The Wheel's position on the recent negative publicity about charities

Issued by The Wheel, 2 December 2013:

The controversy over the ‘salary top up’ from charitable funds for the CEO of the Central Remedial Clinic, has created an opportunity for a mature and reasoned debate on the reality of running charities in today’s world.

Before the public comes to any conclusions as to whether charities can be trusted, they should consider the bigger picture. It would be a terrible consequence for the thousands of people and communities served by the vast majority of well-run charities, if the justifiable shock and anger caused by these recent revelations were to affect the fundraising, or the reputation of charities in general. These organisations are reliant on public generosity and support, and the issue currently in the spotlight has no bearing on the overwhelming majority of charities.

Ireland’s 8,400 charities provide a vast range of public services in communities across the country. Just over half of the funds spent by these organisations come from the exchequer, with the rest sourced from the public, companies and philanthropic foundations.

All charities are run by volunteers who serve as board or committee members, and about half of all Irish charities have no paid employees at all. However, as is the case the world over, when their work requires it, charities employ paid staff to deliver, oversee and manage effective financial management and service delivery. Of those charitable organisations that employ paid staff, 37% have five paid staff or fewer; 41% have between six and 50 paid staff; and only 0.25% employ over 100 people. 

It is also important to note that the recent revelations about top-up payments for senior executives and the associated issue of the levels of those salaries, relate to a very small number of voluntary healthcare-providers that are in effect supplying outsourced public services. It simply cannot be inferred that these practices are common in a sector where the only comprehensive salary survey of the sector shows that the average remuneration for CEOs and managers in charities is €59,000 a year (with no bonuses or ‘top ups’) and that most charity CEOs earn less than €72,000 a year.  

All funds raised by a charity, regardless of the source, pass into the custodianship (not the ownership) of the organisation’s trustees (usually referred to as board or committee members). These funds must therefore be treated the same as any public funds under the control of a public entity, that is with unqualified transparency. For organisations with a charity number, there can never be different standards of transparency for funds, regardless of the source of those funds. The entire organisation benefits from the charitable status, therefore the highest standards of transparency must apply to the reporting of all income and all expenditures of that organisation. 

"In light of the current revelations, all charitable organisations should re-double their commitment to transparency..."

When setting salary levels, charities must use a clear process that into account the demands of the job and comparable salaries. They should also be completely transparent about the salaries of senior executives.

Moreover, charities in receipt of state funding must obviously comply with all the terms of all funding agreements they enter into, including any terms related to the remuneration of staff and senior executives.

It is important to reassure the public that, although we regretfully do not yet have a Charity Regulator in Ireland, it does not mean that the sector is unregulated, or that it can – in any way be compared to ‘the wild west’ as some commentators have argued. There are many different regulators and offices which oversee different aspects of the work of charities, for example, the Revenue Commissioners, the Office of the Director of Corporate Enforcement, the Health Information and Quality Authority (HIQA). The announcement this year by Minister Shatter that the Charity Regulator will finally be established in 2014 is very welcome as the final piece in the regulatory framework. The Charity Regulator’s presence will provide - by default - the necessary transparency to show and to reassure the public that Ireland’s charities are, in the vast majority of cases, run to the highest possible standards.

Until then, and in light of the current revelations, all charitable organisations should re-double their commitment to transparency by committing to adopt the Governance Code for Community, Voluntary and Charitable Organisations – a code of good practice that holds organisations to the highest international standards of best practice. In parallel, all charities should publish detailed accounts on their websites - or other places accessible to the public- including explanatory notes on how and where the funds were sourced and spent, and the impact and outcomes of their work. All organisations should also respond promptly to legitimate requests for information on salary levels and sources of funding. 

On behalf of an organisation which has almost 1,000 charitable organisations as members, I urge the public not to jump to conclusions regarding the charity-sector in general. The work that these organisations do in homes and communities across Ireland is far too important to be hi-jacked by a scandal, which should never have happened. Let us not compound the problem by allowing it impact negatively on the vital link of trust that has traditionally existed between the public and charitable organisations in Ireland.

- Deirdre Garvey 
Chief Executive Officer, The Wheel