Introduction
I am pleased to be here on behalf of my colleague, Minister for Justice and Equality, Alan Shatter T.D., and to address the motion before the House.
Role of the Charity Sector
Charitable organisations play a vital role in our society. There is probably no aspect of Irish society that isn’t enriched by the involvement of charities and the tireless efforts of those who work and volunteer on their behalf. From the largest international charities working in developing countries around the world, to the smallest community group where everyone knows each other, the spirit of charitable work and charitable giving is evident and worthy of support.
The Charities Act, enacted in 2009, was underpinned by an understanding of the vital role played by charities and a desire to support them in their work. A fundamental objective of the Act is to enhance public trust and confidence in charities and increase transparency in the sector. Many charities receive a portion of their income from public donations so the issue of public trust is of crucial importance to them. The provisions of the Act are intended to ensure greater accountability and to protect against abuse of charitable status and fraud. In this way, the trust placed by members of the public in the charities they support can be protected.
Implementation of Charities Act
Since the enactment of the Charities Act in 2009, five sections of the Act have been fully commenced and a sixth partially commenced. This has been done by way of two separate commencement orders, S. I. 284 of 2009 and S. I. 315 of 2010. These orders were primarily technical in nature. Their substantive provisions relate to regulating the sale of Mass Cards and giving powers to the courts to grant relief to charity trustees from personal liability for breach of trust in certain circumstances.
However, the key provisions of the Act that will put in place a new regulatory framework for the charitable sector, have yet to be commenced. These provisions are linked to the establishment of a new independent Charities Regulatory Authority, as provided for the under the Act. Because the Act vests the powers to regulate charities in the new Authority, it is not possible to commence further sections of the Act until such an Authority is set up.
The Minister for Justice and Equality assumed responsibility for policy relating to the Regulation of Charities in May of last year (2011), following the reorganisation of Government Departments. Shortly after this, and in the context of the urgent need to reduce Government spending and restore stability in the public finances in line with the EU/IMF programme, all Government Departments conducted a Comprehensive Review of Expenditure aimed at identifying areas where savings could be achieved. In this context, the establishment of a Charities Regulatory Authority was deferred and the Minister for Justice and Equality undertook to examine how progress might be made towards the objectives of the Charities Act in light of the changed circumstances since the passage of the Act.
As the Minister for Justice and Equality made clear at the time the deferral was announced last November, the decision to defer the full implementation of the Charities Act was taken for budgetary reasons. It did not indicate a change in Government policy with respect to the fundamental objectives of the Act, including the desire to provide for the better regulation of charitable organisations. In light of this, the Department of Justice and Equality is examining how the objectives of the Act can be progressed in the current circumstances. The Minister for Justice and Equality intends to consult on proposals for this in the coming months and looks forward to the informed engagement of this House in this process, as well as the input of the charities sector and the wider public.
Existing Regulatory Framework
It is rarely a quick or simple matter to go from the passage of legislation establishing a new statutory agency to the point where that body is fully established and exercising its functions in line with its parent legislation. Nevertheless, it was of course not envisaged that there would be a delay such as this in the establishment of the Charities Regulator. I know that it is a source of concern to many in the charities sector and I share their eagerness to see the matter progressed in line with available resources.
However, I feel it is also important to remind the House that not everything depends on having a dedicated charities regulator. We should also recall that there is in existence a broad range of regulatory oversight measures that can apply to charities. Many charities are already subject to scrutiny by various State Bodies. Many charities receive significant levels of Government funding through grants, contracts for service delivery, and so on. In relation to how they use and account for these public funds, these charities are subject to the oversight of the relevant grant-making or contracting Departments and Agencies, and, where appropriate, of the Office of the Comptroller and Auditor General. The Revenue Commissioners have granted charitable tax exemptions to almost 8,000 charities and have significant powers to ensure that such charities comply with tax law. A full list of these charities is available to the public at www.revenue.ie. Many charities are companies limited by guarantee and, as such, are also subject to the provisions of company law and are generally required to provide certain information to the Companies Registration Office under the Companies Acts. This information can then be accessed by the public. Such charities would also potentially be subject to scrutiny by the Office of the Director of Corporate Enforcement. Charities that take the form of a trust are subject to the provisions of trust law. And, of course, any business entity is subject to general criminal and fraud legislation.
So while, in common with those proposing the motion, I too look forward to the full implementation of the Charities Act and the dedicated regulatory framework that it will usher in for charities, I feel it is also important to recognise that the charities sector is at present far from unregulated. To suggest this would be misleading and fail to acknowledge the value of the effort invested by many charities in meeting existing regulatory obligations.
Role of voluntary measures
The motion before the House this evening not only points to the benefits of statutory regulation of charities of the type provided for in the Charities Act. It also recognises the role and responsibility of charitable organisations themselves in enhancing the transparency and accountability of their sector. Voluntary, sector-driven approaches to better practice are an essential part of a strong and accountable charity sector. Statutory regulation is a complement to this, not an alternative. As progress is made on the implementation of the Charities Act, so the Government also hopes to see a continued drive from within the charities sector itself for improvements in transparency and accountability where necessary. The motion before the House refers also to levels of remuneration packages and administrative costs. This is a genuine area of concern for many people who make donations to charities and one where I believe greater transparency has real potential to incentivise best practice among charities and, by doing so, to enhance the public’s trust in them.
Fundraising is another area in which sector-driven efforts to spread best practice can play an important part. The Government continues to support certain initiatives in this area. This includes the development and promotion of a Statement of Guiding Principles for Charitable Fundraising that has been developed by the charities sector itself, under the leadership of voluntary charity umbrella body Irish Charities Tax Research. These Guiding Principles, at the core of which are respect, honesty and openness, aim to provide a set of agreed and accessible standards to charitable fundraising strategies and projects. The Department of Justice and Equality is providing grant support for this initiative.
The Minister for Justice and Equality has encouraged all charities to sign up and adhere to these Principles, which represent a simple yet demonstrable commitment on the part of charities to better accountability and transparency. To date, only modest numbers of charities have formally signed up to the principles, which were launched in March 2011. The Department of Justice and Equality continues to support this initiative with the aim of increasing the share of fundraising that conforms to these principles. However, such an initiative requires the support and participation of charities themselves in order to be meaningful and the Minister urges all charities that carry out fundraising to sign up. Charities wishing to sign up or to find out more should visit www.ictr.ie.
The future of statutory regulation
As I outlined already, the deferral of the establishment of a Charities Regulatory Authority is a budgetary matter and not a policy matter. I can assure the House that the decision to defer statutory regulation was not taken lightly. Despite the changed circumstances with respect to the public finances and the wider economy, it remains Government policy that the relevant legislation will be fully commenced and a Charities Regulatory Authority established in due course, and in such a way as available resources permit.
During 2012, therefore, the Department of Justice and Equality has kept the decision to defer under review in the context of resource allocations and has examined ways of making progress towards the objectives of the Charities Act. This process is ongoing and the Minister for Justice and Equality intends to consult on options in the coming months.
Conclusion
The charities sector in Ireland is vibrant, diverse, innovative, and enriched by the goodwill and confidence of its members and of the public at large. It is in all our interests to keep it so. This Government is determined to work to this goal in partnership with the charities sector.
I commend the motion to the House.
Thank you very much.