Just 64% of charities filed annual reports on time

Public concern about charity governance and financial control, as well as unregistered bodies, remains high, according to the Charities Regulator’s annual report.

Two statutory investigations were opened in 2021, which was the first year that registered charities had to report on their compliance with the Charities Governance Code.

The Charities Regulator is solicitor Helen Martin.

The probes were into the Irish Wildbird Conservancy CLG, and North Inner City Homelessness CLG.

Statutory investigations

Two statutory investigation reports were also published, into Childfund Ireland, and Cabhru Housing Association Services.

The chief executive of the housing charity, or a family member, was found to have made unauthorised personal use of a residence, but the board was found to have taken prompt action once notified.

The report into Childfund Ireland found recruitment issues, with no documented roles and responsibilities for staff, other than the chief executive.

It also found that two members of management were performing a similar role, despite unsustainable cost levels.

Previous reports had found the level of resources directed to senior management to be “excessive and disproportionate” to the size and complexity of the organisation, and that excessive salaries could be “considered tantamount to mismanagement of public funds”.

Queries were also raised about a trip to Zambia made by a staff member, accompanied by a non-staff family member as a “junior ambassador”, of which board members had no recall.

In compliance

A full 69% of charities declared themselves in compliance with governance regulations, but sample submissions were monitored by the regulator in a checking process.

Only 64% of charities, however, filed annual reports within the deadline – ten months from the financial year-end.

The regulator intends to get tough on compliance obligations, according to the annual report, which points out that a “small but significant” number of charities fail to meet their reporting obligations.

While 86% of the public believes that charitable work is important, just 36% have a high level of confidence and trust in charities, according to a 2020 survey conducted by the regulator.

Concerns raised covered matters, such as:

• Governance,
• Legitimacy,
• Financial control,
• Harm to beneficiaries,
• Private benefit,
• Inappropriate political campaigning.

Registrations and deregistrations

The Charities Regulator registered 282 new charities in 2021, including 98 schools.

And 282 charities were deregistered in the same year, a significant jump on the 2020 figure of 96. 

Of the 282 deregistrations last year, 186 existed prior to the establishment of the Charities Regulator in 2014.

These bodies were required to complete their details and file an annual report by April 2016. If this was not done, they were referred to Revenue for checks on entitlement to charitable tax exemption.

If charitable tax exemption is withdrawn, the charity is de-registered.

A further 96 bodies applied for voluntary deregistration, for reasons including mergers, changes to legal form, and fundraising challenges due to COVID-19.

The regulator’s compliance and enforcement unit received 568 public concerns about charities, and closed 543 public concerns.

Classification standard

The regulator also began work on a classification standard for registered charities, which will better enable the production of statistics about the sector.

The Charities Regulator supported 11,500 charities in 2021, and responded to 17,000 contacts.

There are 11,426 registered charities on the public register, which contains details of purpose, staffing, funding, and legal structure.

The legal form of registered charities shows that this includes:

• 3,681 schools,
• 4,670 companies,
• 1,622 associations,
• 33 with royal charter governance,
• 599 trusts,
• 52 friendly societies,
• 35 co-operatives,
• 3 foreign registered companies.

There are:

• 207 animal welfare charities,
• 1,294 community development bodies,
• 1,331 dedicated to poverty relief,
• 1,570 that seek the integration of the disadvantaged,
• 2,150 engaged in community welfare,
• 198 in conflict resolution,
• 260 for the administration of charity-owned properties,
• 286 for the protection of the natural environment,
• 1,021 for the advancement of the arts, culture or sciences,
• 360 for advancement of environmental sustainability,
• 254 for the promotion of religious or racial harmony,
• 1,202 for the promotion of religion,
• 1,294 for rural or urban regeneration.

Based on 2020 figures, just over 30% of charities have an income of between 10k-100k, while 4.8% have an income greater than €5 million.

In all, 14.4% have an income of less than €10k, while 10% of bodies have income of between €1 - 5 million.