Should charities pay for regulation?

boo3000

The Charity Sector in Ireland is largely unregulated. A charities act was introduced in 2009 but it's implementation has been put on hold due to cost. Some of the large Irish charities take in 20-30 million per year and it's not unknown for CEO's of these charities to be paid well in excess of 100k per year. The FAI for example (and im a football fan) benefit from charitable status and paid Delaney 430k last year. Some charities give a detailed account of how their charitable moneys are spent others are less forthcoming.

My question is should these large charities (say those that take in over 100k per year) have to pay a tax or charge to meet the cost of regulation?


There's been a couple of threads on boards about the charity sector and here's one more but I hope im adding something new to the debate. I'm gonna come clear and say that i'm completely in favor of regulating charities and see no reason why they would not meet the cost. I worked for one of the large Irish charities (i won't name) and was shocked by what I saw as a disgusting lack of regard for those on who's behalf huge amounts of money were collected. Instead from what i could see the emphasis was on looking after a large and privileged group of senior managers.

I think a lot of people have turned away from charity in Ireland and have become very cynical because of CEO salaries, chugging, lack of accountability etc. I think charities can be very important and some people really do rely on them for their welfare. I know some charities are talking about finding it much harder to bring in money these days and while some of this is down to the economic situation more than we realise is due to people not trusting Irish charities. I belief that the benefit to honest charities of independent regulation would outweigh the cost.


Would people have more trust in an independently regulated system and should charities meet the cost?

miju

Charities shouldnt pay for their own regulator because then it is not independant.

BUT (and this is coming from someone who has responsbility within a charitable organisation already) I have a HUUUUGGE problem with some charities in this country who literally exist to make money first , pay salaries and afterwards give the leftovers to their "cause".

The charity sector in Ireland has become a large and profitable industry within itself and is growing year on year. The problem is that because it's turning into an "industry" it is making it harder and harder for the genuine charities to make money.

As an example of some of the kind of shite that goes on read this the most relevant extract which is below in regards to Irish Air Ambulance

Medical Independent wrote:

However reports surfaced in mid-2009 from the BBC revealing that the group had spent 90 per cent of the cash it raised in its first year on wages and overheads.

Of the total €831,000 it had raised at that stage, more than almost €600,000 had already been spent on running the charity, the BBC claimed.

In April 2010, the charity finally issued a statement clarifying its position, and revealing it had dissolved the old association and had set up as a new registered charity.

The statement confirmed that in the period to March 31st 2008 the charity raised €230,000 but spent €208,000.

It raised another €568,000 in the year ending March 31st 2009 but spent £486,000, while from April 1st 2009 to April 2010 (cessation) it raised €442,000 but had already spent €507,000 (€376,000 on salaries and expenses, €40,000 on office costs, €9,500 on coin handling costs, and €79,900 on other overheads).

boo3000

I don't think it would affect the independence of the regulator if its financing was compulsory by charities over a certain income.

I suppose you could argue that the regulatory body might be inclined to favor more profitable charities to guarantee it's own existence but i think this could be avoided by structuring the legislation correctly. Have it so that if there is ever a concern that the regulatory costs aren't met they would be funded directly from government or the national lottery?

I know this idea isn't fair on the honest charities but i think restoring public confidence would outweigh any costs.

There's been a couple of threads on boards before and i know from generally speaking to people that a large section of Irish people have just lost faith in charities. That's a pity but not unexpected if you know what some charities get away with.

miju

boo3000 wrote: »

There's been a couple of threads on boards before and i know from generally speaking to people that a large section of Irish people have just lost faith in charities. That's a pity but not unexpected if you know what some charities get away with.

I don't think is strictly speaking true though because you only have to look at what the charities are pulling in every year.

DublinWriter

miju wrote: »

I don't think is strictly speaking true though because you only have to look at what the charities are pulling in every year.

....vs what they actually pay out in to the causes they represent.

I've heard say that most of the 'big-boys' only pay out between 5% to 15% of their net earnings.

This ratio has to be made public. Most of the Chairpeople of the big charities in Ireland pull in six-figure salaries.

Don't expect any controversial RTE expose of this anytime soon as the big charities continue to be the organisation's most loyal purchasers of advertising time.

A good starting point is to look at the current debacle with Goal and John O'Shea.

boo3000

miju wrote: »

I don't think is strictly speaking true though because you only have to look at what the charities are pulling in every year.

I know there still making a fortune but there have been reports that it's fallen off significantly the last few years. Also and at the risk of sounding ageist i think a lot of it's generational. I think younger people are far more cynical about giving to charity so revenues will continue to drop until there is trustworthy regulation.

It really sickens me what some of these so called charities get away with. There are many vulnerable people whose only hope of a decent standard of living is through charity and i think a lot don't get it because of the greed and dishonesty of those that are purporting to be helping.

I'm very wary of government services being outsourced to charities also. I think in many cases this is just to avoid responsibility.

micosoft

DublinWriter wrote: »

....vs what they actually pay out in to the causes they represent.

I've heard say that most of the 'big-boys' only pay out between 5% to 15% of their net earnings.

This ratio has to be made public. Most of the Chairpeople of the big charities in Ireland pull in six-figure salaries.

Don't expect any controversial RTE expose of this anytime soon as the big charities continue to be the organisation's most loyal purchasers of advertising time.

A good starting point is to look at the current debacle with Goal and John O'Shea.

I agree that far stronger regulation is required and should be paid for by the sector (Someone has to pay). In fact the bigger charities have been asking for this for a long time. Dochas and the Wheel who are representative bodies are asking for it - unfortunately it simply is not a governmental priority at this time.

With regard to your comments about the larger charities - they are simply untrue. It's irritating to see someone state a figure of 5-15% when the true information is freely available on charity sites in the form of audited accounts. Not only that, the larger charities get a lot of money from institutional funders such as Irishaid who audit the organisations regularly to ensure compliance. The actual figure is the reverse - roughly 85-95% spent on programmes. With regard to Goal, despite it's obvious governance issue (which needs to be resolved and has done great damage to Goal and the sector), there has been no question of any money being wasted or misappropriated.

With regard to salaries, the larger charities have substantial budgets and staff. Concern for example have over 3500 staff and €160million euro and operate in 80 countries. Do you really think that you can get a competent person to run an organisation of that scale for less then six figures? These are professional organisations - the well meaning amateurs are long gone because it's been recognised they do more harm then good.

I would not deny the sector has serious problems that need addressing but lets discuss that on the basis of facts and not "I've heard" rumours.

Finally I really do think that a consolidation of the sector is as needed as "regulation". Many of the small charities add little to their chosen cause, and the smaller they are the more gets spend on overheads and less on beneficiaries. There is also a stupid amount of duplication. How many cancer charities do we need exactly? How much of a crossover with HSE do we need? How much is this about Ego? How about banning "informational" charities who regurgitate medical information from the internet in ad's?


My preferable solution is a standard mark like the energy efficiency mark like this to make it easy for donors esp on the street. It would tell you amount going to the cause, how relevant the cause was, whether the state was providing the service as well etc.

Jellybaby1

I am just an ordinary punter and as such I find this thread very interesting. I have often asked myself this question of where the money actually goes. Okay, the bigger charities do publish accounts which can help in deciding to donate or not, but what about smaller charities? I recently was asked to make a donation to a charity that someone set up themselves to ‘provide the needs of a particular village in Africa’ that someone had visited. While others obediently donated, I did not, as all I heard were alarm bells. If I visited Africa would I be tripping over numerous charities from various countries, all providing the same needs? I have become more and more wary of charities lately. I am very unhappy with six figure sums being paid to CEO’s of any charity.

tomtherobot

micosoft wrote: »

I agree that far stronger regulation is required and should be paid for by the sector (Someone has to pay). In fact the bigger charities have been asking for this for a long time. Dochas and the Wheel who are representative bodies are asking for it - unfortunately it simply is not a governmental priority at this time.

I could be wrong but i don't think that anyone in the sector is saying they should be paying for it.

micosoft wrote: »

It's irritating to see someone state a figure of 5-15% when the true information is freely available on charity sites in the form of audited accounts. Not only that, the larger charities get a lot of money from institutional funders such as Irishaid who audit the organisations regularly to ensure compliance. The actual figure is the reverse - roughly 85-95% spent on programmes.

Problem is those audited accounts are vague, we don't get a full breakdown on individual salaries, expense account,s bonuses etc so it's ripe for abuse. Also a lot of charities are also funded directly by government to provide services.

micosoft wrote: »

Do you really think that you can get a competent person to run an organisation of that scale for less then six figures? These are professional organisations - the well meaning amateurs are long gone because it's been recognised they do more harm then good.

I can agree with this to a point. but a six figure sum is 100k and we're often talking significant multiples of this. Also if your accepting a large six figure sum to run a charity your doing so purely as a professional and should be subject to the strictest accountability. Im not going to blindly hand over hundreds of millions to a solicitor, bank manager, dentist and just trust they will see it all goes to the poor and needy. Why should i just trust the professionals who run a charity.

micosoft wrote: »

I would not deny the sector has serious problems that need addressing but lets discuss that on the basis of facts and not "I've heard" rumours.

The problem is because of the lack of accountability there is a lot of rumour. For example, i've heard that the head of one of the prominent Irish is taking home 800k per year when all the bonuses, perks, expenses are included. I believe that this is true so show me the facts that it isn't, you'll find you can't because this charity doesn't publish the full details of it's CEO's package.