Cathal Barry
Parishes can continue the work they have been doing under the new system, Úna Ní Dhubhghaill tells Cathal Barry
What is the Charities Regulatory Authority (CRA)?
The Charities Regulatory Authority (CRA) was established on October 16 2014 under the terms of the 2009 Charities Act.
It’s a brand new, inde-pendent, statutory agency set up by the Government to regulate the charities sector.
It’s an agency under the Department of Justice and Equality but is independent in its delivery of its functions. We receive our funding from the department but we operate independently in terms of how we regulate charities.
How will this new system of regulation differ to the methods regulation in the past?
Many charities are regulated in different ways depending on what they do. For example: many schools, hospitals, nursing homes – and all of these types of institutions that we are familiar with – have had charitable status for a long time and have been subject to regulation by their sector based regulators. We haven’t had a comprehensive system of regulation that’s been set up in order to regulate charities as charities and that’s the change that has been brought in now.
What has the CRA been doing?
One of the first steps that we have taken is to publish a register of Irish charities which is something we haven’t had before. What we have had is a list of charities to whom Revenue have given a tax exemption and that list has been public for a long time.
What we have done is use that list as the basis for the new register. All charities that are on that list have come on to our new register automatically.
We now plan on expanding that register so that it lists all charities.
So, for the first time in our history, all charities will have an obligation to come forward and register.
What about charities that haven’t been automatically registered?
Charities that haven’t been automatically registered need to come forward to us now and they have up until the middle of April to do so.
How do they do that?
Initially, they can go onto our website (www.charitiesregulatoryauthority.ie) and make contact with us through that and we can get them started on the registration process.
What information will be held on the register?
One of the big advantages is that this will give people access to a database of information about charities. At the moment we only really have their names, addresses and charitable purpose. However, in time this will expand to give information about their activities, about their finances, about how they fundraise, about what they spend their money on, who their trustees are, etc.
This is the type of information I think will really add to the transparency of the sector and the way it can be really accountable to everybody who makes charitable donations. This is the beginning of a quite far reaching reform that we will be working on in the months and years to come.
Are parishes and dioceses required to register?
Yes. A lot of Catholic parishes are already on the register but they may not all be there.
How should they register?
The group of Catholic Church based charities has a complex structure. One of the challenges for us, I think, is to take our own legislative framework and work out how to implement that within a sector that is as diverse as the charities sector is. One of the things we are currently discussing with the dioceses is how precisely to structure the registration of these charities.
There are a few different ways we might approach this. We’d like to try to bring a level of consistency to the registration of diocesan charities and ultimately arrive at a registration structure that makes sense, that doesn’t require endless duplication of reporting and very small groups having to meet reporting burdens that wouldn’t really be appropriate to them.
We need to balance that kind of pragmatism and efficiency with increased transparency that the new register is intended to deliver. It will take some time to achieve this and we’ll be working with the dioceses, and through them, with the parishes themselves to get there.
Which parishes/dioceses are already registered?
At the moment we have had the automatic registration of any entity that had a CHY number (a number issued to a body which has been granted charitable tax exemption). So, if a parish had its own CHY number, it has become a single charity. If it was using the CHY number of the diocese then it would be assumed to be registered under the umbrella of the diocese.
Do smaller charitable groups within parishes need to register?
It’s difficult to answer in the hypothetical whether a charitable group within a parish would have to apply for registration separately. It really depends on where the responsibility lies for how it is managed and run.
From the perspective of people who use the register, it’s important that charities are registered in such a way that information about them is available.
If a charity is fundraising or is appealing to members of the public to donate money to its cause, then the public should have access to information about that particular group, how it’s spending its money and what it is doing.
It may be that the sensible way to do that reporting is via the parish and the diocese rather than as a separate entity or it may be that in order to achieve the transparency it needs to be separate. These are the kind of issues that we are currently working through in liaison with the Diocesan Advisory Committee.
What is expected of charities that register?
The Charities Act is framed in such a way that recognises that this is a very diverse sector with a lot of different structures so it isn’t prescriptive about structure. Instead it emphasises trusteeship.
If a charity wishes to register as a single entity with us, what needs to be clear is that there is a group of trustees or directors who are responsible for that charity. The Charities Act approaches the regulation of charities very much from the perspective of the duties of trustee who are ultimately the people with whom the buck stops when it comes to running the charity.
If you have a small group that is registering as part of a larger entity, provided the trustees of the larger entity are happy that they can report on behalf of that small group, that they can be accountable for what goes on in that small group and that they have sufficient information and an appropriate governance relationship with that small group, then we wouldn’t have an issue with it.
Where that doesn’t exist, where the structures are looser, then it might be more appropriate to look at separate registration.
What do dioceses/parishes/groups who aren’t registered need to do now?
In general, any charity that hasn’t been automatically registered by virtue of its tax status needs to come forward to register with us.
Because we’re working with the dioceses on the overall approach to the registration of Catholic charities, we’re asking anyone who’s not sure whether their group needs to apply to us to first seek the advice of the Diocesan Advisory Committee, who will be able to guide them as to how they fit into the overall approach being taken.
This is important as not every group will necessarily need to come forward and have their own registration but they will need to be represented on our register, whether it’s via the diocese or independently themselves as parishes or through a collective parish registration.
They need to ensure, in some way, when interested people go to look them up in the register, that the information is available to them.
In addition to registering, do dioceses/parishes have to provide any information?
At this stage we are gathering information on charities that were automatically registered with us and we are writing out to all of them inviting them to engage with our online register and create an online account that enables them to update their details.
From our engagement at the diocesan level, I know that there is an amount of restructuring happening within the way that these charities are going to register with us.
So at the moment it’s my understanding that individual parishes will be working though the dioceses to provide us with that information, rather than providing it directly to us at the parish level.
What information will parishes/dioceses ultimately be required to provide?
If the model of having diocesan registration and then collective parish registration is the model that is settled on for this sector, then we would hope to see under that collective parish registration, on the register of charities, all the addresses of all the different parishes and a description of the types of activities that are being undertaken with the aim of advancing the charitable purpose.
We will also see the names of the trustees and some financial information. The aim here is to provide information about the types of things people want to know about charities: what are they doing? Who is getting the benefit? Where is the money coming from? And how it is being spent?
Are the CRA doing anything to assist parishes/dioceses in the process?
We have an informal liaison group with the Diocesan Advisory Committee of the Irish Episcopal Conference. The reason we have got together is to work through with that committee the issues that are arising now from the registration of charities and that may arise in the future in terms of the reporting regimes that we will be putting into place.
Once a charity is registered with us, certain other obligations then fall on that charity. These include annual reporting obligations.
The Charities Act requires all registered charities to make annual reports through to us as the regulatory agency. This is a comprehensive requirement and it is mandatory within the Charities Act. The precise content and format of these reports has yet to be determined in detail. This will be a particular focus of our work in the CRA in the first half of 2015.
When will reporting begin?
The reporting requirement will kick in towards the end 2015. We will be working to ensure that all charities, including parishes, know what is required of them, when the time comes for them to make their first report.
What purpose do the reports serve?
There are a number of reasons why this reporting requirement is being introduced. We in the CRA need up to date information about the charities we regulate in order to be able to carry out our own duties as a regulator.
We also have a requirement within legislation to make these reports public and the reason for this is to bring about a step change in the transparency of the charities sector. The reports will also serve as an opportunity for charities to communicate with their stakeholders and donors about the work they’re doing and the benefit it creates.
What will the benefit be to the public?
Once the reporting cycle is in place, if somebody is considering donating to a charity, to some sort of a fund, be it a parish or anything else, they will have access on our website to a report that tells them what that charity has been doing in the previous 12 months and how it’s been spending the money that it’s raised from the public. That will be a very positive change.
How will the CRA be policing the requirements laid down in the Charities Act?
We will be approaching this in a measured fashion, because it is new. It’s a real opportunity to bring increased transparency and good management practices to the sector, so it’s important that we get it right and avoid confusion.
We want to give charities time to make any necessary changes to their practices in order to meet regulatory requirements.
That means initially we will accept reports and accounts that may not meet the standards that ultimately will be set in regulations.
We will take a non-prescriptive approach at first and work towards a point of compliance. We are aware that some of the very first tranche of reports may not be absolutely compliant. It’s important to keep in mind that this is a gradual process and it is going to take time.
Ultimately, we are aiming to reach a point where we have a high level of consistency. It will take us time. Nonetheless, we are committed to getting there.
Will these requirements change what it means to be a charity?
There is no reason why parishes can’t continue to carry out the work they have been doing for years under the new system.
There has been no legislative change made to what it means to be a charity or to how that might manifest itself in terms of what you do.
One of the things the Charities Act doesn’t do is change what it means to be a charity in Ireland. It brings in a new system of regulation and standards but doesn’t change what is understood in terms of charitable purpose, of which obviously advancement of religion continues to be one.
How have parishes/dioceses responded to the changes?
The implementation of the requirements in the Charity Act around accounting and reporting is intended to support good practice in these areas.
I am always encouraged when I engage with stakeholder groups, including the Catholic charity groups, that there is a high level of awareness about the Charities Act itself and the increasing importance of good governance, good management practice and being seen to make whatever changes are necessary to ensure those governance structures and practices are in place.
It’s an unstoppable trend across the charities sector and we welcome it from our perspective. I would encourage that to keep going.
Do you have any advice for parishes and dioceses?
Keep an eye on developments and become familiar with our website which will be our main method of communication.
While it will be sometime before we have the detailed requirements put in place, it’s clear that there will be reporting and accounting requirements that, for a majority of unincorporated charities, are likely to require some additional reporting over and above what they are doing now, or at least may have to be provided in a different way.
Finally, what can parishes do if they have any queries?
They can certainly come to us at www.charitiesregulatoryauthority.ie, but they can also avail of assistance and information from the Diocesan Advisory Committee as well Paul Corcoran QFA, Finance Manager, Council for Finance and General Purposes, Irish Episcopal Conference – Phone: (01) 5053023 – E Mail: paul.corcoran@iecon.ie
Úna Ní Dhubhghaill was appointed Chief Executive Designate of the Charities Regulatory Authority on March 1, 2014 and became its first Chief Executive when it was formally established in October 2014 under the 2009 Charities Act. Prior to her appointment, Úna was Head of the Charities Regulation Policy Unit at the Department of Justice and Equality.
