. The establishment of this body is essential to the full roll-out of the Charities Act and I am glad to see that going ahead. While I understand the establishment of the regulator as envisaged in 2009 had to be curtailed due to economic necessity, I am on record as having called for its establishment in 2011.
I suppose we all wish that could have been done at the time. The Minister's commitment to this now is commendable certainly in the context of recent developments.
The Charities Act is important legislation as for the first time it defines "charitable purpose" in law. It provides for comprehensive statutory regulation of charities and establishes the legal basis for a significant increase in the information about charities and their affairs to be made available to the public. For reasons of cost it was no longer possible to implement the Act as originally envisaged and yet we have never proposed the repeal of the legislation, such is its importance. Such a move would not represent an advance in the regulation of the charities sector. Instead the Minister has put great effort into finding the best way to bring key measures of the Act into force in a way that does not involve unsustainable expenditure on the part of the State and yet is capable of delivering a demonstrable improvement in the regulation of the sector. In this sense I believe this solution is very workable and practical.
In recent weeks we have heard a series of disturbing allegations about the use of charitable donations by different organisations. The details of these have been the subject of considerable examination in both this House and the media, and have caused concern among the public, making our work all the more urgent. It is vital to restore confidence in our charities sector. Future donations depend on it and the future of the sector depends on it. Therefore the vast majority of charities welcome it. Historically Ireland has been one of the most charitable nations in the world and we punch well above our weight in this regard. I would hate that to change as a consequence of recent revelations. The new system of charities regulation provided for in the Charities Act will be very important in remedying this. I commend the Minister on his work.
I welcome the Minister to the House. I am delighted he is here because I know he is a good listener. He has had the opportunity to listen to some very pertinent points, particularly by Senator Mary Ann O'Brien, whose experience is very useful.
I have been a Member for 21 years. When I first came in here, I said to the people in charge of salaries that I would like to consider donating my salary to charity. However, I was advised this was only possible after the State had got its share. There is a lesson here if the State always lets people know it wants its share and is not willing to let individuals take all of what they are due because it wants to do that itself. About ten years ago there was a bit of a fuss because some very high-income people were paying very low tax rates. The State understandably decided to prevent people from using those tax-efficient measures to reduce their tax and to require them to pay a minimum tax. However, the State included philanthropy in that list of tax-free systems. In other words the State prevented high-income people giving their money away, as it wanted its share first.
I believe the State has a duty to do something about that itself. Everybody in this debate is pointing out how generous Irish people are which, of course, we are on a personal basis. The United States also has a very high number of donations, but people are not required to pay tax on philanthropic donations. It is up to the State to pay its share on what we are going to do here. Clearly there are some scandals and we want to ensure we overcome them. However, on the other hand we need to ensure the amount we give to charities is also encouraging people to do that.
I welcome the debate. Further to the Irish Water scandal and the secrecy regarding charities and semi-State bodies, I believe there is a need for much more transparency. For several years, I have proposed that we have a public website based on the United States model allowing the public to see at a glance where every cent of taxpayers' money is being spent, whether on roads, charities, salaries of public servants, contracts or debt.
Probably for obvious reasons, politicians do not want this type of transparency. I believe we will have no choice but to move in this direction as the public are unsatisfied with the status quo.
I recognise that the Minister of State, Deputy Brian Hayes, has established the Ireland Stat website but that is not the type of website I have been calling for. It merely shows some well-known figures on exports, for example. What we need to show is exactly where every cent is spent, including spending on charities and the salaries of those employed by charities.
We have been raising the issue of the need for a charities regulator for a long time in the Seanad and I am pleased to note that the Minister is able to move on that now. A charity register is a good idea as well and I have before me a description from the United Kingdom Charity Commission's website of its system. It refers to how the website shows key facts about the work and finances of every charity such that a viewer can see at a glance whether a given charity is up to date with its report and accounts. This information is good for the customer and I believe we need a similar system here. Transparency in charities can help to increase much-needed revenue, which has been falling since the crisis, as we have heard today. Given that the State gives so much money to charities, there should be far more impetus on the side of Departments to audit the accounts of charities and to examine charities from a business-oriented perspective to analyse their efficiencies in reaching their targets. We need to know the impact of a charity's work as well and we should examine the work of charities more like the way in which a business in the private sector would measure itself. At the same time, the private and not-for-profit sectors can play a role in making charities more transparent and efficient. The situation in other countries is worth noting as well.
Some years ago, the Minister for Health told me of the problem of the number of quangos which were spending Government money and their own money. One particular case involved three charities in one town doing the same work. Each had their own public relations department and each came to the Minister to make an appointment. That simply does not seem to make sense. I know the Department and the Minister did their best to overcome that.
In the United States, there are websites such as that run by the non-profit organisation Charity Navigator, which I came across some time back. It evaluates charities in the United States, rating them on a 0 to 4 basis. Could we operate a similar system here? It provides an in-depth analysis to the customer or the person who is donating. This type of charity rating is worthwhile.
In the case of the salaries of the chief executives of charities, which has been part of the discussion, there is a good deal of murkiness. In particular, a report emerged last year stating that four charities, which shared millions of euro in State funding each year, had refused to reveal how much their chief executives were paid. That has been touched on in the House today. While more transparency will, I hope, mean more donations in the long term, I believe some charities should get away from the murkiness that surrounds them as it has probably given them many problems.
I wish to address the matter of business and charities. As someone who was in business for many years, I know that working with charities can bring benefits to businesses which are not always recognised. Our company decided only to sell bread that was four hours old. This meant we had to give away a good deal of bread every night and charities came along to collect it. This was a real win-win situation. I seldom use the word "accountant" without an adjective, not necessarily a bad adjective, but the accountants could not understand it. Anyway, it was actually rather good for business because it meant the bread was fresh and people drove past other supermarkets to come to ours to get fresh bread. It also meant that charities benefited. There is a major opportunity for businesses to get involved with waste food. We have had some debates in the House on food wastage and we can do a good deal more.
Another point relates to the crowd funding of charities. Crowd funding is a great system in the United States which is now in Ireland as well. I am involved in one group - I am declaring my interest - called Link Finance, in which local people and others make small contributions to a business.
It greatly helps the business and it is a way of being able to help. It does not have to be a charity as such, but it is a wonderful way to encourage businesses to set up with the help of the local people in that area.
I believe we can do a huge amount here. I have raised the following example before, but it is worth highlighting again. In the US, there is an organisation, DonorsChoose, which runs a website that allows people to give to projects in American schools. It would be worthwhile if the Minister's people can look up the website, donorschoose.org. The organisation collects proposals from teachers and makes them available to public schools through its website. I believe it is the kind of thing that can help schools a great deal, because people can see what is being done, whether it is worthwhile making a contribution, and it encourages extra giving.
I am delighted the Minister is here today. It is good of him to attend this Chamber, but he is also a good listener. I hope he gets some benefits from the wide and varied discussions that we are having here today.
It may seem like that, but it will not be.
I thank the Leader for arranging this important topical debate on the charities sector, and I would also like to thank the Minister, Deputy Shatter, for being here this afternoon. I would like to add my congratulations to Senator Quinn on his 21st anniversary in the Seanad. As he was delivering his speech, I thought about the wisdom that he has brought to this House. We have all benefitted from his many wise and wonderful comments, and his help to all of us who have recently joined the Seanad.
Revelations in the charity sector have hit the front pages of our local and national newspapers in the last few months. The explosion of the Central Remedial Clinic top-up payments and the remunerations scandal have been very damaging to the sector, along with the lack of transparency at Rehab. Just today we got another comment from the chief executive of Rehab, stating that the Department of Justice and Equality did not have a right to dictate how Rehab spent its lottery scheme funding received from the Government. Rehab has received over €32 in respect of the lotteries fund in the last seven years, yet it baffles me that it appears to feel no obligation to the State which allows these funds to be provided, and the people from whom the money was raised.
When people take money from their pockets and give to a charity, they rightly expect such money to be used on the people which the charity service supports, and not to be spent on advertising, annual reports or staff vehicles. People feel that they have been misled because they never thought their money would be used for anything other than helping people. Even those who did not donate to these charities feel apprehensive and hurt by the revelations in recent months. There is a definite wrong perception and misinterpretation as to what charitable organisation is about and we need to look at that. Our day-to-day interactions with charitable organisations typically involve the person who shakes the can in front of the local shop, or the group that heads off to Africa to help build schools or provide supplies. These are charities, but charities are also the groups that provide services to those with disabilities, services to the elderly and services to disadvantaged children. There are many of these charities here at home who provide a large portion of the services in the disability sector.
Since entering the Seanad over two years ago, I have called for clarity and transparency with service providers in our region, who are supplied with considerable public funds. I have made numerous verbal and written submissions to local providers, asking for financial accounts and statements, with queries on them. My requests have unfortunately often gone either unanswered or only partially answered. I have found the lack of transparency at a local level very surprising in the last two years, which unfortunately meant that when revelations broke about the CRC and Rehab, they caused me to be less surprised than others.
Irish people are known for their generosity and charity the world over. We provide support to the groups at home and abroad almost blindly, as we believe fervently in the charity that they provide.
I believe we are being reminded of times gone by. It is time to change the culture of those in charge and recognise the accountability towards the public. Charities, the HSE and service providers should have nothing to hide and should provide information, as stated today, on the valid and important questions we are asking here today and which the public has been asking since before Christmas. I call on all of those charities and service providers in receipt of public funding to provide their expenditure in an itemised fashion on a website as stated by Senator Mary Ann O'Brien.
I work and have been involved with many people in a charitable organisation who are now reaching the latter stages of their lives and who find it hard to find the website. It should, therefore, be user friendly. All of this money and every cent of public money should be accountable on the website. One should be able to log in and click on administration without getting headings such as "Miscellaneous" showing vast sums of money. Every cent should be accounted for. We are owed nothing less. Members must know where every cent of the funding goes.
Some within the Irish sector should take a page out of the Salvation Army's book. I read recently that its chief executive in the UK earns £10,500 sterling, with £10,258 sterling in benefits and still manages to run a top organisation, centred on charity and the people for whom it provides. We have to wonder if the sector has lost the run of itself at the upper level, because huge work is being done. Some 99.9% of the charities are doing excellent work. As a public representative and a private citizen I should not have to chase down facts and figures, and nor should anybody else, on the expenditure of public moneys as I have been doing for more than two years and still be left asking questions. I will continue to call for transparency at local and national level. I look forward to the appointment of the charities regulator before Easter.
I have worked with charitable organisations for many years as have many people here and I know first hand the impact the revelations of recent months have had on charitable giving and the damaging psychological effect it has on those involved in the sector. The grand troops in charities have been left to bear the brunt of the decisions of those in places of responsibility. I encourage people to continue to give to these charities. We have other well-funded organisations who work overtime to restore the faith of the people and provide the transparency we all deserve. The front-line people who are working in these charities, the nurses who are helping to provide for respite, those who cook dinner for disabled people in day services, give way above and beyond what their job entails and they are suffering as well.
I hope not to use all my time. I agree with what my colleagues have said, so I will not repeat, in particular, what my colleague, Senator Mary Ann O'Brien, has said. It is important to instill confidence and trust and also that there is ease of access to information. Senator Feargal Quinn gave us some examples from the US. I wish to pick up a point raised by Senator Mary Ann O'Brien in regard to the use of SORP and compliance and the proposal that all salaries above €75,000 be declared. We have had a huge focus on chief executive officers. I have seen organisations finding a way to skew this by employing their chief executive part-time but having other officials within an organisations at much higher salaries on a full-time basis.
I wish to add to what Senator Mary Ann O'Brien said by proposing that we would know all salaries above €75,000. When I talk about salaries I am talking about the remuneration package, any health insurance benefits, pension benefits and anything extra, such as cars, that are not in the normal cut and thrust. I would also like to know how much time that person is giving to that job, whether it be 100% or 50%. In that way we should know pro rata what is their salary. We have seen organisations appear before various committees which have worked only part-time for a public service and part-time for a private service and yet seem to be able to get a multiple times salary for that work.
I am somewhat concerned over the use of the term "charity", which is being used quite broadly. My real concern is over the use of public money and how the State is funding organisations. Regardless of whether an organisation is set up as a private company or a charity, I want to know that that public money is going to good use. I want the same scrutiny to apply to them and I do not want a public company to hide behind company law and claim that as a public company it does not need to declare this.
I have a concern where the State is funding 100% or 90% of some services. In those cases should the State not run the service rather than it being called a charity? I believe there is an historical legacy for us here. We have organisations which started with really good purposes - traditionally religious organisations providing services mainly in the medical field. They have now professionalised and are running organisations with multi-million euro budgets. However, if we question their work they will rely on that historical legacy to get them out of trouble. I have a major issue with that because the same yardstick should be used regardless of the service provided. There is an issue with the State funding some organisations which historically get an increase of 2% or a reduction of 5% on the previous year. It is just up or down with the normal trend and all organisations are dealt with by way of the same measure. There is an issue where no tenders are sought and no responsibility on the State to outline what service it is expecting for its money. Let organisations come in and bid to provide those services.
Did the Minister know that the new Child and Family Agency will fund 700 organisations? I still do not know what all those organisations are. We have a responsibility and we have an opportunity to change it.
The Minister is moving as quickly as he can on the issues of the regulator and the board. While the regulator needs to be resourced it needs to be given the teeth such that if it has a concern it can address it. I have come across statements at committees or in the media which I have read repeatedly and tried to understand what they are telling us. It is like a secret code and it is necessary to parse the words. I still do not know if I understand what they are telling us or if they are telling us the truth. When the regulator is set up, some organisations will rush to compliance, but I am worried about agencies that believe they will swing around to compliance or use such terms. If the regulator is not getting the information it needs about these organisations, we need to be sure we will be able to back it up.
I totally agree with my colleagues and simply wanted to add those comments.
I welcome the Minister to the House and I welcome his decision to commence the provisions of the Charities Act by appointing a board and an interim CEO, and having staff in place by Easter, which is an important step in this area.
When we came back here in August 2013, for some reason I started getting phone calls from people complaining about moneys being paid to a number of different organisations in the middle of August. Obviously members of the public had concerns for some time. On foot of those phone calls I submitted questions to the HSE and the Department of Health. I hope the replies I received do not indicate how we will do business in the future. I asked the following: if the full details of the salary of senior management and chief executive officers of these voluntary hospitals and organisations were disclosed to the HSE and the Department of Health; if the payscales that applied were similar to the payscales for an equivalent position in a HSE hospital; and if in addition to salary, which was paid to these staff in hospitals and voluntary organisations, the HSE or the Department of Health was aware of any other remuneration being paid.
The response I received in October before the story broke confirmed that they were aware of irregularities, but for some strange reason were not prepared to disclose them to the Oireachtas Joint Committee on Health and Children. However, within a very short period of time they were prepared to disclose them to the media. I hope this does not set a precedent for future genuine queries with Members of the Oireachtas being the last to be told. When the structures under the Charities Act are set up, I hope that it is not only available to Members of the Oireachtas but also to the general public, without the necessity of submitting questions.
The reply indicated that the payscales developed over many years on an agency-by-agency basis and did not necessarily reflect the comparable size, scale and complexity of each organisation today. It indicated that the matter was currently being addressed jointly between the HSE and the Department of Health with a view to bringing the pay rates of section 38 agencies into line with Department of Health salary scales and that a pay policy would issue shortly in that regard. In 2012 the HSE clearly stated that section 39 agencies should not exceed the payscales that applied to the HSE. Here we are two years later and we still have not received clarification.
Follow-up questions on one of the organisations that is not disclosing salary details were dealt with on 16 January. The HSE, as part of the service-level agreement process for 2014, will require all funded agencies to disclose senior management remuneration and will have systems and processes in place to oversee compliance with respect of each funded agency's service agreement. If the service-level agreement for 2014 clearly sets out the need for full disclosure, why is there still reluctance to making the disclosure at this stage? Do we need to wait for another three months for the agreements to be signed before there is full disclosure? When will the HSE release that information to us?
It is interesting to note the scale of the funding that is taxpayers' money. The reply clearly set out that more than €100 million was being paid to eight different organisations. Between €50 million and €100 million was being paid to four organisations. Between €10 million and €50 million was being paid to 36 organisations. Some 131 organisations are receiving between €1 million and €10 million. That is a lot of money and Members of the Oireachtas and members of the public are entitled to know how it is being spent. We are entitled to know the information that, based on the 2014 service-level agreement, section 39 organisations are now required to reveal, which is very welcome.
However, it also raises other questions. HSE funding to 2,680 organisations now represents 25% of the health budget. Why have we now become so reliant on organisations to provide services in which the State should be far more actively involved? How do we work towards achieving efficiencies by amalgamation of some of these agencies? Will we get better value for money for that? Those are issues we need to address when looking at this overall area. The debate is not just about the implementation of the terms of the Charities Act, but also about getting value for money for the taxpayer in the long term.
I welcome the Minister to the House and I wish him every success in fast-tracking the proper regulation of the charities sector, in particular by implementing the 2009 Act introduced by the then Fianna Fáil-led Government. At a minimum, the public deserve to know where their money is being spent and that it is being spent correctly. Most of those who have spoken today are ad idem on the need for accountability and transparency, traceability in terms of where all our hard-earned money goes, to which charities it goes, and how it is spent.
We need to move to address the fundamental problems in the corporate governance of these bodies. Like my colleague, Senator Ó Murchú, I compliment Senator Mary Ann O'Brien because she has raised the matter in the House before. She seems to have a great understanding of the difficulties in the charity sector and the need for proper governance. Sometimes when people raise issues in the House, as I do occasionally in respect of the fishing industry, it goes unappreciated.
When our party passed the Charities Act in 2009, it represented a milestone in the development of the regulation of the sector and a major leap forward at that stage. However, recent events have propelled the matter forward and we are now at a stage where the Minister and the Government must implement the Act and ensure full and proper transparency. The original purpose of the Charities Act was to reform charities law to ensure greater accountability, protect against abuse of charitable status and enhance public trust and confidence in charities by ensuring increased transparency in the sector. We should also realise that in the past 20 years charities seem to have blossomed. No matter which way I turn nowadays, there are charities. When I was a child, there were only one or two charities and normally we would throw in a few pence for African children. That was the thrust of it. Now, we seem to have charities everywhere. I have no problem with that provided they are properly regulated and controlled.
Last year, I embarked on a walk for a charity called Féilecáin because it had a personal interest for me. It offers counselling for women who have had stillbirths or who lose babies born prematurely who do not survive. The organisation does wonderful work and I had first-hand experience of how it operates. It is probably one of the lesser-known charities. A situation presented itself to my family and the organisation did a wonderful job. I was pleased that I walked 13.5 miles and raised between €1,200 and €1,300, which I handed over to the organisation. It is only a small story but often I wonder when we contribute to the various charities where the money goes and how it is spent.
The other point I wish to raise with the Minister, without going over ground that has been covered by other speakers, is the regulation costs and the independence of these charities. I realise the Minister is setting up a regulator and a board. I understand in Northern Ireland at the moment the charities regulator costs close to £1 million per annum to run. I hope this will not be a further burden on the State. Charities that are registered should pay €100 or €200 per year depending on their size. Some of the larger charities could pay €1,000 to ensure that the cost of running the regulator or governance body for proper regulation is covered. Such an organisation should be self-sufficient in so far as it can be. It is a major expense but it is worthwhile, having regard to what we have seen coming out of some of these charities. If investigations must take place, whether initiated by the HSE, the Committee of Public Accounts or any Government agency, it is only right and proper that people know where the money they contribute is spent.
In Ireland, there is a vast spirit of generosity in our psyche. I have no doubt that in any of the countries in the world where a person travels he will not find as generous a public for contributions. Some of the people I see contributing have little to give, but they give anyway because they believe they are providing help to the less well off in society and that is what charity is all about.
I wish the Minister well. This topic is far bigger than party politics. It is a major issue that must be examined in a global context and we must get to the bottom of it. If we do not and if we do not grasp the nettle and rid ourselves of the rot that may have set in among some charities, the innate charitable spirit in all Irish people will be lost. We must ensure that does not happen because, if it does, society as a whole will suffer and those most vulnerable in our society will probably suffer most.
I, too, welcome the Minister and thank him for coming to the House in a week when the schedule of the House has been curtailed to one and a half days. It is an absolute disgrace. There are many subjects that Members would like to debate and on which they have called for debates, such as flooding, which occurred again at the weekend, and other issues. It is important that we say as much. The House is available for work and we should be allowed to do our work.
Having said that, I thank the Minister for coming to the House because he has shown a great interest in this issue. We had a debate on it, which was led by the Labour Party group and, in particular, my colleague, Senator John Whelan, in September 2012. At the time we pointed out and predicted many of the things that have since come to pass. At the time, Senator Whelan said that by not setting up the regulator we would be penny wise and pound foolish, and so it has turned out.
A total of €3.5 billion per year is provided by the State to charities and the overall budget of charities is €6 billion per annum. Yet we see the disgraceful situation whereby the chief executive of Rehab and her staff have refused to tell the Irish taxpayer what they are getting paid and have refused to tell us, the investigations led by the Minister aside, where moneys are being expended and spent. We also have the disgrace involving the Central Remedial Clinic. Again, that has raised a cloud and genuine contributors to the organisation have been confused by the refusal to reveal where money is going. What we have is a gravy train in some of the charitable organisations, but not all. There are sweetheart deals for people who have set themselves up not as people to support charities or the needs of people who are involved in various organisations, but as leaders of hierarchies to feather their own nests. They are on ridiculous and scandalous salaries. There get bonuses and expenses and they are organising their own redundancy and retirement packages.
It should not go unsaid, however, that there are some fantastic charities in the country. Everyone in the House is involved in charities in one way or another. We have all been reared to do so and we take great pride as Irish people in the work we do. One need only have seen the report on the television news last night about the people of Limerick for confirmation of this. They flocked into the local community centre to help their neighbours and to provide food for people who had no kitchens or facilities.
It must be said as well that there is currently no clarity or transparency in the system that purports to represent charities and charitable organisations in the country. Therefore, I welcome what the Minister is doing in this legislation, that is, bringing forward a regulator and doing so in the coming months.
I have a question for the Minister on the number of directors that will be appointed. Can the Minister give us some detail and comment on how these directors will be appointed and what qualifications they will require? Before anyone is appointed, we need to be clear that these people are equipped for the job and that their bona fides stand up in respect of what they will be doing and how they will marshal and patrol this sector of society. Too many people in the country are in the golden circle and too many people are appointed for the wrong reasons. As I have already stated, this is a €6 billion enterprise in this country. A total of €6 billion per annum is expended and we must ensure that when the charity regulator and the associated directors are put in place, they are doing the right job for the right reasons.
I have another question for the Minister on the registration fee. I believe it is envisaged that all charities will have to register. Will the Minister give some clarity in respect of how the fee will be arrived at? Will the ratio be based on the expenditure of the organisation? Will the Minister consider bringing that in halfway through this year rather than waiting until next year? There are 8,500 charities in the country. Most of them receive money from public funding and from donations from people. It is imperative that when the Minister puts in place the regulator all charities are required to be transparent and that clarity in what they are doing is uppermost.
Many members have mentioned how this will be done and I will not repeat it but at the end of the day, when a person hands money into a charity, he or she needs to know how it will be spent. In simple terms, that is what we need to see from this process.
Again, I thank the Minister for coming to the House.
I join previous Senators who commended Senator Feargal Quinn on his 21 years in the House, and hopefully he will serve many more. I also join Senator Denis Landy in expressing my disappointment that the House is not sitting on Thursday. The Leader said the House will possibly not sit on the next two Thursdays because of the failure of legislation to come before the House but also because some Ministers are not prepared to come in for statements on important issues. I commend the Minister who is present and who has come into the House on a range of issues and at any time he has been asked. Unfortunately, that is not the case with all Ministers. We, as Senators, will get it in the neck again for not sitting through no fault of our own.
That is deeply unfair on Members who want to turn up for work and do their job.
It is important that we have this debate, even though it is only statements, and that we are given the opportunity to reflect on what can only be described as the scandals of recent weeks in respect of charities. Like so many issues in the State, it takes a scandal to drive the political machine to do what it should have done many years ago. That is the reality. Since the foundation of the State, charities have been unregulated. We have failed to deal with the issue simply because they were charities and people were afraid to speak out on topics such as salaries, top-up payments, bonuses and the need to regulate the sector in the first place. I believe that has done untold damage to charities and, more important, to the people who depend on them, who are the primary focus of all of us in this House.
Senator Denis O'Donovan mentioned the shiny piece of legislation the Government of which he was a member introduced in 2009 that promised to regulate the charities sector. He hailed it as significant, and it was in terms of it being a Bill that was enacted. The problem was that it was never delivered upon and was never implemented either by the previous Government or this Government and we are three years into this Government's term of office. The Labour Party and Fine Gael have had almost three years to rectify this but instead they rested on their laurels. It was only in the aftermath of the scandals of recent weeks that the Minister has acted and agreed to the establishment of a regulatory authority. Unfortunately, the failure to act on this issue has been part of the scandals we are witnessing. Despite the fact that it is welcome and certainly a step in the right direction, the establishment of a charities regulatory authority by Easter is simply not enough. We have to implement in full the 2009 Act and do so as soon as possible.
It is also important to point out, as we discuss the charities sector, that the most vulnerable in society are already suffering massively due to the unfair and unjust cutbacks which have been implemented by the Government in the past three budgets. In its analysis, the ESRI has pointed to the most vulnerable and low-paid workers and people on benefits and welfare who have disproportionately borne the brunt of those cutbacks. They are the people who depend on charities. As a result of the failure to fund many schemes and benefits which were previously funded by the State, they are turning to charities to meet basic needs such as sheltered employment, educational provision, training, recreation and food. How many Senators have had people in their clinics who cannot afford to put heating oil in their tanks or pay for food, an electricity bill or a gas bill and have turned to the Society of St. Vincent de Paul or some charity for help? I am sure every Senator has, at some point, come across families who have found themselves in that position. That is because of the policies the Minister and his party have put into action. In my view, the charities sector is filling a gap which in the era of the welfare state was the responsibility and the concern of the State. It is the poor, the disabled, the vulnerable and those groups who depend on charities for services who suffer most when people do not give to charities. We have had, on the one hand, a whole raft of cutbacks in benefits and services which these people need and, on the other, the potential damage caused to the charities sector, which cannot provide the service it could provide in the past, by a small number of charities. That is appalling. As a number of Senators have pointed out, the vast majority of charities do very good work where their chief executive officers and those at the top do not get the big salaries and top-up payments that some are receiving. As with so many things in this country, the actions of a few have damaged the many. That is unfortunate.
The Minister's selective moralising, with respect to himself, is that he has failed in his response to mention many atrocities which were carried out by the British Army and loyalist paramilitaries. His focus always in this House is to talk about one side of the conflict in the North and never deal with the basic injustices which were at the heart of that conflict in the first place.
The scandals which have erupted understandably have had a hugely negative effect on public confidence which has led to a dip in donations to charities. The recent revelations of generous salary top-up payments and gold-plated pensions paid from charity funds at the Committee of Public Accounts hearings are proof that the sector needs urgent regulation. The reality is that the Minister was forced to act because of those scandals. The reality is also that far too many people are depending on charities because of the austerity policies which his party has put in place.
I was hoping to speak for three minutes but I will now have only one minute of speaking time.
I thank the Minister for coming to the House for these important statements. His decision to appoint a charities regulator is welcome and timely. The appointment is urgently needed in view of the many scandals we have had and the many more that may yet emerge. I also note the important and good work done by a number of charities. We could not survive in Galway without the help provided locally by the Society of Saint Vincent de Paul, the Samaritans and a number of other organisations.
In the context of the Minister's appointment of a charities regulator, will it be possible require all charities to make public all salaries and provide the detail on their websites? I ask the Minister to respond specifically to that question.
It is despicable that the chief executive of Rehab has declined to report her salary. Her ongoing refusal to do so does not look good and has given rise to considerable doubts. I and many other Members are being asked how many others are part of this culture of top-ups. I ask the Minister to elaborate on the issue of transparency and how we will bring to an end the shroud of secrecy that covers public service salaries and the top-up payments made from revenue from car parks, shops and other sources. People are outside in all types of weather shaking buckets to collect donations that will support children and others who require help while charity income is being used to top up salaries. I recommend that all salary information be made transparent and reportable and is published on an annual basis on the websites of each charity.
I welcome the Minister and his statement that regulation will be addressed very quickly. It is a scandal that a few greedy people have done so much damage to the charitable sector in recent months. It is also a disgrace that, after more than 90 years as a sovereign State, we have not yet managed to regulate charities, which channel large sums of money nationwide.
We must acknowledge that many wonderful charities do amazing work caring for the most vulnerable in society and many operate on a voluntary basis. The Society of Saint Vincent de Paul, for example, relies almost exclusively on volunteers to run its organisation, including in my home town of Ballinasloe where it does amazing work. Organisations such as Concern and Trócaire, which are funded through Irish Aid, are well regulated and must meet stringent conditions before they can receive moneys from Irish Aid. We are all aware of the amazing work such organisations do with the most deprived people on the planet. Were it not for non-governmental organisations coming to the assistance of people in the Philippines, Syria and many other troubled parts of the world, the unfortunate people in these regions would be in a much worse position.
Once every charity has been registered and is properly regulated and accounts for all of its finances, we will have to rebuild trust in the charitable sector in order that people start contributing to charities again. Last Saturday night, I took part in a church gate collection on behalf of the Irish Heart Foundation. While people are still generous, they are a little more sceptical, with some asking whether we had permits and so forth. A major job of work remains to be done to restore confidence in the sector. In applauding the work the Minister is doing I urge him to bring the matter to finality as a matter of urgency.
I apologise to the House. I have some sort of a bug and cannot guarantee that I will not start croaking at some unexpected moment. I will try to keep going.
I will make some general comments which are of relevance to the contributions made by Senators before returning specifically to what some Members said. Since I last addressed this House on the regulation of charities, I have, as Senators have noted, taken steps to advance the implementation of the 2009 Charities Act. I want to inform the House of the progress made and thank Members of the Seanad for the supportive comments they have made, save for one Member, for what we have been doing. As I informed the House on the previous occasion, the architecture I inherited for implementing the Act, as envisaged by the previous Government, was financially unfeasible in the current economic climate. We had to look at how we could best bring the legislation into force and provide for the necessary oversight and transparency in a manner that did not impact on public finances and the Exchequer and was also fair to charities.
Before I come to those issues, I will first address the important issue of charity fund-raising and the concerns that have been highlighted in that regard. I highlighted some such concerns in the Dáil recently and I am pleased to have an opportunity to expand on them. We are fortunate in Ireland to have a vibrant and diverse charity sector. Some speakers named some of the very good charities we have and I do not want to start naming them for fear of leaving some out and causing upset. However, we have a good charity sector which provides a broad range of services. People engage in a broad range of activities, with many thousands acting as volunteers and engaging in charitable work and fund-raising. Throughout the country, communities are supported in countless ways by the efforts of those who work and volunteer for charities. Many charities support their work through raising funds from members of the public. When they do this they, in turn, benefit from a long-standing tradition in this State, to which many Senators made reference, of generosity towards charity fund-raising. Much of the valuable work carried out by charities is made possible by the enduring willingness of people to give to charity, even in times of financial difficulties.
Fund-raising from the public for a charitable cause brings with it certain very important responsibilities. These are substantially concerned with ensuring the proper governance of charities. Those who donate to charity have an expectation that a reasonable proportion of what they donate will go to the primary cause of the charity, in particular, to benefit or assist the specific group or category of individuals for whose benefit the charity was created and to provide the specific service or services to which the charity is dedicated. Charities have an ethical obligation to meet this expectation as best they can. Where the method of fund-raising involves the sale of a product such as a lottery ticket or scratch card, this obligation is no different. Charities using such methods need to bear this in mind when determining the proportion of funds raised that are used in the giving of prizes and to meet other costs, including salaries, allowances, benefits and administration expenditure. In circumstances where such fund-raising schemes are supplemented by State funding, the profitability of the schemes and the usage of donors' money and State-provided funds are matters of legitimate concern for the Government and members of the public.
In circumstances where such fund-raising schemes are supplemented by State funding, the profitability of the schemes and the usage of donor's money, as well as State provided funds, is a matter of legitimate concern for the Government and for the public. My decision in 2012 to wind down the charitable lotteries scheme over three years was informed by precisely such concern. It is not in the public interest for State funds to be used to prop up charity fund-raising schemes that have a low level of profitability or that the State continues indefinitely with a State funding scheme that incentivises bad practises.
Where public concern emerges with respect to charity fund-raising, there is a potential for public confidence in the charity sector as a whole to be damaged. Charities who apply the highest standards to their fund-raising can suffer when other charities take a different approach. I am aware that many charities are reporting drops in their donations following the disclosures about the use of charity funds at the Central Remedial Clinic and issues that have arisen with regard to Rehab. The reductions experienced, of course, are not only attributable to these matters and are partially the consequence of the financial difficulties that have affected so many in the State but recent controversies that relate to the charitable sector have clearly had an impact. For anyone to deny that is the case - and no-one in the Chamber has done so - means that they are not in tune with reality.
I want to say something about what I would describe as charitable hybrids, something Senator van Turnhout, in particular, made reference to. Organisations engaged in a mixture of both charitable and commercial activities need to understand that their commercial ventures do not exclude them from their ethical obligations to deal properly with donated funds or financial assistance provided by the Government. I believe there should be the maximum visibility as to the use of such funding to ensure that it is properly applied for charitable purposes, and not used to promote commercial activities or to partially pay salaries of those engaged in what are essentially commercial activities. Trust and confidence needs to be rebuilt. Critical to this is greater transparency about how charities conduct their businesses and what they do with the funds so generously given to them. That includes full transparency with regard to salaries paid, in particular to those in leadership positions in charities. While some charities demonstrate high standards of governance and transparency, the picture is far from uniform across the sector. I believe that increased transparency can only help strengthen the charities sector. The establishment of the new system of charities regulation, provided for under the Charities Act, will assist in this process.
Under the Act, I will establish an independent charities regulatory authority. I intend to make appointments to the board of this new body by Easter so that it can come into operation later this year. In this connection I recently issued a call for expressions of interest for suitably qualified persons who wish to be considered for appointment to the board. I also intend to appoint an interim chief executive and fill a number of administrative positions in the authority by the end of this month.
Under the Charities Act, the new authority will compile and publish a comprehensive register of charities. Each registered charity will make a report to the authority every year. In the case of any charity that is funded by donations from the public, these reports will be made available to the public. This will provide donors with an important source of information about how their donations are used. It should also tell us more about how our charities are run, how they manage their resources and what are their main areas of expenditure.
The need for transparency also extends to the issue of remuneration, allowances and other benefits that apply to those who manage, are employed by and retire from charities. It is important that charities address concerns that have arisen in this regard. It is not in the public interest that these matters be concealed, that they be opaque or that they be a mystery. I fail to understand why, when a request is made for transparency with regard to the salary of CEOs in major charitable organisations, it gives rise to any hesitancy, confusion or delay in making the information available. Rather, information made available should meet a reasonable standard of transparency and give an adequate picture of the sources and uses of funding at any given charity. Charity trustees and directors have been placed in a position of trust. It is important to the overall health of the charity sector that their behaviour is in keeping with this and that they regard themselves essentially as trustees of the donations they receive from a generous public.
It is my firm belief that the changes the Charities Act will introduce - including greater transparency - will benefit our charities. I am encouraged that this view is shared by many within the sector itself, where there is strong support for the implementation of the new system of regulation.
I am aware that the current environment is difficult for charities as they are experiencing increased demand for their services at a time when resources are under pressure. It is also a time when many members of the public, who in the past have donated generously, may find themselves under personal pressures which inhibit their capacity to contribute to charities, or which make it impossible for some. We all know of individuals who have worked in charities raising funds for those in need or for essential services who, as a result of the economic collapse, businesses closing down and the difficulties in recent years, find themselves now dependent on charities in circumstances in which they never envisaged, or that such circumstances would arise and impact on them during their lifetime.
The steps I am now taking to improve the regulation of the sector will help to ensure the strength and vibrancy of the sector into the future. By encouraging high standards and fostering good practice, we can help to protect and, where necessary, restore public trust and confidence in our charities. I believe this is of particular importance to enable charities that have made a substantial contribution to continue with their work in the years to come. The importance of this, in the context of assuring the donating public of the probity of charities, cannot be overemphasised at a time when organisations, such as Atlantic Philanthropies, are expected to wind down and end their engagement with charitable and voluntary organisations in this State. Transparency, responsibility, accountability and good corporate governance are crucial to public confidence. As a Minister in Government, I make no excuse for demanding this of all bodies in the charitable sector.
I shall briefly turn to some of the comments made by members during the course of this discussion. Senator Conway referenced that what we are now doing is effectively a starting point. Yes, setting up the regulatory authority is a starting point. I hope and expect, by next autumn, that the legislation will be fully brought into force. It should and will provide the transparency necessary.
A number of Senators made reference to the need for easy access to information, on a website, in which one can know, if one wishes to donate to a charity, that the donation has been made to a charity, what it does with the moneys donated and, if it receives public moneys what it does with the moneys. This should include what part goes in administration, what part goes in perhaps promoting some product it is selling to raise funding, what part goes overall in salaries and, in the context of those who are earning large salaries, what part goes to them. In this regard there is clearly no need, for example, to ascertain whether a charitable organisation employs a cleaner to come in to clean once a week and how much the cleaner is paid. However, where there are people in management positions, where there are people in receipt of substantial funds, the public is entitled to know the relevant information. Accounts, of course, must always be properly audited.
I have a concern where we have charities and where individuals who are working for those charities are earning salaries in excess of what the Taoiseach of this country is earning. Serious questions arise in that context. While this can become confused where some charities are engaged in both commercial business ventures and in charitable activities, there is a need for full transparency. It is my hope that the starting point of what we are now doing, bringing legislation into force, allowing the authority members to be appointed, giving them an opportunity to provide a roadmap and a work plan and then bringing the legislation into force before the end of this year, will ensure that we have the starting point and very rapidly we will have the fulfilment of what is intended.
Senator Ó Murchú made the point that the charitable sector touches on every aspect of Irish life and society. We all know that to be true. Senator Higgins raised a matter about which she has concerns. We will look into the issues she has raised. I have limited powers in these areas and these may be issues for the authority to look at upon its establishment.
However, charities must behave with propriety at all times and that is of crucial importance.
I thank Senator Mary Ann O'Brien. She made a contribution as many Senators did, with which I have no disagreement and she emphasised, as I did, the importance of corporate governance. As someone who has been involved in, and done substantial work with, a charity, I thank her for her constructive engagement with me over the past 18 months. We have been engaged along with my officials in a broad consultative process with the charity sector about how we bring in the legislation without it becoming a burden on the public and taxpayers, increasing public expenditure, being unfair to any charity, imposing on charities a cost they can ill-afford and unfairly impacting on donations. We managed to work through this and we have a scheme now with which we hope to proceed.
Senator O'Donovan raised the issue of ensuring the regulatory authority pays for itself and does not become a burden on the State. I do not anticipate it will incur the costs he referenced in the context of England. However, there will be a scheme through which, depending on their size and the funding available to them, charities will contribute to the cost of the regulatory authority. It will be spread among all the charities, which will be obliged to comply with the legislation and the requirements of the authority. It will not be a major burden but, cumulatively, the scheme should provide for the self-funding of this particular body.
Senator Mary Ann O'Brien mentioned SORP and the need for consistency in accounting policies and principles. I anticipate that will be demanded by the authority. We should have that consistency among all bodies in the non-profit sector whether that relates to donations they receive from the public or funds they receive from the State. There should be a consistency of accountancy approach and clear visibility regarding audit accounts with no mystery about them. They should also be readily understandable for one reason only, which is that those interested become familiar with the manner in which the accounts are presented. In the commercial sector, despite regulatory and company law provisions, there can be exotic presentations on occasion in obscure language about issues that people would prefer received no public notice. In that context we need clarity and simplicity. That will be an important job for the regulator and part and parcel of this should be a website providing access to all this information in an easy and user friendly way.
I will not upset a certain Senator any more than I have but Senator Mary Ann O'Brien could give the lie to the notion that we only woke up to do something in this area over the past few weeks because of the ongoing controversy. I have been working on this with my officials for the best part of two years. There was a detailed consultative process after it became clear that in the financial circumstances we inherited in 2011, it would be impossible to implement the legislation, as originally envisaged. We examined how we could do it differently and what were the alternatives and we engaged in a consultative process. I recall speaking at a conference about this issue. We are where we are without any controversy. Last July, the Cabinet made a decision that as we headed into 2014, we would proceed to implement the legislation and preparations had to be undertaken in advance of that. Rather than responding to an emergency, therefore, there has been a careful and considered approach. It was important to bring the charity sector with us because we need co-operation. I expect the issue of non-compliance with the legislation and the requirements of the regulatory authority will be addressed.
Senator Noone raised a good matter that she discussed previously with me in private, which is a charity quality assurance mark. That would be an excellent project for the new authority to consider. Where charities are recognised as fully transparent and compliant and creating no difficulties, they should be given such a mark. It should be open to review on an annual basis in the context of accounting practice and of information that becomes available. That would be of benefit to the general community.
I join in congratulating Senator Quinn on his 21 years service in the House. It is a happier moment that mine was. Just as I reached 21 years service in the Dáil, I lost my seat. No one applauded me and it was sad personally but the world, strangely, continued on. I hope the Senator continues to enjoy his time in the House. He will not have to experience the wrath of the electorate over the next few years. I often agree with him but I disagree with him on one matter. He said politicians do not want this transparency. He can bet that I want this transparency sooner rather than later and I wish we had it many years ago. This is why I have been so engaged in dealing with this.
Senator Moran also referred to transparency and I have addressed the issues raised by Senator van Turnhout. Senator Colm Burke made reference to the Department of Health and its awareness of irregularities. If there are irregularities, as we have witnessed with the CRC, the Committee of Public Accounts can play an important role in bringing transparency where bodies are in receipt of public money. Departments can engage their functions when organisations seek additional funding for a new year to ensure they have accounts from the previous year and if any issues of concern arise, to ensure they are properly addressed.
Senator Landy asked about appointments. We have advertised them and the legislation provides for criteria regarding the qualities of individuals to be appointed to the authority. It will be an objective exercise in appointing, I hope, appropriate people to this body in accordance with the legislation. The appointments will be made based on the skill-set of individuals required for the authority to properly work. That is the only relevant criterion. Diverse skills are needed on the part of these individuals.
I have come to end of my reply and I hope I have left out nothing important. Members will be pleased to know my voice is about to go. I have to keep it functioning because I have justice questions in the Dáil tomorrow morning. I thank Senators for their interesting and constructive contributions. We had a worthwhile debate on charities some months ago before the recent disclosures and excitement but it was also an important part of our consultative process along the road to implementing the legislation. I hope when we next discuss this issue the regulatory authority will be in place and its work will have commenced.