Funding and Commissioning
There are almost 10,000 charities in Ireland and collectively they generate a turnover of €14.5b per year.
Of this, just over fifty percent comes from statutory sources in the form of grants or service-contracts (sometimes called service agreements or service-level agreements). That said, the sector fundraises over €960m per year towards the cost of its work.
The Irish community, voluntary and charity sector is very heavily funded by the state. This is because many of Ireland’s health, social and community services originated in and are delivered by autonomous, community-based nonprofit organisations. These organisations are charities and all of them are run (governed) by volunteer board members, or charity trustees. In other countries, the same services are often delivered directly by the state or its agencies. Many community and voluntary organisations now find themselves subject to commissioning approaches to allocating public funds. If the community and voluntary sector is to continue playing its key role in health, community and social services, then Government needs to ensure that future funding and commissioning models fully support the community-based, nonprofit approach.
Charities need to be able to plan from year to year, so where government is funding the work of charities through a grant or service-agreement, then funding should be allocated on a multi-annual basis so that charities can plan their work efficiently – it is very difficult to plan strategically if funding is renewed annually. Additionally, many health-service-providing charities funded by the HSE saw their grant allocations frozen in 2009 and many are now losing staff because they cannot afford to remunerate staff at a professional level. We need Government to resolve this issue and restore the funding cuts so that charities can remunerate staff adequately.
What Are We Working On?
We work to ensure that where organisations are delivering services on behalf of, or funded by the state, that:
- the funding is adequate to meet their beneficiaries’ needs
- the mode of funding – the rules, regulations and reporting requirements that organisations must comply with – are fair, reasonable and actionable
- where organisations are funded by multiple authorities, an effort is made to reduce duplication in reporting requirements
- the governance autonomy of boards and the organisation’s independence is respected by funders
- funding is planned and contracted on a multi-year basis enabling charities to plan and budget.
- That funding levels for Setion 39 (Health Service providing) organisaitons funded by the HSE are increased to enable them to sustainably remunerate staff.
Much of our work on these issues is being advanced through our engagements on shaping the various commissioning initiatives underway in many government departments and agencies.
Creating an environment that supports philanthropy and private and corporate giving is also a key priority for The Wheel. We work closely with partners to build on the work of the Forum on Philanthropy and Fundraising and the recommendations it made in its report (published in 2012).
We believe that one of the critical ways of growing philanthropy in Ireland is to equip the fundraisers of Ireland’s charities with the skills to research, identify and ask for support. An entire section of this website is devoted to providing information and advice about many types of fundraising. It also hosts Fundingpoint, Ireland’s only comprehensive source of grants for charities from all sources, and lastly, it contains a range of information on how to access funding from the EU.
Supporting organisations, and developing public policy that encourages organisations, to apply a social enterprise approach to generating funding for their work, is also an increasingly important challenge, and an opportunity, for the sector.
The Wheel works to advance supportive policy for social enterprises as a member of the Social Enterprise Task Force to shape the Department of Rural and Community Development’s emerging Strategy for Social Enterprise.
Together with colleagues on the SETF, we have published two reports on how social enterprise can be grown in Ireland.
VAT Compensation for Charities
The charity, community and voluntary sector has long campaigned for the introduction of a VAT Compensation Scheme for Charities and we in The Wheel were delighted that Government provided for such a scheme in Budget 2018. A maximum of €5m was allocated for 2018.
The VAT Compensation Scheme for Charities is intended to compensate charities for VAT they have paid on goods or services using fundraised income (not statutory income).
Our public policy work now is aimed at ensuring that the operation of this scheme is simple and that the size of the fund is sufficient to recompense charities for a significant proportion of the VAT they pay on goods and services purchased with privately donated funds.
To maximise the sector’s impact, in liaising with Government, The Wheel and Charities Institute Ireland have formed a joint working group to engage with the Department of Finance and the Revenue Commissioners on the implementation details.
Let's Commission for Communities!
In 2016, The Wheel, in collaboration with Clann Credo and the Community Foundation of Ireland, published Let's Commission for Communities, a report focused on the value of the community and voluntary approach to human, social and community services.
Let's Commission for Communities identifies the societal value that the community and voluntary approach delivers: the energy, endeavour and commitment displayed and the funds contributed. The report makes strong recommendations for the next Government about what is needed if we want to continue to benefit from a thriving community and voluntary sector.
This report was published because we believe that an apparent drift in policy towards a commissioning model focused on minimising public-spending may compromise the quality of services and threaten the viability of the community and voluntary sector itself. We believe that commissioning can be approached in a positive way that supports communities and that a priority for public policy should be to create an enabling ecosystem to sustain the community and voluntary sector in the years ahead.