ERNOP

A Note on National Policies and the Current State of Philanthropic sector in Ireland.

Ireland – Dr. Oonagh B. Breen (School of Law, University College Dublin)

 

 

The Philanthropic/Charitable Landscape in Ireland

At present in Ireland it is difficult to be precise about the exact size of the non-profit sector in Ireland. Approximately 7,000 organizations claim charitable tax exempt status and are thus registered with the Revenue Commissioners although it is unclear (even to Revenue) how many of these listed organizations are actively operating and the public has no legal means of finding out the grounds for tax exemption or how efficient these charities are in achieving their goals. Aside from these organizations, 2004 figures indicate that there are in excess of 24,000 organizations that fall into the broad non-profit/community and voluntary organization category, which would include charities.

 

 

Recent Legislative Developments in Irish Charity Law

In February 2009, the President of Ireland signed the Charities Act 2009 into law. This statute plans to fundamentally overhaul the governance of charities in Ireland. It creates a statutory definition of ‘charitable purpose’ for the first time in Ireland, establishes a new regulatory authority for charities (the Charities Regulatory Authority – hereinafter CRO), which will be responsible for maintaining a new register of charities in Ireland. When the register is in place, only organizations listed on the register will be entitled to call themselves ‘charities’ in Ireland. It will be an offence for an organization that is not registered to do so.

 

Registered charities will be subject to a reporting regime that will see them file their annual accounts (with the Companies Registration Office if a charitable company and otherwise directly with the CRO) thus making these accounts available to the general public. All charities will be required to file an annual report with the CRO setting out the manner in which they achieved their charitable purposes over the past twelve months and detailing their programmes, details of their operations, and solicitation procedures. The focus of the legislation is very much towards greater accountability and transparency by charities with the aim of increasing public confidence in bona fide bodies.

 

Parallel to the statutory regulation of charities will run a new non-statutory regime to regulate charitable fundraising. The Government approved a General Statement of Guiding Principles in 2008 and subsequent to this, an implementation group, drawing from both charitable organizations and professional bodies, was set up to draft codes of practice to give effect to these Guiding Principles. The Implementation Group is due shortly to publish the first set of deliberations by it, providing the first opportunity to view the proposed codes of practice.

 

The Charities Act 2009 will amend the Charities Act 1961-1973. It has taken in excess of 19 years for this legislation to make it onto the statute books. The Act has been preceded by a wealth of policy papers from government, professional bodies and the non-profit sector alike, which explored, inter alia, the constitution of the ‘voluntary and community sector’ (Irish Gov, 1990s and 2000), the need for greater regulation of charitable fundraising (Irish Gov, 1996), and the need for reform of the legal framework governing charities (Law Society of Ireland, 2002). All of these reports and papers fed into the Government’s consultation process on the new legislation (2004), leading eventually to a draft charities bill in 2007.

 

At the date of writing, only one section of the 2009 Act has come into force, so much remains to be done and in these recessionary times, implementation of the Act will depend on availability of government funding needed to establish and staff the proposed new Charities Regulatory Authority. Efforts are currently underway to develop the details that will govern the reporting and accounting standards under the new legislation and thus further consultation with the sector is expected in 2010.

 

Funding in times of Recession

The recession has seen a severe cut in existing and promised Government funding for the community and voluntary sector. Many grant programmes have been cut or discontinued and capacity building funding promised in 2006 to assist the sector in gearing up for the new regulatory regime is but a distant echo.

 

The one area where funding remains vibrant is the wholesale market for social finance. In 2006, the government in conjunction with Irish Bankers Federation established the Social Finance Initiative with a seed-capital of €25 million. Under this scheme, the Social Finance Foundation was established as a not-for-profit company (limited by guarantee and having no share capital) to act as a wholesale supplier of funding for social finance. This funding has been supplemented in recent months by further bank guarantees to lend the SFF €72 million to enable it to lend to social lending organizations that in turn make loans to non-profit borrowers. The loan agreement between the SFF and the country’s retail banks will see the banks provide €72 million over a loan period of 12 years at a discounted rate of interest, enabling the Foundation to lend onward at competitive rates in support of social and community projects and micro-enterprises all over the country. Since August 2007, over €17 million in loans has been approved by Social Finance Foundation.

 

 

Philanthropy and Civic Engagement

Philanthropy in Ireland is a relatively young. At present, research by Atlantic Philanthropies indicates that only 12 percent of the Irish population gives in a planned way. Ad hoc generosity by the public is much more the norm. A 2007 study of the Irish fundraising landscape found that the fundraising environment is characterised by increasing competition; there is pressure to develop innovative strategies to avoid public apathy increasing costs and expectations; the public expect professional services but frown upon excessive investment in fundraising donors; business, the State and individuals are demanding greater levels of accountability and transparency. The 2007 report predicted that “given the dynamics of the fundraising environment, it is possible that in the future there will be: increasing disparity between small local/regional and large national/international charities in terms of skills, capacity, growth and success increasing pressure on medium organizations to enhance the investment and the scale of their fundraising efforts or reduce their organizational goals increasing likelihood of collaboration between medium and smaller organisations to develop efficacy.

 

Efforts also continue in Ireland to encourage greater displays of active citizenship. In 2007, the Government’s Taskforce on Active Citizenship presented a set of recommendations to Government on measures that could be taken to encourage greater civic participation in Irish society. An Active Citizenship Office was established within the Office of An Taoiseach (the Irish Prime-Minister) to take responsibility for the implementation of these recommendations and a steering group has been established in 2008 to oversee its work on implementation.