From top; Soc Dem leaders, from left: Stephen Donnelly, Catherine Murphy and Roisin Shorthall launching the party’s charity regulation motion yesterday; Anne Marie McNally
it’s time we asked ourselves if vital services should be provided by the State rather than outsourced to charities.
Anne Marie McNally writes:
Last night in the Dáil the Social Democrats tabled a Private Members Motion calling for more robust scrutiny and regulation of the charity sector.
The motion comes on the back of the recent Console revelations which, despite the experience of Irish people regarding a charity ector scandal, still managed to shock us!
But it shouldn’t have shocked us given that we never put in place the framework to ensure there would be no repeat following the previous scandal or the ones before that.
Remember the Rehab scandal? Recall the Central Remedial Clinic scandal?
Yep, they continue to happen and we continue to be outraged for the requisite time then the headlines forget and we all go back to our daily lives.
But how many of us cancel the Direct Debits to various charities as we do? The many great people working and volunteering in the sector suffer and most importantly, the service users suffer.
In the wake of the Rehab scandal, charitable donations to Rehab fell by two million euro. Console has been all but wound up.
Given the negative impact on charitable donations caused by these recurring scandals it is incumbent on us to ensure we, in so far as is possible, rogue-proof the charitable sector so that public faith is restored and maintained.
In 2009 the Charities Act came into law. This act provided for the establishment of the Charities Regulation Authority and within that, the Charities Regulator. Part 4 of the Act provided the Regulator with investigative powers.
All sounds good right?
Well the problem arises when you think back to the 2009 Act and realise that actually the Regulator was appointed until 2013, four years after the Act was passed into law.
Even more astonishingly Part 4 of the Act, conferring investigative powers on the Regulator, was only commenced by the Minister just last week and will come into effect in September. Hardly a model of good governance and regulation in the sector now is it?
There are over 20,000 registered charities and you’d be surprised at some of the organisations that can classify as charities.
Schools and sports clubs, community organisations and myriad other endeavours will often be classified as charities. I previously worked in an organisation that had charitable status.
The organisation I worked within was funded almost entirely by public funds. There were reporting requirements to each funder and there was the necessity for annual audit. Yet within that setting, just as I joined, there was an instance of misappropriation of funds.
The funders moved in, the auditors scratched their heads and everyone was shocked. There was a criminal investigation that has yet to be completed seven years later.
Anecdotally I hear these types of stories regularly. The reaction that I witnessed from the funders and the authorities did not give me confidence of the infallibility of the sector to rogue operators.
And there will always be rogue operators no matter what protocols you out in place but the trick is to have an appropriate framework so as to ensure only the really determined will try to flout the rules and when they do the system is designed to both catch and hold accountable the culprit – in a timely and appropriate fashion.
Separately it’s time for us to start asking ourselves if some of these vital services should be provided by the State rather than outsourced to voluntary and charitable endeavour.
When concerns began to be raised about Paul Kelly in Console as far back as 2006 then again in 2009 and most recently in 2013, he was still in a position to go shopping on the Console credit card in 2016 because the HSE felt hamstrung. If they acted on him they risked closing down the vital helpline provided by Console and they couldn’t take that risk.
We paid dearly for the outsourcing of the responsibility of such a vital service. The entire sector will now pay dearly by way if reduced donations.
It is a progressive step that the Government accepted our Motion last night and with the political will to carry through on the premise of the Motion we can hopefully avoid a future outrage and a restoration of the public trust in a sector which should continue to play a pivotal role in civic society even if we take back responsibility for some vital services.
Anne Marie McNally is a founding member of the Social Democrats. Follow Anne Marie on Twitter: @amomcnally
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I’m a director of a very small charity that my mother in law founded, we met with the accountant last week who suggested in light of the Console scandal that we increase our directors from 3 to 7 for the peace of mind of the public/donators etc. We agreed, of course.
I am a chair of a an international charity (€20m, not Irish based fwiw). Governance is paramount. Do not – repeat – do not invite friends or family onto your board. Employ the services of a solicitor to assist you with the creation of a solid board member selection process and embed into your articles of association. If you must, advertise for directors based on competency – not good intentions. Focus on finance, audit, technology(if relevant) and perhaps development/marketing. Good intentions from leadership or staff will not get any serious charity anywhere in the long run other than in trouble. If you cannot afford any of these suggestions, you really need to think through the longevity of your organisation. I offer this with the best of intentions.
Instead of forming her own charity, and having to go through all this costly mess, why didn’t she just join a larger charity in the same area (if there is one)?
Charity / Philanthropy… is where rich people who don’t pay tax go to buy respect from their peers with the money they should have paid to revenue. While ordinary wage earners actually give generously on top of their taxes.
It’s not difficult to see who the genuinely decent people are in that scenario.
Simples.
you have a point to a degree
I’ve witnessed plenty of this kind of sh1te where the benefactor “ring” actually get an ego boost out of the thing BUT the problem is however you can’t paste everything with the same brush….there are some great examples of groups of people around who want to help their fellow man and intervene to bring fairness into some dark corners where the social system will never ever reach…good people who whatever the feck they do in their dayjob or their level of personal wealth where there isn’t a charridy in sight just want to do something that’s right tbf
seems to me to be a wide abuse of the charity vehicle accountancy-wise to me…I know one example where there is feck all good work being done but yet charity status is used to advantag€
and as a rule no.1 for me to donate to something I need to know that whomever is at the helm/board are not earning stupendous €€€ for their time…its a vocational gig ffs
True, but I don’t like the gushing that goes on over, for example, [REDACTED’s] supposed ‘generosity’ when the guy pays very little to no tax in comparison to ordinary individuals.
If the like of he paid tax, and didn’t use accounting yoga to bend all manner of tax deductions out of it, then those persons would get more respect, I’m sure.
It’s self perpetuating, the philanthropist and the charity sector circle jerk.
I’m similarly a director of a charity in the West of Ireland that’d be *fairly* high profile in that neck of the woods. I *genuinely* find it hard to believe that the kind of Console/CRC thing can go on as it does. A word on regulation. As a board, we meet once a month for 2 hours or so; like most boards, day-to-day stuff isn’t something that it’s the boards function to manage – but we get the monthly accounts, drilled down to a very micro level and ask questions where appropriate; they tend to be of the ‘why is the insurance so high this month?’ type.
Since the coming into being of the 2013 act and the appointment of the regulator, the meetings have increased; we’re expected to have any number of policies and so forth in place, and the creation of these policies necessitates more meetings, more box-ticking.
I’m not saying this is bad, but there’s a definite feeling that all the class is being punished because of a few messers.
There is a trade-off here; more regulation (and I found this from my time serving on a Credit Union board as well) will mean that more volunteer hours are expended *not* actually doing work for the charity, per se (in the shape of working to further the goal of the mission statement), but rather expended purely trying to prove that you’re not dipping into the cookie jar. And once the ‘workload’ of being a board member becomes *that* rather than advancing the cause you’re interested in, in the first instance, then attracting future volunteers becomes that bit more difficult.
in other news? 20,000 charities? Yeah, that needs looking at.
Fair play for all your efforts Ivan, you obviously take your directorship seriously.
And I think that is key, the responsibility of any board of directors is incredibly onerous but at lot of people do not understand this and what the responsibilities are. In short, they are responsible for keeping their entity honest.
That did not happen in Console’s case and while I would not point the finger at the Board over the CEO, it does highlight the lack of awareness that being an board member is not just an honour.
This is something that the charities regulator needs to focus on.
Well I remember reading the news that many of the people yer man said were on the board, didn’t even know they were on it!
exactly
Harry, what are the board there for, if not to oversee the day to day running & in particular the uses of the monies raised…………………….I have cancelled DD & will only give to homeless on the street………………..
purpose of ANY board is to act as overseer of management, and to devise long term strategy.
Day to day affairs are for the CEO and employees to mind.
Thankfully the board I serve on is not Irish based. However I have worked for and served on the boards of a couple of other Irish charities. The problems we had with Rehab and CRC are that although technically registered charities, their activities operate more on a for profit basis. Take the largest charity in the State…. Who do most people think that is? Well, it’s St Vincent’s Health Care… followed by the other large healthcare/hospital trusts. Then Rehab and then Concern. So Concern is probably the largest ‘charity’ of its type in Ireland and in the true sense of the word – given a major component of their funding is public. They are also probably the best run from a governance perspective. Their CEO is also one of the lowest paid for the position he holds respective to many other large/medium organisation (€99k).
As a donor to Concern, I make it my business to learn their structure, their governance model, their remuneration policy and their Board – all that information is publicly available.
So, It’s when these massive entities that provide services on a contract basis on behalf of the state do things get muddied. Rehab and CRC and many other organisations were ran as for profit entities and paid themselves accordingly. And yep – it makes it tougher for the others. But then, given the huge volume of charities in Ireland, perhaps it’s no bad thing.
My last work on charity is this – charity is not compatible with socialism. It is a capitalistic endeavor however unpalatable that might taste for some folks. If you’re not making it, you can’t give it away. You need disposable income to donate to a charity. Charities need people to make money and the more the better.
That’s all well and good (re capitalistic endeavour) but as a donor, I’m going to think twice if I the money I’m donating is just going to get swallowed up by some stuffed shirt’s bank account.
Again, as a donor myself, i believe it is incumbent on every donor to make it their business to understand a charity’s structure, governance model, remuneration policy and who their Board is. If they can’t or won’t provide you with that most basic of information, then avoid them.
+1
One would assume someone workimg in a charity is motivated by altruism so why the need for massive, often 6 figure salaries? Regulation is badly needed.
Well yes and no. Again, I’m going to use my own experience of a particular charity rather than present empirical analysis.
There are two levels; on a board level, you’re a volunteer. If you’re organising a headshave in the local boozer and passing around a bucket, you’re a volunteer. But if the charity is handling a few hundred thousand in donations every year and has an office, then somebody has to keep the show on the road, and for that you need staff, and you need to pay them. And you need a CEO to oversee the day to day running; if you DON’T have somebody overseeing what happens with the money (and obvs somebody trustworthy) then the confidence of potential donors is actually reduced.
I’m not sure what Paul Kelly got himself in terms of a salary but the number bandied about in one news outlet was that 500K went to him, his wife, his son in salary AND car(s) and perks. That’s a ludicrous amount of money, and you won’t find me standing up for it.
But for my own charity, where we’ve to spend money on capital project(s) and get buy-in from the government, then I would want somebody with a head on their shoulders, who’s got savvy, able to network, negotiate…that sort of thing. I’d want somebody who knows a bit about fundraising, who’s energetic, who’s perhaps willing to turn up to the end of a table quiz in the a*se end of nowhere to pose for the photo with the giant novelty cheque so that it gets in the local rag next week.
You don’t get somebody like that for, say, fifty grand. You *do* have to pay for good people, and the logic is that you (ideally) get a significant return on that salary; in other words, you’ll raise more with somebody on, say, 100K at the helm than you will with somebody on 50K.
As I say, I don’t know *exactly* the amount Kelly was paid but the day of charities being *totally* volunteer based are gone. Ditto Credit Unions. (He said, banging that effing drum again…)
Excellent points ivan, well said.
“And you need a CEO to oversee the day to day. You don’t get somebody like that for, say, fifty grand.”
I know. I get it. You have to pay for skills but you then get someone with little to no emotional connection to the cause getting to oversee huge sums of money with far less accountability than a CEO in a private firm. This is why the regulation is needed.
“you’ll raise more with somebody on, say, 100K at the helm than you will with somebody on 50K.”
I’ll take your learned opinion on it but do you reckon, is it possible, theoretically, to find someone with the skills who’d be willing to do it for 50k sort of like the Shinners or socialist TDs and their industrial wage lark?
On your first point, you ‘get’ as CEO the person the board picks (assisted sometimes by recruitment specialists), so you’d hope for somebody *with* the emotional connection, but that’s not a given, I’ll grant you.
on the second…”learned”. Ha. Thanks. I’m not sure that it is. If it was a 9 to 5 gig, you might. But (personal experience ahoy, your mileage may vary) it tends not to be, if you’re doing those things I said you’d be doing up above.
People’s Hero is kinda right with his brutal truths; charity as a concept is still dependent on volunteerism, whether it’s volunteering to have your backside waxed, or to put a fiver into a bucket in exchange for a nice pin. But the money adds up, and running the gig requires professionals, trustworthy, enthusiastic and with integrity – and as in all walks of life, they’re maybe not as thick on the ground as we’d like to think.
as a general comment – where you say regulation is needed, I’ve no problem with it, save that it’s time consuming and it’s (in my humble opinion) a tad insulting for those who *do* keep their noses clean. The trouble with Console and Paul Kelly is that he was a chancer from the ruddy get-go, and nobody said a word…like, what regulation would you have to frame to stop that kind of thing happening?
….”sort of like the Shinners or socialist TDs and their industrial wage lark” …you mean, more con jobs like that nonsense…. no, you won’t get people making up crap about being altruistic with their salaries. Remember that so-called ‘altruism’ keeps them in a job, it’s not something they don’t benefit from. It’s bullcrap.
“but do you reckon, is it possible, theoretically, to find someone with the skills who’d be willing to do it for 50k sort of like the Shinners or socialist TDs and their industrial wage lark?”
Why should they? I mean, there’s a shocking naivety in Ireland when it comes to charity – perpetuated by a believe that all charities should be run on prayers and ha’pennies or are run by that awful derogatory term ‘do-gooders’.
A professionally run ‘charity’ with appropriate paid-for talent and capacity will be run better, more efficient and more impact than and entity ran predominantly on a volunteer basis. This is a well established precept and my hope is the regulator will sieve out all those entities that cannot run themselves properly. Sure, you’ll need your support base – your bucket shakers and head shavers, but all strategic and operational activities should be carried out by professionals(with well governed board oversight) – paid to do the best possible job just like anyone else working for a limited company. Oh, yeah…. Charities tend also to be limited companies – with all the regulatory requirements that come with that – especially with Revenue. Another benchmark of a well run charity are independently audited annual accounts.
So, again. If you’re running your charity well, you are running it with sound business principals that any successful business will apply,. You will pay your staff a fair salary – usually below or close to market rate for that role. You will compensate your leadership team fairly too – high five to low six figures at the very most (normally well below market rate). A small pension contribution – 8% or so at the most. No perks. No bonuses. No healthcare. Absolutely no cars.
Boards are of course different; they will be voluntary save for as much tea they can drink. No matter how big the organisation. They should never be compensated. Hence, boards tend to be staffed by those with independent means, or, day jobs.
To repeat, charity is not compatible with socialism. But running a charity requires a certain ethic applied. Rehab and the CRC broke that ethic – arrogance got the better of them. Console is a different matter – fraudulent activity by a family with zero morals and ethics and they conned an awful lot of really, really decent people.
Charities, bankers, political classes, we need a new mindset. These parasites are in all these sectors but even when they are found out to be crooks by ‘committees’ and Tribunals they are backed by our Taoisigh and the electorate re elect them. Until that stops we do not stand a chance of ever getting rid of the massive corruption in Ireland. At least the Social Democrats are trying to do something about it. Well done to them!
Honestly…. your tar brushing and generalisations are grotesque….
oops …… forgot to included the Legal ‘Eagles’ …….. now you are included. Happy?
Ah… the Brexit mentality….. ‘Experts…..”, who needs ’em?
Equality means everyone should be equally ignorant!
You could always disperse your surplus of ignorance Kieran. From each according to their ability etc…
Wow, big business built on the sand foundations of altruistic whims. The disparity in social, mental health and general health services in the state is truly barbaric – what is the point of the State and it’s politicians if every last service for it’s citizens has been delegated out and monitised to well-placed individuals for a profit?
The author might begin in her own back yard. For years, politicians have been squandering money, faking expenses, employing family and friends, lying about their intentions and generally taking their benefactors (the public) for granted. Charity workers are some of the most hard working, dedicated people I know and deserve to be rewarded commensurately. The way people say its a vocation and should be paid accordingly is disgusting.
We must remember that charity is basically an out sourcing of services by the government and they should come under the same regulation and scrutiny as other contractors, no more and no less. Maybe encouraging the work they do would be a help rather than the lazy journalism that is going to go for the next year “exposing” charity expenses.
Well said.
What? Charities don’t get enough positive coverage? I beg to differ.
Your first point was simply irrelevent but no less funny.