The Consultative Panel on Charitable Fundraising (Panel) was established in 2016 by the Charities Regulatory Authority (Authority). The Panel was asked to consider the practice of fundraising from the public by charitable organisations. It was also mandated to make recommendations on how best to regulate fundraising into the future. Niamh Callaghan, a partner in our Charities & Not-for-Profit team, was a member of the Panel. A copy of the Panel's report is available here.
One of the Panel's recommendations made in the report was that the Authority should issue guidelines for charities that fundraise. There already exists a Statement of Guiding Principles for Fundraising that was issued by (then) ICTR in 2008. The new Guidelines for Charitable Organisations on Fundraising from the Public (Guidelines) were published following the release of the Panel's report. While they derived from the 2008 Guiding Principles, they have been issued by the Authority in line with its functions under the Charities Act 2009. A copy of the Guidelines can be accessed here.
The Guidelines apply to all types of fundraising by charities from the public. Charity trustees should ensure that all key people within their organisation who are involved in fundraising implement the practices prescribed by the Guidelines. When considered in conjunction with the Fundraising Codes, published by Charities Institute Ireland and available on that website, charity trustees now have access to a wealth of up-to-date guidance in relation to fundraising.
"Must" and "Should"
Various statements in the Guidelines commence with either the word "should" or "must". The Guidelines note as follows:
- "must" means that something is a legal or regulatory requirement or a duty that trustees must comply with
- "should" means that something is good practice and the Charities Regulator expects trustees to follow and implement it within their charity
You "must" read the Guidelines in full. However, here is a summary of some of the "musts" and "shoulds":
- A charity must not enter into any agreement which is intended to deliver more private benefit to third party fundraisers than it does to the charity.
- Any information obtained in confidence as part of the fundraising process must not be disclosed without express, informed prior consent of the donor.
- It must be made clear at all times whether fundraising activities are for the charity in general or for a special purpose.
- Charities must ensure that fundraising materials do not imply that money fundraised is for a restricted purpose when it may be used for different purposes or for general funds.
- A charity must follow appropriate procedures when handling and processing personal data from individuals.
- Fundraising by third party agents should be the subject of a written contract.
- Charity trustees should ensure that their charity has a Donor's Charter, which should be publicly available and should include the commitments of respect, honesty and integrity, transparency and accountability.
- The charity's Donor's Charter should be communicated to all fundraisers, whether voluntary, paid or third party agents.
- A donation given by someone who lacked capacity at the time of donating should be returned.
- Trustees should ensure that the charity has a policy for any activities involving volunteers, including how they are contracted and managed.
- Trustees should ensure that the charity has clear, transparent procedures in place to enable interested parties to notify the charity of their complaints, questions or comments.
- If an individual is not satisfied with the manner in which their complaint is handled by the charity concerned, they should be advised of their right to raise a concern with the Authority.
The Guidelines state that fundraising should be underpinned by three core principles:
- Respect: Fundraisers should respect the rights and dignity of donors, beneficiaries and the public.
- Honesty and integrity: Fundraisers should act with integrity. Representations regarding the charity, its need for funds and the application of those funds should be honest.
- Transparency and accountability: Charities should operate in an open manner. They should be capable of explaining and justifying their actions.
Charities are exempt from VAT under Irish and EU VAT law. They do not charge VAT on their services and cannot recover VAT incurred on goods and services that they purchase. Various interested groups and individuals have made representations to Government over the past number of years seeking to reduce the VAT burden on charities.
In his Budget 2018 speech, Minister Pascal Donohoe announced a VAT Compensation Refund Scheme. The scheme will take effect from 1 January 2018 but will be paid one year in arrears. For example, in 2019, charities will be able to reclaim some element of the VAT costs which arose during the preceding year in 2018. VAT refunds will be calculated on the level of non-public funding. A total of €5 million will be available in 2019 for the purposes of reimbursing Irish charities that have submitted VAT refund claims. If the collective value of claims exceeds that amount, charities will be paid on a pro-rata basis. Claims below €500 will not qualify.
Qualifying charities must be registered with the Authority, have tax clearance, and provide a set of audited accounts for the year in which the claim is being submitted.
2016 annual report deadline
If your charity is registered with the Authority and has a year-end of 31 December 2016, an important deadline is approaching. Your charity is required to file an annual report with the Authority within 10 months of your financial year end. Therefore, for those charities with a financial year end of 31 December, the submission deadline of 31 October is approaching.
In its annual report, a charity must provide two categories of information, namely:
- information relating to its activities
- information relating to its financial position
If a charity is not also a company, it must submit a copy of its financial statements.
The annual report is filed online on the Authority's website. The annual report is in the form of an online questionnaire. You should submit the form when you are satisfied that all questions have been correctly answered and all the necessary documents are attached.
Our Charities & Not-for-Profit team would be happy to help with gathering this information and making the filing for your charity, should you need our assistance.
Third set of guidelines
The Guidelines detailed above are the third set of guidelines issued by the Authority. All charity trustees should also be aware of the previous guidelines. They are:
- guidelines in relation to financial accountability and controls
- guidelines regarding the duties of charity trustees
Both of these guidelines can also be found on the Authority's website.
Second Consultative Panel
The Authority has established a second Consultative Panel that is currently working with and advising the Authority on governance of charities. We will keep you up to date with the recommendations of that Panel, and the practical impact for charities, when they are published.
In August the Charities (Transfer of Departmental Administration and Ministerial Functions) Order 2017 moved the functions of the Minister for Justice and Equality under the Charities Act 2009, the Street and House to House Collections Act 1962 (and other) to the Minister for Rural and Community Development. Therefore, Minister Michael Ring together with CEO of the Authority, John Farrelly, launched the Report and Guidelines last week. We look forward to working with Minister Ring and the Department of Rural and Community Development.
There is a lot happening in the charity space and a lot for charity trustees to be aware of. We will keep you up to date with all future developments.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.