Significant developments in charity regulation in 2020 with introduction of Charities Governance Code and launch of 3 statutory investigations
Charities Regulator’s Annual Report highlights its continuing work regulating the charity sector and the importance of good governance in a year when registered charities faced unprecedented challenges
Charity regulation in Ireland saw significant developments in 2020 as outlined in the Charities Regulator’s Annual Report 2020 published today. The Regulator’s sixth full year of operations:
- saw the move from office-based to remote working while continuing to regulate a sector facing unprecedented pressures resulting from the Covid-19 pandemic;
- marked the first year that registered charities were expected to implement the Charities Governance Code with over 1,000 charity trustees attending a Charities Regulator training session on the Code;
- saw the commencement of three separate statutory investigations into the affairs of three registered charities.
In March 2020, the Covid-19 pandemic resulted in the staff of the Regulator moving to remote working. New systems were quickly put in place, including a new phone line, to ensure that the day-to-day regulatory and compliance and enforcement work of the Regulator could continue. This is evidenced by the fact that 912 charities were added to the Register of Charities during 2020 bringing the total number of registered charities in Ireland to 11,426 by the end of the year. A total of 510 concerns about registered charities and other organisations were also closed by year end.
In order to gauge the impact of the Covid-19 pandemic on the sector at an early stage, registered charities were invited to take part in a survey and in May 2020 the Regulator published the Survey Report on the Impact of Covid-19 on Charities. This provided important insight into the immediate issues faced by registered charities as the pandemic took hold.
“The Covid-19 pandemic presented huge challenges for everyone in 2020 and our immediate concern was for the safety of our staff while ensuring that we could operate remotely to provide much needed regulatory support to registered charities and the public as the year and the pandemic progressed”, said Helen Martin, Chief Executive of the Charities Regulator.
“It quickly became apparent that charities were being called upon more than ever to provide vital services at a time when it was becoming increasingly difficult for many charities to provide the services they are so valued for. In recognition of this, the Regulator published guidance, moved its training and seminars online and extended the statutory deadline for submitting annual reports twice during 2020. By the final deadline of 16 December 2020, 78% of charities had submitted their annual reports, demonstrating a clear commitment by registered charities to meeting their annual reporting obligations notwithstanding the difficult circumstances that they faced during the year.”
The Charities Governance Code
A total of 1,064 charity trustees attended one of 34 training sessions provided by the Charities Regulator on the Charities Governance Code. 2020 was the first year that registered charities were expected to have implemented the Code which is a key tool to assist registered charities to comply with their regulatory obligations as charities. The Code sets out the minimum standards that charity trustees should meet in order to ensure their charity is effectively managed and controlled.
Further information about the Charities Governance Code can be found here.
Registration of Charities
The total number of charities on the public Register of Charities by year-end reached 11,426 which shows an increase of 902 on 2019.
Charity trustees are volunteers and include committee members and company directors and are the people who ultimately exercise control over, and are legally responsible for, registered charities in Ireland. There were 74,124 charity trustees on the Register of Charities at the end of 2020 which represented an increase of 6,995 on the previous year.
Some points of note in the breakdown of the Register of Charities as of 31 December 2020 are as follows:
- The most common charitable purposes of registered charities at the end of 2020 were purposes that are of benefit to the community (53.9%), followed by the advancement of education (33%), relief of poverty or economic hardship (7.5%) and religion (6.6%).
- 55% of charities on the Register had income of more than €100,000, 30% had an income of between €10,000 and €100,000 and 15% had an income of less than €10,000. Of the 2,623 charities reporting an annual income of over €250,000 in 2020, 1,063 had income in excess of €1 million. This is an increase of 188 charities on 2019.
- Outside of Dublin which has 3,156 registered charities, Munster has the most registered charities with 3,101, followed by the rest of Leinster (2,564), Connacht (1,612) and Ulster (938). There are 55 NI/UK charities on the Register.
Compliance work in 2020
The Charities Regulator’s sixth full year of operations saw continuing progress in the area of compliance and enforcement.
- The Regulator appointed inspectors to conduct three separate statutory investigations under Part 4 of the Charities Act 2009 into three registered charities. When the Regulator receives a concern, a preliminary examination and risk assessment is conducted and, if warranted, assurances and information are sought from the charity or organisation. Where the Charities Regulator is not assured by the information provided by a registered charity, the Regulator may use powers under the Charities Act 2009 to require information, issue directions, apply sanctions and, where necessary, appoint inspectors to investigate the affairs of the charity.
- There was a total of 466 concerns raised with the Charities Regulator during 2020, a decrease of 28% on 2019. 177 of the concerns received in 2020 related to the legitimacy of an organisation as a charity, most often the issue of bogus clothing collections by entities that are not registered charities.
- 224 (48%) of the concerns received related to the issues of financial controls and transparency, and other governance issues.
“Concerns relating to clothing collections continue to make up a significant portion of the concerns that we receive. In 2020, once again with the support of our colleagues in An Garda Síochána, we ran a campaign urging the public to be vigilant and to always check the Register of Charities before donating through clothing collections,” said Helen Martin, commenting on the number of concerns received.
“When it comes to the important issue of governance within registered charities, It is important that the public are aware of the part that they play in maintaining a charity sector that is worthy of their confidence and that is trusted for the vital services registered charities provide across the country and abroad. In addition to checking the Register of Charities before donating to a charity, any member of the public who has a concern that a charity or other organisation may be breaching charity law should contact our Compliance and Enforcement Unit using our online concerns form which is available on www.charitiesregulator.ie. While a concern can be raised anonymously, it is a lot easier for our team to carry out a thorough investigation if the person raising the concern provides their contact details as it means we can follow up to ensure that the nature of the concern and the basis for it, is fully understood.”
2020 in numbers
- 11,426 charities on the Register of Charities at the end of 2020
- 134 charities were deregisterd having lost their charitable tax status
- 3 statutory investigations launched
- 466 concerns received by the Regulator, 177 of which related to legitimacy of an organisation as a charity, most often bogus clothing collections
- 510 concerns dealt with and closed in 2020
- 1,064 charity trustees completed training offered by the Charities Regulator on the Charities Governance Code
- 1,276 people attended a Charities Regulator seminar either in person or virtually
- 148,730 visits to the Charities Regulator’s website, up 20% on 2019
- 18,020 contacts from charities, the public, beneficiaries and other stakeholders
Commenting on the launch of the Annual Report 2020, Patrick Hopkins, Chairman of the Charities Regulator said: “The black swan events of 2020 catalysed rapid, drastic changes to the way in which we all live and work. The primary focus of the Charities Regulatory Authority was to ensure business continuity and continued delivery of services in a manner that safeguarded our employees and the wider Charities Sector. The flexibility and speed with which the Authority adapted to the abrupt changes in 2020 are commendable. I would commend the management and staff of the Authority for their commitment and dedication in ensuring continuity of services throughout 2020. On behalf of the Board and the staff of the Charities Regulator, we would therefore like to thank all of our stakeholders for their continuing support and engagement with our work.”
Minister Joe O’Brien T.D., Minister of State with responsibility for Community Development and Charities welcomed the publication of the Annual Report, saying: “The 2020 report demonstrates the important and necessary work of the Regulator in helping to strengthen public confidence in the charities sector, enhance compliance measures and ensure proportionate regulation”. The Minister continued, “In a year that presented unprecedented challenges for both sector and society, I wish to commend the adaptability, hard work and commitment shown by organisations in the sector that responded with agility and urgency to the crisis and managed to provide vital supports to many at a time of increased need. Similarly I must comment the Chair and the Board of the Regulator, management and staff, in recognising and responding to the practical impacts of the COVID-19 pandemic on registered charities.”
You can read the full Report at the following link: Annual Report 2020
A full list of registered Irish Charities can be accessed here on the Register of Charities.