Sustainable Funding

Disparity in pay and conditions for organisations delivering public services on behalf of the State has been a significant issue for many of our members in recent years and has received notable public attention. Many charitiessuffered a sharp decline in public funding after the financial crisis in 2008, as part of cuts affecting pay and staffing for all public services. While the 2017 Public Service Pay and Pensions Act and the Public Service Agreement Building Momentum deal reversed cuts for public- sector employees, sector pay was never restored.

In June 2023, The Wheel published a report calling for immediate State funding to address the two-tier system of pay for organisations delivering public services on behalf of the State. The report examined staffing, demand for services, and funding among hundreds of Section 39, 10, 56, and 40 organisations that receive contracts from the State to deliver essential public services countrywide in diverse areas like health, disability, family support, children, care of older people, homelessness, and addiction.

It found that staff were not legally entitled to the same pay as public sector employees delivering often- identical services, meaning that in some cases pay increases of up to 15% are required to tackle negative disparity compared to staff doing similar work in state agencies.

Beginning in 2024, The Wheel brought together several organisations impacted by this issue spanning the sector to launch a campaign. A series of Workplace Relations Commission negotiations followed and resulted in pay agreements for a range of organisations providing services on behalf of the State. This was a significant step following many years of
campaigning on the issue.

In March 2025, the State agreed on a 9.25% pay increase for up to 40,000 workers across
health, social care, homelessness, and domestic and gender-based violence organisations. This was based on the 2024–2026 public sector pay agreement. This includes an automatic link to match all future public pay agreements.  While these agreements are an important positive step towards sustainable funding for the community and voluntary sector organisations providing vital services, the process has proved complex and protracted for many, with a lack of clarity on how payments should be applied.  Additionally, the agreements do not extend to all organisations that provide services.

Moving forward, it is vital that

• pay increases are managed and awarded in a clear and timely way.

• Pay increases are extended to additional organisations providing services on behalf of the State in areas such as drug and alcohol support.

While addressing pay issues in the sector is an important step, many non-pay-related issues are still having a significant impact on the sector. These include pension auto-enrolment, rising costs around insurance premiums and energy, as well as the cost of living, and rising rents. Furthermore, most State funding agreements do not contain built-in mechanisms for inflation. Combined with the costs detailed above, organisations are struggling to cover the rising costs of providing services. We welcome the upcoming data collection process being undertaken by the HSE to understand the extent of non-pay costs across the sector.

To achieve truly effective public-service provision that reflects need and best practice, the State should

• provide funding on a full-cost-recovery basis, considering the need for organisations to fund core costs, pay staff adequately, train and develop staff, and make provision for pension contributions where appropriate.
• apply these changes across government departments and agencies, such as education, health, social care, and rural affairs, would help avoid complexity for organisations with multiple funding streams and Service Level Agreements.

Despite many positive reforms in areas such as judicial guidelines, occupiers’ liability, and the work of the Injuries Resolution Board, the cost of insurance continues to rise for many organisations across the sector. This is having a significant impact on their ability to provide services. Our members have highlighted the need for continued Government action on insurance costs as a priority and The Wheel is working through the Alliance for Insurance Reform to address this persistent issue.

The Action Plan for Insurance Reform was published in July 2025 with a focus on encouraging further competition in the market and working with stakeholders
to enhance transparency and affordability across all types of insurance.  However, in December 2025, the Central Bank published the most recent Report of the National Claims information Database , which shows that legal fees now effectively match compensation awards in the majority of cases.

The report also showed a 10% profit margin (€137m) on liability insurance in 2024, but a 23% increase in premiums since 2020. So while profits in the insurance liability market continue to grow, savings are not being passed on to the consumer.  The community and voluntary sector urgently needs insurance reforms that will quickly reduce liability premiums to affordable levels and keep them there, enabling service providers, charities and social enterprises to carry out their work. It is vital that

• Government take action to ensure far greater numbers are settled at the Injuries Resolution Board (IRB).
• Government ensure effective implementation of the Action Plan for Insurance Reform to ensure increased competitiveness and reduced premiums for consumers.

Additionally, The Wheel has long advocated for the introduction of multiannual funding as the default approach for community and voluntary organisations, which would facilitate longer-term planning, better staff recruitment and retention rates and improved outcomes for service users.

According to our most recent survey , less than 30% of respondents received multiannual statutory funding, with three quarters having their funding assessed
every two to three years. We know that multiannual arrangements existsfor some service providers with some departments, but the approach is inconsistent.

To achieve fully integrated services, Government should

• apply multiannual funding approaches to sector organisations, with an appropriate average funding cycle of three to five years.

Government policies are essential to support Ireland’s National Philanthropy Policy 2024–2028 , ensuring a robust framework that encourages charitable giving and investment in social causes. By providing tax incentives, regulatory clarity, and fostering a culture of philanthropy, Government can help unlock private wealth for public good.

These policies would strengthen partnerships between the public, private, and non-profit sectors, enabling more impactful and sustainable funding for social initiatives, innovation, and community development. This strategic support is crucial for scaling philanthropic efforts and addressing Ireland’s most pressing social challenges.  The Wheel sits on the
National Philanthropy Policy 2024–2028 steering group, which will host several events in 2026 to explore philanthropy in Ireland.

Government introduced the VAT Compensation Scheme in 2018 to address an anomaly in EU law that uniquely prevents charities reclaiming VAT on essential expenditure. Capped at €10 million since Budget 2024, the annual fund rebates only approximately one quarter of total charity VAT expenditure.

For several years we have advocated for a graduated increase in the fund to eventually provide a full rebate of the estimated €40 million VAT paid annually by charities, in the interests of tax equity and to promote independent fundraising. We recommend that

• The Fund should be increased to €15 million