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Ireland's political and cultural magazine
July 2016 1 7
T
he World Giving Index consistently
ranked Ireland in the top five until
2015, when it dropped to its lowest
rank of ninth perhaps due to certain
scandals in the Irish charity sector.
Before the recent revelations concerning Con-
sole there had been a number of high-profile
scandals over the last five years, affecting the
reputation of the sector as a whole. To-date,
there are 18,543 civil society organisations in
Ireland, with just over 8,000 charities.
While reputational damage can be difficult to
quantify, charities have reported a drop in their
fundraising income in the wake of each contro-
versy. A survey conducted by The Wheel, a
national representative network for the volun-
tary sector in Ireland, in 2014, showed that 59%
of the 297 charities surveyed reported a drop in
public funding (by as much as 10%) from the
previous year. Reductions in government fund-
ing, largely due to austerity measures in the
past few years, have further savaged charity’s
income. Consequently, in the past few years
charities have seen their income shrink while
demand for their services continues to grow.
Historically, charities have relied on people
giving up their time and money to a help others.
However, the latter half of the Twentieth Cen-
tury saw charities' operational plans shifting
towards private-sector business models, and
charities are fast becoming accountable to the
standards and norms of the private sector.
While the ongoing Console scandal gathers
headlines and the charity is now to be wound
up, it is important to note that fraud can occur
in any sector. Nevertheless, there are certain
measures that can be undertaken to mitigate
the dangers.
More stringent governance codes, tighter
regulations, stricter oversight and greater
investigative powers must be imposed. In par-
ticular, certain provisions of the Charities Act
2009 have yet to be passed. Part IV of the Chari-
ties Act 2009 would grant the Charity Regulatory
Authority investigative powers to take pre-emp-
tive action into the affairs of charitable
organisations. This includes the power to
require them to produce documents, entry and
search of premises, and the ability to impose
intermediate sanctions under Section 73(5)(a),
including the removal of the charitable organi-
sation from the register for such period as the
Authority deems necessary. Moreover, in order
to ensure uniformity, the Charity Regulatory
Authority should set a financial reporting stand-
ard for charities, such as the Statement of
Recommended Practice for Financial Reporting
by Charities (the SORP).
The role media play in shaping public percep-
tions of the charity sector is crucial when
assessing a charity’s virtuousness. Media cov-
erage of a controversy, though appropriate in
holding management to account, can foster
negative perceptions which damage an entire
sector. This is not surprising given the inbuilt
cognitive bias called the availability heuristic:
a quick method for making judgements about
the likelihood of something happening.
Altruism Ireland was formed to build up a
partnership of trust with the general public; a
trust founded on transparency. Transparency is
more than a buzzword. The truth is people
won’t, and shouldn’t, donate their hard-earned
cash unless there is trust that the money is
being suitably spent. Therefore, each charity
that comes on-board its platform is given a
transparency score out of ten, based on three
main criteria of communicating their projects,
results and financial standing. The latter
includes the requirement to disclose a CEO’s
salary. The reason for this is not to expose indi-
viduals, but to help combat public scepticism
around ‘golden salaries’. In May of this year, The
Journal.ie reported on top charity executives
earning in excess of €100,000 euro a year. What
Altruism Ireland asks is for people to make
informed decisions. Ultimately it is a matter of
personal sensitivity to decide if a salary is
appropriate for the level of responsibility of a
CEO, but before making any judgements about
salaries, Altruism Ireland encourages people to
look at CEO compensation as a percentage of
total expenses. For example, a charity with an
annual income of €10m is more justified in
paying their CEO €100,000 a year (1%), com
-
pared to a smaller organisation with an income
of €1m.
Furthermore, unlike private fundraising plat-
forms that charge in the region of 5-7% on
donations, Altruism Ireland charges 0% com-
mission, ensuring more of the money that
people raise goes directly to the charity and
into the hands of those who need it the most.
Donating and fundraising for charity ought not
to be driven by a for-profit motive.
Negative perceptions, however, continue to
have real-life consequences. The World Giving
Index; an annual report published by the Chari-
ties Aid Foundation which ranks how charitable
a nation is, consistently ranked Ireland in the
top five. That was until 2015, when it dropped
to its lowest rank of ninth. Again, it is hard to
quantify whether this is a direct result of certain
scandals in the Irish charity sector, but it seems
likely to have played a part. In order to combat
a further fall and the lack of dialogue between
the public and the charity sector, Altruism Ire-
land seeks to act as a bridge between the two
in order to generate a better understanding of
how the sector operates, and in doing so facili-
tating trust.
The ultimate aim of all involved in the charity
sector is not only to ensure Ireland’s status as
a highly generous society, but to turn it into the
most efficient and transparent one.
John Clarke is Relationship Manager of
Altruism Ireland
Some Consolation
Though there are substantive problems,
charity transparency is improving
by John Clarke
The World Giving Index
consistently ranked Ireland
in the top five until 2015,
when it dropped to its lowest
rank of ninth, perhaps due
to certain scandals in the
Irish charity sector
Charity sector in numbers
