Update on Reform of the Charitable Sector

December 2006

Reform of Charity Sector

A three tiered process that will radically alter the legislative and regulatory environment that the voluntary sector operates in is now in motion.

The General Scheme for the Charities Regulation Bill 2006

In March of this year the Department of Community, Rural and Gaeltacht Affairs published the Heads of the General Scheme for the Charities Regulation Bill 2006.This marks a significant move towards the mandatory registration, regulation and supervision of organisations that work for "charitable purposes". A Regulatory Body will be put in place that has the power to determine whether charities fall under the new definition of "charitable purposes" which will be defined for the purposes of law for the first time in Ireland. It is important to note that advocacy, campaigning or lobbying are not included in the definition of "charitable" purposes". An organisation whose primary function comes within the proposed definition of "charitable purposes" will however, be able to engage in advocacy, campaigning or lobbying as an ancillary service.

The regulator will be able to establish Consultative panels with stakeholders on specific issues. There will also be an extra-judicial Charities Appeals Board, in addition to the right to appeal to the courts. Provision will also be made to protect trustees from liability when acting honestly and reasonably. It is also expected that incorporated companies that submit returns to the regulator will not also have to file returns to the Companies office and that principles of proportionality will be applied in relation to the content of annual returns submitted by smaller charities. Fundraising will also be covered by the legislation, including the implementation of agreed Codes of Practice by charities in relation to fundraising operations.

The General Scheme is now being drafted into a Bill that the Government has stated will be enacted before the next General Election. The Heads of the Bill can viewed at www.pobail.ie. The Wheel is also a valuable source of information: www.wheel.ie. You can also register with the Wheel's network of interest by emailing ivan@wheel.ie to be kept up to date with progress of the Bill.

Regulation of Fundraising by Charities through Legislation and Codes of Good Practice As part of the proposed Charities Regulation Bill 2006, provision is being made for the regulation of fundraising practice. Permits will be required for all public collections for the benefit of charities (with the exception of grounds of places of public worship). Information on fundraising activities will also be required in applications for registration with the Charities Regulator, as will information on annual accounts and returns. Codes of Good practice will also be developed in relation to practices and procedures ie. the operational and administrative aspects of charitable fundraising.

The Department of Community, Rural and Gaeltacht Affairs have engaged Irish Charities Tax Research Ltd (ICTR) to conduct a consultation process around the introduction of Codes of Good Practice. To do this, ICTR have asked Peter Cassells, independent consultant to carry out research and making recommendations on how the operational aspects of charitable fundraising can be effectively regulated. DFI encourages all organisations to consider the implications of codes of Good Practice for their organisation and to respond to the ICTR document.

For example:

• what types of fundraising should be covered?
• What rules or requirements should be included in the Codes?
• Who should set the standards?
• Should compliance be voluntary or mandatory?
• How should codes be monitored and enforced?

ICTR is seeking submissions on the initial phase of consultation by 15th December 2006. The consultation paper which they have issued for discussion is available on their website: www.ictr.ie. DFI is also seeking submissions based on the ICTR paper. Please send your comments to joanodonnell@disability-federation.ie.

The Law Reform Commission Consultation on Legal Structures for Charities

The Commission has published its Report on Charitable Trusts and Legal Structures for Charities. The main recommendation is to introduce a new legal structure for charities, called a Charitable Incorporated Organisation. They advise that the new legal structure should be incorporated in the new Charities Bill and CIOs should be subject to regulation only by the Charities Regulator. Existing charitable trusts, unincorporated associations and industrial/provident societies should be given the option of converting and that the CIO structure should be an additional option for charities that are already incorporated under company law (i.e. companies limited by guarantee). Charities that carry on trading activities that satisfy the legislative requirements for tax exemption should be allowed to avail of the proposed CIO structure. In additon, The Commission recommends that all charities, regardless of the legal structure they assume, should be subject to overview only by the proposed Charities Regulator (as regards registration, accounts, audit, annual returns and regulation). The full report is available at www.lawreform.ie

Charities Legislation - Implications for Voluntary Disability Sector

DFI has invited Ivan Cooper, director of Advocacy from The Wheel and Sheila Norden from the Irish Charities Tax research Ltd to address a meeting at DFI offices in Dublin on the implications of the new regulatory legislation on 8th February 2007. All disability voluntary organisations are invited to attend. For further information, please contact

Joan O'Donnell
Support Officer
Disability Federation of Ireland
Fumbally Court
Fumbally Lane
Dublin 8

Tel:(01) 4250122 (01) 4547978
Mobile: (086) 383 4587
Fax:(01)4547981
joanodonnell@disability-federation.ie.

To register to attend the event, please contact Mary Redmond: (01) 454 7978 or email maryredmond@disability-federation.ie.