Sector Calls for Proper Engagement on New Charities Legislation

Proposed amendments to the Charities Act will deliver legislative advances long awaited by the broad charity sector but also contain proposals that, in some cases, require significant clarification or strengthening.The initiative represents a welcome review 15 years after the adoption of the first legislation.

It contains a range of positive and long-sought improvements, including recognition of the advancement of human rights as a charitable purpose and ensuring that company secretaries are not automatically classified as charity trustees.

An increase in the audit threshold to €250,000 and clarifying that court appointed trustees do not carry liability for matters preceding their appointment are common sense proposals in the area of governance.

Speaking on submission of a joint briefing paper to the Joint Committee on Social Protection, Community and Rural Development and the Islands, developed with the support of Mason Hayes and Curran solicitors, Colette Bennett, Director of Advocacy and Research at The Wheel, said: “While there are many positive aspects to this Bill, it does not address the strong potential for reputational and financial damage to charities from the current practice of publicising an investigation in advance of any findings being determined”.

It would also allow charities to be de-registered for minor areas of non-compliance and this proposal is made more threatening by an inadequate appeals process.

Áine Myler, CEO of Charities Institute Ireland said “Regulation has been welcomed by our sector and works best when it’s proportionate. We are concerned that, in addition to the missed opportunity to address anomalies in the existing legislation, the Bill could have the effect of placing a sword of Damocles over both charity trustees and staff alike and may further serve to seriously distract from delivering on the charitable purpose.”

“The impact of the increased cost of legal, accounting and auditing compliance will add significant financial burdens, particularly impacting mid-size charities. In this regard, the absence in the Bill of any reference to compliance funding supports for charities is highly regrettable and policymakers need to address this funding gap. It will increase the strain on volunteer boards and the many charities reliant on few staff and a volunteering culture,” said Ms Myler.

“It is vital that significant time be allowed to allow for comprehensive and fully balanced amendments to be put in place,” said Ms Bennett.

Given the publication of the draft wording on December 22nd last just before a long Dáil recess, The Wheel and Cii call for sufficient time to fully review the proposed new provisions and the opportunity to present more detailed analysis, findings and proposals to the Committee at an early opportunity.