Consultation on Implementation of Charities Act

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This document provides a summary of the submissions made during the public
consultation conducted by the Department of Justice and Equality between 23
January 2013 and 20 March 2013 on proposals for the implementation of the
Charities Act 2009.
This summary is intended to capture the key points raised during the
consultation. It is not possible within the scope o f this document to reflect fully all
the points raised by participants in the consultati on. Written submissions received
during the consultation are published on the websit e of the Department of Justice
and Equality at . Please note that we are only able to publish
submissions with the agreement of the author(s).
This document provides some facts and figures on th e consultation, and a
question by question summary of key points raised i n response to the 12
consultation questions contained in the consultatio n document.

Facts and figures on the consultation

This consultation was open from 23 rd January 2013 to 20 th March 2013.
Submissions were invited via an online submission f orm on the website of the
Department of Justice and Equality. For respondents unable to make a
submission online, it was also possible to send a s ubmission by post. A public
consultation meeting was held in Department of Just ice and Equality on 15 March
2013. In all, 163 submissions were received. 131 (8 0.4%) of these were from
organisations and 32 (19.6%) from individuals. The organisations were
categorised as follows: Charity (87), Community and Voluntary (12), Account ancy
(6), Educational (3), Central Government (7), Legal (2), Other (9), Not
Categorised (5) . Among the charities that responded, all ICNPO gro ups were
1 116 (71.1%) respondents indicated that they were w illing for their
submission to be published. The analysis summarised below was conducted on
the full set of submissions.
Question by question analysis of submissions

This section gives a summary of some of the main po ints that were made in the
submissions, arranged according to the 12 consultat ion questions. It is not
possible to reflect all the points made in the subm issions, so the summary below
focuses primarily on points that were made in numer ous submissions. It does not
reflect all points made in numerous submissions. It does not attribute points
made to particular submissions. For a fuller view, please refer to the submissions
1 The Johns Hopkins University International Classifi cation of Nonprofit Organisations (ICNPO)
identifies 11 groups as follows: culture and recrea tion; education and research; health; social
services; environment; development and housing; law , advocacy and politics; philanthropic,
intermediaries and voluntarism promotion; internati onal; religious congregations and associations;
business and professional associations, unions.

What, in your opinion (or that of your organisation if you are responding on
behalf of an organisation), should be the top three priority areas of activity for
the Charities Regulatory Authority in its first thr ee years of existence, and

Summary of Reponses to Question 1

The three priority areas identified in the highest number of submissions are given
below. Many responses to this question did not incl ude the reasons why the given
priorities were selected. However, some responses d id include reasons and we
have reflected some of the more commonly given reas ons below.
Area of activity
Creation of a statutory register of charities
Some common reasons given for why this should be a priority area of activity
 The potential value to a wide variety of individual s and organisations,
including donors (both private and corporate); char ities; volunteers; state
funders; and regulatory bodies of having an accurat e and publicly
available register of all charities operating in Ir eland was identified in
 The existence of an accurate and comprehensive regi ster of all charities
currently operating in Ireland was identified in su bmissions as essential to
the successful regulation of the charitable sector.
 The register was identified in submissions as an im portant mechanism for
increasing transparency in the charitable sector, w hich in turn is regarded
as important to the creation and maintenance of pub lic trust and
confidence in charities.

Area of activity
Provision of advice and support to charities
Some common reasons given for why this should be a priority area of activity
 Many submissions emphasised the importance for char ities of
understanding what they need to do in order to ensu re that they are
compliant with the regulatory requirements being in troduced through the
2009 Act. Clear communication on requirements and a dvice on how best
to meet them should therefore be provided by the Au thority.
 A related issue identified was the importance of cl ear communication both
to charities and members of the public about the ro le and powers of the
Authority and the timeframe for the roll out of its activities. A number of
submissions proposed that the Authority’s investiga tive and enforcement
activities should only be rolled out following a su fficient lead-in period in
which the emphasis would be on educating and advisi ng charities about
their obligations.
 Numerous areas were identified in which respondents felt it would be
helpful for the Authority to develop guidance. Thes e included: governance;
fundraising; financial and activity reporting; duti es of trustees; financial
and risk management; application of public benefit test; and establishing
and winding up a charity.

Area of activity
Activities to increase public trust and confidence in charities


Some common reasons given for why this should be a priority area of activity
 Many submissions identified a role for the Authorit y in engaging with the
public to raise awareness of its own mission and ma ndate. This could help
to enhance public confidence in the charitable sect or by demonstrating
that it is subject to regulation. It was acknowledg ed that this would
demand resources.
 More broadly it was felt that while the publication by the Authority of
information about charities could help to increase trust and confidence,
this activity needed to be coupled with an effectiv e monitoring,
investigation and enforcement function in order for the full benefit to be
realised in terms of increased public confidence.
 Increasing public trust and confidence in charities is an explicit function of
the Authority. Some submissions identified that est ablishing how this
should be achieved and how measured should be an ea rly priority activity.

What are the main reasons you would consult the Reg ister of Charities?

Summary of Responses to Question 2
Reasons commonly given are summarised below. Many o f the reasons given
implied support for the inclusion in the register o f information fields additional to
those mandated by section 39(7) of the Charities Ac t. This is dealt with in the
summary of responses to consultation question 4 bel ow.
 To establish that a given charity is a genuine regi stered charity and
complies with regulatory requirements.
 To seek information and conduct research on specifi c charities or
categories of charities, or on the charitable secto r as a whole. Areas
identified for information seeking and research inc luded contact
information, governance arrangements, charitable ac tivities, advancement
of charitable purpose, use of funds raised, trends in staffing and
 As a resource for charities themselves to facilitat e collaboration and avoid
duplication of effort.

How often do you think you would consult the publis hed statutory Register
of Charities?

Summary of Responses to Question 3
Among respondents who gave a specific estimate, the most common estimate
was several times a year. Many responded that the f requency of their use of the
register would depend in part on the type and quali ty of information available and
the form in which it was available.
What, if any, information additional to that required under Section 39 (7)
of the Charities Act do you think should be include d in the published
Register of Charities?

Summary of Responses to Question 4

Submissions contained a wide variety of suggestions for additional information
that might be included in the Register of Charities . A broad categorisation of
recurring suggestions is given below:  Information aimed at making it easier to identify a nd contact the charity
and its subsidiaries and branches.
 Information about the income of the charity, its so urces and uses,
together with a link to the charity’s annual accoun ts.
 Information about the legal structure (including li nks to constitutional
documents) and governance practices of the charity, and its status in
other jurisdictions if applicable.
 Information about the activities of the charity, bo th charitable and
commercial, together with a link to the charity’s a nnual report.
Information on the charitable objects of the charit y and how these are
fulfilled by its activities.
 Information on the staffing and organisational stru cture of the charity.
 Evidence of compliance with regulatory requirements , including codes of
practice if applicable. Information on any enforcem ent actions taken by
the Authority with respect to the charity. A list o f any organisations that
have been removed from the Register, together with the reason(s) for
their removal.

Do you agree with the proposed fee structure?

Summary of Responses to Question 5
38% of respondents stated that they agreed with the proposed fee structure,
while 53.3% did not, and 8.7% provided no response. Where there was
disagreement with the proposed structure, a number of recurring reasons can be
identified. These are summarised below.  The proposed structure places a disproportionate bu rden on lower and
middle income charities.
 The use of gross annual income to calculate the ban ds could be
problematic for some categories of charities, in pa rticular those that
receive substantial state funding to meet salary co sts (e.g. schools), and
those that have multiple subsidiary bodies.
 Lack of alignment between proposed fee bands and pr oposed financial
reporting thresholds.
 Concern was expressed in a number of submissions ab out possible future
increases in fee levels.

Some respondents were opposed to the levying of any registration fee. In some
cases this opposition was general, while others fel t that specific types of charities
should be exempted from the requirement to pay a fe e. Reasons given included
the following:
 Concern that charities that already pay regulatory and other statutory fees
to other state bodies would incur a double burden.
 Concern that payment of a regulatory fee could disc ourage charitable
 Concern that reliance by the Authority on registrat ion fees for part of its
income could compromise its independence.

 Concern that charities, many of whom have experienc ed recent reductions
in income, cannot afford to pay a registration fee.
 Concern that the costs of levying the fee, both in terms of administrative
costs and potential adverse consequences, will outw eigh any benefits
 Concern that the levying of a fee on all registered charities could
discourage non tax-exempt charities from meeting th eir statutory
obligation to register.

A further point made in a number of submissions was that it would be important
both to charities paying the fee and to the donor p ublic that sufficient information
be made available about the costs of running the Au thority, the proportion of
these costs being met by the registration fees and the specific uses to which the
registration fees were put.
If you answered “no” to question 5 above, what alte rnative fee structure
to the one proposed above would you prefer to see put in place?

Summary of Responses to Question 6
Most submissions that replied to this question prop osed alternatives that
rebalanced the fee structure in favour of lower inc ome charities. These included:
a waiver for small charities; increasing the thresh old under which only a token fee
would be paid; reducing the level of the lowest “re al” fee from €75; creating
additional upper bands for higher income charities; and allowing charities with
numerous constituent bodies to be covered by a sing le fee (e.g. schools).

An alternative suggested was for a basic flat regis tration fee to be accompanied
by a range of specific service charges, for example for filing of annual returns and
changes to registration details. Late filing penalt ies were also proposed, as was a
charge for access to information held by the Author ity on registered charities.

It was also suggested that the fee could be set as a percentage of a charity’s
Several submissions proposed that the fee bands be aligned with the financial
reporting thresholds.
Do you agree with the proposed income thresholds fo r financial accounting
and reporting by charities?

Summary of Responses to Question 7
53.3% of respondents said that they agreed with the proposed thresholds, while
39.8% said that they did not agree with the propose d thresholds, 6.9% provided
no response.
Among those who did not agree, reasons commonly giv en are summarised below.
 Concern at the potential for the financial reportin g requirements to impose
an undue burden on charities, and in particular sma ller charities. This was
accompanied by proposals to increase all thresholds , in particular the audit
threshold of €100,000, due to concern at the cost o f compliance.

 A countervailing view that the proposed thresholds may be insufficient
from a financial management and accountability pers pective for lower
income charities and that even the accounts of very small charities should
be subject to some regular reporting requirements a nd the possibility of
external scrutiny.

 The merit of aligning the thresholds with those tha t apply to charities that
are registered as companies. Also alignment with th e UK Charity SORP
(Statement of Recommended Practice).

Other points raised and suggestions made included:  A system of random checks by the Authority on the a ccounts of all
charities, in particular small charities not requir ed to file accounts
 The provision of clear guidance by the Authority on all aspects of financial
accounting and reporting, including on what constit utes ‘proper books of
account’ and on the role of independent examiners.
 The need for further consultation on any regulation s to be made in this
 Ongoing review of thresholds and amendment if it em erges there is an
undue burden on any category of charity.
 Flexibility within the thresholds to accommodate va riations in income.
 The inclusion of value of assets and numbers of emp loyees/volunteers as
additional criteria for determining accounting and reporting requirements.
 The development of specified reporting procedures u nder the IAASB
International Standards on Assurance Engagements (I SAEs) as an
alternative to audit for some charities.

Are there alternative income thresholds to those pr oposed above that you
would prefer to see put in place?

Summary of Responses to Question 8
29.5% of respondents offered alternative thresholds , while 55.8% did not. 14.7%
provided no response.
The most common alternative lower threshold propose d was €25,000, followed by
€50,000. The most common alternative upper (audit) threshold proposed was
€250,000, followed by €500,000. Some submissions pr oposed that the thresholds
be aligned with the Companies Acts or the UK Charit y SORP.

Other points raised included:  That it would be preferable if the audit/examinatio n requirements for a
particular threshold applied only once the threshol ds had been exceeded
for two or three consecutive years.
 The need to make appropriate arrangements for chari ties that are legally
independent entities but belong to a national netwo rk with an aggregate
income that would put them over a threshold.

What information would you like to see included in the annual financial
reports provided by registered charities to the Cha rities Regulatory

Summary of Responses to Question 9
A large number of responses to this question suggested that the content of
financial reports should match the requirements of the UK Charity SORP, adapted
and simplified as necessary for smaller charities. It was noted that SORP requires
some information on charitable activities, in addit ion to financial information.

Specific content areas proposed are summarised belo w.

Information on Income

 Information on income, including sources (grants; i ncome earned from
commercial activities; contracts for services; dona tions; legacies; interest
and investments, etc.) and restrictions.

Information on Expenditure

 Information on expenditure, including a clear break down showing
expenditure on charitable programmes; administratio n (including
governance costs); fundraising (including advertisi ng, professional fees
and commission); salaries, pensions and benefits (f ront-line and support
staff); government taxes and charges; and care of m embers (for religious

Other Information

 Information on assets, including maintenance costs
 Reserves policy
 Long-term expenditure commitments
 Information on fundraising methods and practices
 Statement of compliance with any relevant codes of practice
 Statement of interests
 Statement of compliance with Department of Public E xpenditure and
Reform Circular 17/2010
 Statement of any payments made further to an agreem ent under s.89 of
the Charities Act 2009

Other points raised included:  That it would be preferable to align the requiremen ts with those of the
Companies Acts in order to ensure consistency acros s the charitable
 Concern that the Charities Act requirements in rela tion to financial
accounting and reporting will apply only to a relat ively small proportion of
registered charities and this has the potential to create difficulty.
 The importance of clear and comprehensive guidance from the Authority
on reporting requirements, including the provision of templates.
 The need to avoid a double reporting burden for any charities that are
required to submit accounts to other Government bod ies, possibly through
development of a single reporting standard.
 That it would be useful if financial information on charities could be
published by the Authority in a format that allowed analysis, including
comparative analysis.

 That alignment of requirements with those applicabl e in neighbouring
jurisdictions would be helpful.
 That any arrangements put in place should be subjec t to review and
amendment where necessary.

What information would you like to see included in the annual activity
reports provided by registered charities to the Cha rities Regulatory

Summary of Responses to Question 10
Suggestions commonly made for information to be included in the annual activity
reports of charities are summarised below. Some of the areas covered were also
proposed for inclusion in the financial reports.
Basic Information  A statement of the vision, mission and values of th e charity, as well as its
charitable objects.
 Changes to key registration information including t rustees, registered
office, charitable objects.
 A description of the main activities (including fun draising and commercial
activities) carried out by the charity during the r eporting period. Special
focus on activities commenced or discontinued durin g the reporting period.
 An explanation of why the particular activities hav e been selected, and
how the activities delivered public benefit and con tributed to the
advancement of the charitable purpose of the charit y. Evidence of social
impact, on the client group and more broadly (quali tative and
quantitative) could be included where available.
 The geographical locations of activities.

 An account of whether objectives and targets for th e year were met, with
reasons given for any that were not met, factors af fecting performance,
and lessons learned.
 Information on the approach taken to impact assessm ent and programme

 Some information on planned activity for the next r eporting period,
including objectives and targets, where applicable.

Statements and Policies
 Statement of compliance with relevant legislative a nd regulatory
requirements including any applicable codes of prac tice (e.g. governance,
 Information on risk management.
 Information on governance, including approach to bo ard performance and
 Reserves policy.
 Data protection policy.


 Some basic financial information, including income received during the
reporting period (with a breakdown of sources, and to include estimated
value of goods donated) and main areas of expenditu re. This was deemed
important particularly because many registered char ities will not be
required to file accounts with the Authority.
 Information on staffing, including numbers of emplo yees and volunteers,
some information on salaries and benefits, approach to professional
 Statement on asset base and exposure to debt.
 Information on the cost of service delivery.
 Information on steps taken to accommodate and/or ad dress reductions in
income, where applicable.
 Information on the extent to which expenditure conc urred with donor

Format of Reports  Some respondents felt the report should be presente d in a prescribed form
and that it would be important for the Authority to develop a template for
 The report should be made on an online form and cou ld be pre-populated
with existing information from the register in orde r to reduce the
administrative burden for the reporting charity.

Other Points Raised
 The focus of reports should be on ‘telling the stor y’ of the reporting period
with an emphasis on information of relevance and in terest to the public.
Information should be consistent with other sources , capable of validation
and drawn from a clear evidence base.
 The level of detail should be proportionate to the size of the charity, but
the essential information sought should be consiste nt across the sector.
Notwithstanding this, in developing reporting templ ates, cross-referencing
with existing requirements for any sub-sectors, e.g . approved housing
bodies, should be carried out.
 The report should be formally signed off by the Cha rity Trustees.
 Some respondents recommended alignment with existin g requirements for
Directors’ Reports under the Companies Acts.
 Report requirements should acknowledge the commerci al sensitivity of
certain information, e.g. fundraising innovations. Charities should not be
required to disclose such information.
 There could be voluntary disclosure of any ‘notable ’ information that may
be considered to be in the public interest (or alte rnatively to confirm that
no such information exists).
 Charities should have the discretion to provide add itional information.
 A means of benchmarking the effectiveness of charit ies should be
developed, in order to facilitate comparative analy sis of reports.

What type of report and accounts filing system would you be most likely to
use? (For charitable organisations only)

Summary of Responses to Question 11
66.9% responded that they would be most likely to u se an online filing system for
annual reports and account, while 7.4% responded th at they would be most likely
to use a postal system. 1.2% wanted to allow for bo th, and 24.5% provided no


If there are any other comments or suggestions you would like to make
about any of the issues dealt with in this consultation document, please
add them here.

Summary of Responses to Question 12
A wide range of issues emerged in responses to this question. To facilitate
analysis of this part of the consultation, we have grouped some more commonly
made points into themes and provided a brief summar y below. Many of the points
were also contained in responses to other consultat ion questions.

Supporting charities in meeting the new requirement s
There was support for an early emphasis on communic ation and education to help
ensure that charities are well prepared and equippe d to meet the new
requirements before they are in force. Many respond ents emphasised the need to
avoid an undue regulatory burden, in particular on smaller charities, and also
where there is a risk of a double burden. Clear gui dance and communication and
strong leadership from the Authority were deemed to be important in avoiding
this. There was widespread support for the developm ent of reporting guidance
and templates.
Managing the transition process
The importance of a smooth transition of the Office of Commissioners of
Charitable Donations and Bequests for Ireland into the new Authority was
mentioned. There was support for a phasing in of re porting requirements by
reference to charity size, on the basis that smalle r charities with more limited
resources might need additional time to adjust. Som e concern was expressed
that some organisations placed on the register by v irtue of their CHY status might
not in fact meet the definitions/requirements of th e Act for charitable
organisations. A process of liaison with CHY charit ies in advance of the publication
of the register would be required to address such i ssues.

Resourcing and governance of the Authority itself
A number of submissions emphasised the importance o f transparency and
accountability of the Authority itself. Membership of the Authority should reflect
sectoral and general public interest. Several submi ssions stressed the role of
resources in ensuring that the Authority is fit for purpose and can discharge its
functions effectively. In particular, the planning and delivery of the outreach and
communications activities that will be required in order to inform charities and the
public about the role of the Authority and the obli gations of charities under the
Act, will require to be resourced. The establishmen t of the necessary IT systems
to support the operation of an online registration, reporting and payment system
will also need to be resourced.
Areas for future development
Submissions contained a large number of suggestions for other activities that
might be undertaken by the Authority, in consultati on with charities and relevant
authorities and professional bodies, as the impleme ntation process progresses. It
was acknowledged that some of these would require a mendments to the Charities

These included:
 The development of guidance for Charity Trustees.
 Work to support the monitoring and evaluation of th e effectiveness of
charity programmes and activities.
 Approval of the Statement of Guiding Principles for Fundraising and the
Governance Code for Charities, and further developm ent of rules and
guidelines for fundraising and management of funds.
 Additional consultation between the Minister, the A uthority, An Garda
Síochána and fundraising charities on the collectio n permits system, to
take place before the commencement of section 93 of the Act which
extends the requirement for permits to non-cash col lections.
 Consultation with the accounting sector on any regu lations, guidance or
templates for charity accounting.
 Consultation on registration and reporting requirem ents for “connected
charities” (charities with multiple CHY numbers and CHY numbers with
multiple charities).
 The development of a searchable database from regis tration and reporting
data to facilitate the production of sector informa tion, sub-sector analyses
and trends.
 Monitoring and investigation functions that strengt hen over time and
should support anti-moneylaundering efforts.
 A complaints reporting system to include provision for anonymous
 Some submissions expressed concern at the lack of c omprehensive
coverage of the financial reporting provisions of t he Act and suggested this
should be re-examined.
 The value of registering and regulating schools as charities was questioned
by some respondents.
 A re-examination was proposed of the status of spor ting bodies with
respect to the Charities Act on grounds inter alia that they deliver public
benefit, but also to address concern that there is a risk sporting bodies
might be disadvantaged in fundraising in comparison with registered
charities once the register is published.
 A re-examination was proposed of the exclusion of t he promotion and
protection of civil and human rights as a charitabl e purpose.

Other points made in responses to Question 12
Many other views were expressed in responses to thi s question. It is not possible
to reflect all of these. Some more commonly express ed views are paraphrased in
the statements below.  The priority for all charities should remain advanc ement of charitable
purpose and meeting the needs of clients and target beneficiary groups.
 Strong governance and accountability are in support of this priority but
should not detract from it.
 Transparency is essential to the successful impleme ntation of this
regulatory regime.
 The position of charities with their head office ou tside Ireland, or with their
head office in this jurisdiction but with all-islan d activities should be taken
into account.

 The position of charity companies should be taken i nto account in framing
reporting templates. In practice there are varying levels of financial
disclosure by charity companies.
 The position of religious charities that devote som e of their resources,
including premises, to the care of elderly members should be taken into
 Some concern was expressed that the application of a registration fee
could have an adverse impact on charitable and phil anthropic giving.
 Some concern was expressed at the potential for the Authority to restrict
the advocacy work of charities.
 The Authority should work with charity umbrella bod ies to ensure clarity of
expectations over the role of the latter.
 The Authority should work with Revenue to provide c lear communication
of the separate roles and responsibilities of the t wo Bodies.
 It will be important to ensure cross-departmental c o-ordination throughout
the implementation process.
 Useful models and lessons learned from neighbouring jurisdictions should
be factored into the implementation process.
 It will be important to establish the Charity Appea ls Tribunal at an early

 The consultative approach to implementation should be maintained
following the formal establishment of the Authority .