CHARITIES ACT 2009
With the exception of Part 4 (Protection of Charitable Organisations) and Part 7 (Miscellaneous Provisions), the majority of the Charities Act 2009 (the "Act") was commenced with effect from 16 October 2014 and has introduced some key changes to the sector.
At the ICTR Annual Conference, held on 6 November, Úna Ní Dhubhghaill, CEO of the CRA, spoke of the timely impact the Act will have for charities registered in Ireland, ensuring greater accountability and protecting against abuses of charitable status and fraud. The Act is also expected to enhance public trust and confidence in charities and to increase transparency by providing an open online record which each charity will be actively encouraged to update and amend as and when required.
Charities Regulatory Authority
On 16 October 2014, the Charities Regulatory Authority ("CRA") was established by Ministerial Order. Its purpose is to maintain a Register of Charities (the "Register"), to seek and keep annual reports from registered charities, to provide charity services and to investigate complaints about charities. As this investigative power under Part 4 of the Act has not yet been commenced, the CRA is not currently empowered or resourced to conduct statutory investigations of charities, but it is hoped that Part 4 will come into force in the first half of 2015. In the meantime, the CRA will attempt to follow up on complaints received about charities where this is appropriate and within the powers and resources currently available. Complaints will be considered where there is the potential for serious abuse of a charity, its assets, or its beneficiaries.
The Register will be developed further in the coming months. Currently, the majority of its entries are based on information supplied to the CRA by the Revenue Commissioners.
- CHY Charities
The Register is established pursuant to s.39 of the Act. All CHY charities in existence prior to 16 October 2014 (estimated at 8,500) are automatically registered charities within the meaning of the Act. At this stage, the Register contains the CHY charities' names and addresses (and in some cases the charitable purposes). The CRA are currently sending out letters asking that CHY charities supply the additional information needed for a complete entry in the Register. They hope to have the last of these letters sent out by January 2015. It is hoped following this that each charity in the database will have updated its account so that details with regard to the following are available to view online: other names, charitable purpose, charitable objects, activities, beneficiaries, details of trustees, officers or directors, financial information including most recent accounts, governing documents and a trustee declaration.
- Non-CHY Charities
All other charities (non-CHY charities) will be required to make an application to be included in the register, the deadline for which is 15 April 2015. The process for registration of non- CHY charities is now open and must be done through the CRA website, www.charitiesregulatoryauthority.ie. However, the CRA are not yet accepting applications for registration from non-CHY charities that are educational bodies within the meaning of the Charities Act.
S.52 of the Charities Act requires all registered charities to make an annual activity report to the CRA within 10 months of the end of the financial year to which it relates. The first reports and accounts for CHY charities with 31 December year ends will need to be submitted to the CRA by 31 October 2015. Despite the absence of regulations as to the form and content of these annual reports and accounts, charities will be required to comply with s.52. There is an expectation that regulations will be issued prior to 15 August 2015 – the earliest date by which a charity will be required to report. In the meantime, the CRA will be asking any charities whose reports fall due under s.52 to report through their online charity accounts by submitting:
- a short online information return according to a template that will be published in advance of the first annual return dates;
- a copy of the charity's annual report; and
- a copy of the charity's annual statement of accounts (unless the charity has a financial reporting exemption under the Charities Act).
- If the charity's gross income in the financial year to which the statement of accounts relates is less than €100,000, there is the option of submitting an income and expenditure report and statement of assets and liabilities instead of an annual statement of accounts.
- If the charity's gross income in the financial year to which the accounts relates is equal to or greater than €100,000, accounts should be audited and a copy of the auditor's report should also be supplied.
- If a charity is a company limited by guarantee, it is required to have its accounts audited regardless of its size.
This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.