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Charities Regulatory Authority Established


Background

 

The Charities Act 2009 (“Act”) was enacted in February 2009 and commenced on 1 September 2009 (by S.I. 284/2009). The purpose of the Act was to: provide for a regulator of the charitable sector; provide greater accountability by charities; protect against fraud; to increase transparency in the sector; and generally therefore to enhance public trust and confidence in charities. However, between 2009 and October 2014, only sections 1 (Short Title and Commencement); 2 (Interpretation); 4 (Orders and regulations); (5 (Expenses); 10 (Offences (other than subsections (3) and (4)); 90 (Power of court to grant relief from liability for breach of trust); and 99 (Sale of Mass Cards) were commenced. The reluctance on the part of the Government (past and present) to enact the substantive provisions of the Act attracted criticism from within and without the charities.

 

In early 2013 the Minister for Justice, Equality and Law Reform published a Consultation Paper on the Implementation of the Charities Act 2009 which addressed three key areas: (1) the Charities Regulatory Authority; (2) the Register of Charities; and (3) Financial and Activity Reporting by Registered Charities to the Charities Regulatory Authority.

 

Establishment of the Charities Regulatory Authority

 

Arising from the 2013 consultation, the Charities Regulatory Authority was established (by way of S.I. 456/2014 and S.I. 457/2014) on 14 October 2014. As a result of the statutory instruments signed by the Minister for Justice on that date, all of the Act is now in force save for Part 4 (Protection of Charitable Organisations) and Part 7 (Miscellaneous). By commencing Part 2 of the Act, the Charities Regulatory Authority (“Authority”)          has now been established. Pursuant to the section 14 of the Act, the functions of the Authority are as follows:

 

(a)  increase public trust and confidence in the management and administration of charitable trusts and charitable organisations;

(b)  promote compliance by charity trustees with their duties in the control and management of charitable trusts and charitable organisations;

(c)  promote the effective use of the property of charitable trusts or charitable organisations;

(d)  ensure the accountability of charitable organisations to donors and beneficiaries of charitable gifts, and the public;

(e)  promote understanding of the requirement that charitable purposes confer a public benefit;

(f)   establish and maintain a register of charitable organisations;

(g)  ensure and monitor compliance by charitable organisations with the Act;

(h)  carry out investigations in accordance with the Act;

(i)    encourage and facilitate the better administration and management of charitable organisations by the provision of information or advice, including in particular by way of issuing (or, as it considers appropriate, approving) guidelines, codes of conduct, and model constitutional documents;

(j)    carry on such activities or publish such information (including statistical information) concerning charitable organisations and charitable trusts as it considers appropriate;

(k)  provide information (including statistical information) or advice, or make proposals, to the Minister on matters relating to the functions of the Authority.

 

The Register of Charities

 

The Authority, pursuant to section 39 of the Act, must establish and maintain a register of charitable organisations. Initially, the Register will contain the names and addresses (and in some cases the charitable purposes) of charities that were automatically registered with the Authority because they were already recognised as charities for taxation purposes by the Revenue Commissioners. This information was supplied by the Revenue Commissioners to the Authority pursuant to section 40 of the Act. The Authority will, in the immediate term, be seeking further information from these charities to ensure a complete entry is recorded in the Register.

 

Financial and Activity Reporting by Charities to the Charities Regulatory Authority

 

Sections 47 to 54 of the Act deal with the type of information that registered charities will be required to supply each year to the Authority about their finances and activities. There are exemptions for certain categories of charities from the obligation to supply accounts to the Authority: those that are a registered company as CRO will provide the annual accounts to the Authority under the Act; those that are an education body; those with an income or expenditure below a threshold amount; or a centre for education within meaning of section 10(4) of the Education Act 1998. All other registered charities will supply annual accounts to the Authority. The Minister may make regulations on the type of information that must be contained in these accounts. The Authority will make the financial reports it receives from charities available to the public.

 

Under section 52 of the Act all registered charities will be required to send to the Authority an annual activity report and the Minister may specify the form and content of that reports by way of regulations. The report will be due not later than ten months after the end of the financial year to which it relates.

 

Conclusion

 

The commencement of the majority of the provisions of the Act represents an important development in the regulation of charities in Ireland. Eames Solicitors have a strong track record in advising charities and look forward to advising existing and future clients in this sector in relation to compliance with the new regulatory regime as it evolves.

 

For more information in relation to this area please contact Adrian Smyth at a.smyth@eames.ie