Questions Raised About Irish Charity Accountability

Since it was revealed last month that Icross Ireland - an organisation fronted by Mike Meegan - had been forced to hand back €97,000 of government funds intended for projects in Africa due to concerns about financial impropriety, his persona as a heroic charity worker has crumbled.

The theatrical artifice he created for Bryant and other wealthy donors has been revealed as a charade. Allegations of sexual assault, coupled with evidence of mismanagement of taxpayers’ and donors’ funds, have forced Icross Ireland to cease all operations and dissociate itself from Meegan. Last week he failed in a court bid to prevent a newspaper from reporting further allegations of sexual assault, all of which he denies.

Meegan worked in Kenya for more than 20 years, funded by generous donations from the Irish government, wealthy donors and the business community. But while his halo never slipped during that time, the board of directors at Icross Ireland were in receipt of at least one serious allegation of sexual abuse, which he denies, from 1986. Although other allegations of a sexual nature followed in subsequent years, nobody shouted “stop”.

In 2006, Brion Ó Loinsigh, a volunteer who had worked in Kenya with Meegan, told Irish Aid, the body responsible for distributing government funds to charities, that he believed the charity boss was using Icross funds for personal expenses, and that money and medicine from Ireland was not reaching its intended recipients.

Disappointed at Irish Aid’s reaction to his whistle-blowing, Ó Loinsigh approached this newspaper, which published his story. Some months later a team from Irish Aid visited Kenya and discovered that many of the young charity worker’s claims rang true. Almost €100,000 of government funds was unaccounted for and auditors were told it was not possible to see some of the charity’s accounts.

Irish Aid instructed Icross Ireland to investigate the findings of the audit, including evidence of “fraud issues” relating to training expenditure, and also requested that €97,000 be returned.

But while Icross Ireland and Irish Aid both knew of serious allegations of financial mismanagement by 2007, many of the charity’s donors remained unaware of the concerns. Three years ago the charity received €419,045 in personal donations. NCB Stockbrokers gave it €65,000 and Anglo Irish Bank €5,000. There were many small donations too, such as the Lions Club in Dun Laoghaire which gave €500.

Last week other charities working in the developing world insisted that Meegan is an aberration in a sector with an exemplary record of good governance. But do we really know what is going on beyond the carefully posed, emotive images of needy victims presented to us when a charity wants cash? And how transparent are Ireland’s charitable bodies?

At the inaugural charity ball of the ISPCC and Dublin Rape Crisis Centre at the Ritz Carlton hotel in Co Wicklow in October 2007, Tom Jones serenaded diners such as Neil Jordan, the film director, Paul McGuinness, U2’s manager, and Sharon Corr, a member of the eponymous pop group. Hosted by Caroline Downey, the wife of MCD promoter Denis Desmond, the ball was the first in Ireland to raise €1m.

More than two years later the din of rattling jewellery that once resounded around Dublin’s ballrooms has become a thing of the past. There is no longer a “chugger” on every street corner, as there was in 2007, and charity donations are falling. Fundraising Ireland, an umbrella group for charitable organisations, recently recorded a drop in the proportion of Irish people donating, down from 83% in March 2008 to 75% in November 2009. The sharpest decrease was among those aged between 16 and 24, down to 59% from 78%.

So with less to go around, which of the almost 7,500 charities in Ireland — 70% of whom received less than €40,000 per annum in donations — most deserve our backing?

A Charities Bill that allows for the creation of a regulator was enacted in February 2009. But more than a year later, the legislation is lying idle. Few small charity organisations publish annual accounts, as they are not registered companies. Revenue, which is responsible for granting organisations charitable tax status, can carry out audits for taxation purposes, but these are not made public.

Ivan Cooper of The Wheel, a representative group for 850 Irish charities, believes the “vast majority” are well run but admits the legislation will introduce accountablity to the sector.

“Every charity will have to publish an annual statement of activity that will be available on a website. Those with an income of more than €10,000 will have to publish detailed accounts,” he said. The website must also list each charity’s trustees, the custodians of its donors’ money.

“The legislation is in the charity sector’s interest. The most important asset a charity has is its good name,” Cooper said.

So what’s holding it up? Part of the legislation, banning the sale of pre-signed Mass cards that have not been authorised by a bishop or the provincial of an order, is before the courts. Although a recent High Court challenge failed, it’s likely to be appealed to the Supreme Court, according to a spokesman for the Department of Community, Equality and Gaeltacht Affairs.

The legislation, which also outlaws fake “charity” clothing collections, is not likely to come into full effect for several years. The department points out that in other countries, notably Scotland, “it has taken a number of years after enactment of the legislation for the new regulatory system for charities to be formally introduced and this will be the case in Ireland also”.

In the meantime, the number of unregulated charities grows. In 2009, the Revenue granted 397 new tax exemptions to charitable bodies, delisting 215. While some lose their tax status because they “fail to comply with conditions”, such as the House of Prayer, a religious retreat in Co Mayo, this is rarely publicised.

John Mulligan, founder of Focus on Romania, a charity that reforms staterun orphanages and mental health institutions, feels that a prevailing culture of privacy in the charity sector may stymie the spirit of the new legislation. “What is really needed is a whistle-blowers’ charter,” he said. “The reality is that if some-one rocks the boat, say a senior charity worker, they endanger their livelihood and their allegation may not even be followed up.”

Sheila Nordon of the Irish Charities Tax Reform Group (ICTRG) is involved in creating a code of practice for the sector. She envisages an independent commission overseeing this voluntary code where complaints could be channelled through a monitoring group to the regulator. “The idea is that instead of self-regulation, we will have a form of co-regulation,” she said.

BEST international practice in terms of regulation is the least we should expect as a nation of famed charity givers. After all, don’t we do philanthropy, with our history of missionaries and church-gate collections, better than other nations? Didn’t we give more per capita to Live Aid in 1985 than any other country?

Jackie Harrison of Philanthropy Ireland points out that we give less — in terms of quantity — than many of our European neighbours. The Swiss, Swedes and even British are more generous. The Celtic Tiger made us even meaner, with the share of disposable wealth we donate falling from 0.94% to 0.79% in 2005.

We are also haphazard donors. Giving in a planned way, rather than dropping a few coins in a box, is one safeguard to being “ripped off” but only 12% donate regularly through a direct debit or some other arrangement, Harrison said.

Even the state — which provides the non-profit sector with 60% of its funding — is cutting back, with more than €250m slashed from this year’s overseas aid budget. On top of that, charities return about €25m to the state annually in Vat payments, even though other countries, such as Denmark, return Vat sums to non-profit organisations.

At least we can rest assured that rigorous audits are carried out by Irish Aid, when public money is being spent, as in the case of Icross when it was investigated in 2007. Or can we?

Mulligan said he once approached the state body with evidence of wrongdoing at another charitable organisation. “I was stonewalled,” he said. “Their attitude is straight out of Yes Minister. It’s cover our own backs at all costs,” he said.

While Irish Aid, which will distribute about €670m in overseas aid this year, insists it takes all allegations of corruption seriously, and stresses the rigour of its evaluation controls, its audits are not made public. This contrasts with the way school inspection reports have to be published by the Department of Education or nursing home reports have to be published by the Department of Health.

In the past Irish Aid has refused requests under the Freedom of Information Act for access to audit reports due to “commercial confidentiality” or because it might “breach a confidence” with a non-governmental organisation. In 2007, it refused a request by The Sunday Times for an audit of Icross, arguing that releasing the information would “prejudice its ability to conduct effective audits and inquiries [in the future]”. The audit was eventually released three years later, prompting the immediate winding up of Icross Ireland. But few donors wondering whether to give, or which charity to give to, can afford to spend this level of time and effort on research.

Cynicism arising from the scale of corruption in the developing world is often said to discourage donors from giving money to the charities that help the world’s poorest. The scale of corruption in the Irish charity sector, however, is anybody’s guess. Caveat donor.

 

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