Charities Bill 2007: Second Stage.

Wednesday, 26 November 2008

Seanad Eireann Debate
Vol. 192 No. 8

First Page Previous Page Page of 9 Next Page Last Page

Question proposed: “That the Bill be now read a Second Time.”

Minister of State at the Department of Community, Rural and Gaeltacht Affairs (Deputy John Curran): Information on John Curran  Zoom on John Curran  I am pleased to introduce the Charities Bill 2007 to the House. Throughout the [424]progression of the Bill through the Dáil there was a broad acceptance from all speakers that it was necessary and welcome. There was a healthy and constructive debate on all Stages, which resulted in the enhanced Bill that is presented to the Seanad today.

Senator Jerry Buttimer: Information on Jerry Buttimer  Zoom on Jerry Buttimer  On a point of order, may I have a copy of the Minister’s speech?

Deputy John Curran: Information on John Curran  Zoom on John Curran  The absence of a proper regulatory framework for the charities sector has been a matter of concern to this and previous Governments and to the charities sector. It is fair to say the sector welcomes appropriate regulation as a lack of regulation leaves it potentially open to abuse. The charities sector depends to a large extent on public confidence. It is estimated that currently more than €2 billion passes through charities in Ireland, yet there is no oversight of this vast sum of money. The Bill seeks to address this situation and to ensure that charities are subject to an appropriate level of scrutiny, but not to the extent that the resources of the charity that should be spent towards achieving the charitable purpose are expended on regulatory compliance. For this reason — I will highlight where the relevant measures are included — the Bill has been drafted to provide proportionate regulation, principally in recognition of the fact that the majority of charities operating in Ireland are small organisations operating on a largely voluntary basis.

I will now go through the Bill in more detail, focussing particularly on what might be regarded as the key provisions. Part 1, while largely technical in nature, contains a number of key provisions. Sections 1 and 2 are quite standard in that they set out, respectively, the Short Title and the definitions of terminology contained within the Bill. Different provisions of the Bill may be commenced on different dates, which will assist in developing the regulatory regime in a structured and strategic way. It is not anticipated that the Bill will come into force immediately after enactment. In other common-law jurisdictions, such as Scotland, it has taken some time — approximately two years after enactment — for the regulatory framework to be put in place on a statutory basis and a similar scenario is likely here. Key definitions in section 2 include a “charitable organisation” and an “excluded body” for the purposes of the Bill. These definitions will form the basis for determinations of charitable status by the new regulatory authority that is to be established. Section 3 is a most important section as it specifies the purposes to be regarded as charitable by the new authority. Every charity will be required to have been established for charitable purposes only. I will briefly outline how these purposes have emerged. The purposes listed in the Bill are based on what are known as the Pemsel categories of charitable purposes. The preamble to the Statute of Charitable Uses 1601, sometimes known as the Statute of Elizabeth I, contained a list of purposes or activities which the State believed were of general benefit to society and to which the State wanted to encourage private contributions. To date there has been no definition of “charitable purposes” in statute law.

The list in the preamble to the 1601 statute, which has formed the foundation of the modern definition of “charitable purposes”, has developed entirely through case law. Case law has interpreted this as giving rise to four categories of purposes and these are the four categories listed in section 3(1) of the Bill, with some necessary contemporary interpretations. The Revenue Commissioners have referred to these categories when deciding whether an organisation is eligible for charitable tax exemptions. Section 3(10) sets out in greater detail than has been done before what are to be considered “other purposes that are of benefit to the community”, which is the fourth Pemsel category. In enshrining these “charitable purposes” in primary legislation for the first time, the Bill is seeking neither to narrow nor to broaden the purposes that have emerged through case law over the years.

[425]As well as being required to be established for a charitable purpose only, section 3 provides that charities will need to show that there is a public benefit to their activities. This is a longstanding requirement of charities. This provision is to deter charities being set up to benefit only a limited number of persons who may have a personal connection with the founder of the organisation.

Traditionally, and uniquely, there has been a presumption of public benefit for religious charities, which if retained would have effectively tied the hands of the authority in dealing with applications particularly from newer religious organisations that have emerged in recent years. To counteract this, on Report Stage in the Dáil this automatic presumption was removed and replaced by a rebuttable presumption. Quite simply, the authority would not have been in a position to refuse an application for registration from any organisation claiming to be advancing religion. This is not acceptable particularly in a context where so many new religions and churches are being established. However, this provision should not affect existing religious charities which will be automatically deemed to be registered, as I will explain later.

Section 4 is a technical section allowing the Minister to make regulations under the Bill as enacted while section 5 provides that the authority shall be funded from the Exchequer. Section 6 allows for a mandatory review of the operation of the Act after five years in operation. This Bill is the first step only in the regulation of charities in Ireland. This review will allow the opportunity for any issues relating to the regulatory system that may have emerged — I am sure some will have — to be identified and addressed.

Section 7 clearly separates the functions of the new authority, which will be to consider the charitable status of organisations, from that of the Revenue Commissioners, which will remain fully responsible for deciding whether an organisation is eligible for charitable tax exemptions.

Section 8 is a technical section that excludes organisations that are involved in securitisation activities from the provisions of the Bill. The Bill was never intended to comprehend such organisations which play an important role in the Irish financial services sector. It is considered that placing an additional layer of administration on such organisations might damage Ireland’s position as a suitable base for such organisations and threaten jobs in the sector. These organisations do not fundraise directly from the public, and are essentially dormant for the majority of their existence. Section 9 sets out the arrangements for the servicing of documents under the Bill.

Section 10 sets out the penalties for both summary and indictable convictions for an offence under the Bill. Members will note the strong penalties applicable to those convicted on indictment in particular. This is intended particularly to deter serious white-collar crime within charities. Members will also note that costs arising from successful proceedings may be recouped by the authority. Section 11 refers to the elements of the Charities Act 1961 that are repealed by this Bill. The detail is in Schedule 2.

I move now to Part 2 of the Bill, which provides for the establishment and operations of the new charities regulatory authority. Sections 12 and 13 empower the Minister to set an establishment day for the purposes of the Act, on which day the new charities regulatory authority is to be established. The new authority will be the centrepiece of the regulatory framework. Section 14 sets out in detail the functions of the new authority. I will focus on some of these in particular. The authority will be an independent body and will obviously have strong regulatory powers, the specifics of which I will detail later as they emerge in the Bill. However, it will also have a supportive role for charities themselves in recognition of the fact that most charities in Ireland are small volunteer-run entities.

A key function will be to increase public trust and confidence in charities, as enhanced public confidence will benefit the charities sector as a whole. It will also have a role in disseminating [426]information on charities, and of particular importance in this context it will be required to establish and maintain a register of charities. This will be the key interface between the public and the authority and will be of critical importance in increasing transparency. It will also enable donors to make more informed decisions as to which charities they choose to support and to verify the charitable bona fides of any organisation. Quite simply, if an organisation is not on the list, it is not a registered charity. Finally, this section also provides that the functions of the authority may be undertaken by any member of staff authorised to do so.

Section 15 provides that although the authority may be independent in the performance of its functions, the Minister of the time may require it to comply with certain Government policies. These policies would not relate to the day-to-day operations of the authority under the Act, but to general policy areas such as staffing, recruitment, procurement etc. Section 16 clarifies that the authority will be funded from the Exchequer. Section 17 is a standard but necessary provision allowing the authority with the consent of the Minister and Minister for Finance to borrow money.

Section 18 is a technical provision allowing the authority, where it has incurred costs in managing, preserving, administrating or recovering the property of a charitable organisation, to recoup such expenditure from the estate and funds of that organisation. This is merely an enabling provision and it would not be envisaged that it would be invoked in all such cases.

Section 19 relates to the appointment of the chief executive officer. The Minister will have the option of appointing a chief executive officer in advance of the authority itself being set up to prepare the groundwork for the authority. Subsequent CEOs will be appointed by the authority with the consent of the Minister. CEOs cannot hold any other office without the consent of the Minister. Following on from this, section 20 sets out that the CEO will be responsible for the efficient and effective administration of the body and in that context will be accountable to the authority. The CEO may make recommendations to the authority. There is a reserve power in section 20(4) allowing the authority, where the CEO position is vacant, to appoint another member of staff to act as CEO.

  12 o’clock

Section 21 allows the CEO with certain limitations to delegate with the agreement of the authority one or more of his or her functions to a member of staff of the authority. Sections 22 and 23 copperfasten the accountability of the CEO to both Houses of the Oireachtas. Section 22 relates to the Committee of Public Accounts. Section 23 outlines that the CEO is also answerable to other committees of the Oireachtas apart from the Committee of Public Accounts. Section 24 allows for the appointment of staff for the new authority and that the pay, and terms and conditions of employment shall be subject to the consent of the Minister and the Minister for Finance.

Section 25 allows for the transfer of staff from the Office of the Commissioners of Charitable Donations and Bequests for Ireland, which will be dissolved, to the new authority. It specifies that the terms and conditions applicable to such employees shall not be affected by the transfer, unless any such change has been discussed and agreed with the relevant union or association. Previous service with the dissolved body will be also reckonable under the relevant employment legislation.

An Leas-Chathaoirleach: Information on Paddy Burke  Zoom on Paddy Burke  I must call the Acting Leader.

Senator Labhrás Ó Murchú: Information on Labhrás Ó Murchú  Zoom on Labhrás Ó Murchú  I move the suspension of the House for 15 minutes.

Sitting suspended at 12.01 p.m. and resumed at 12.15 p.m.

Deputy John Curran: Information on John Curran  Zoom on John Curran  My apologies for that interruption.

[427]Section 26is another standard provision in legislation of this type. Here, the authority will be required to introduce a superannuation scheme for its employees, and any such scheme will have to be approved by the Minister and laid before the Oireachtas. Any disputes in regard to superannuation benefits shall be adjudicated on by the Minister for Finance. In the event of a person who transferred to the new authority becoming eligible for superannuation benefits before the authority has introduced its pension scheme, the section provides that such benefits shall be calculated on the basis of the criteria that applied immediately prior to the dissolution of the office of commissioners.

It is envisaged that the new authority will work closely with other regulators and law enforcement bodies. Section27 accordingly allows for disclosure of information by specified regulators, law enforcement bodies, or other organisations as may be prescribed by the Minister, relating to possible offences under this legislation, to the authority.

Section 28 is the converse of section 27 in that it allows the authority to share information with other regulators and law enforcement agencies, both within and outside the State, where it suspects an offence has been committed. Any such information may be used only for the purpose of detection, investigation or prosecution of an offence. The new authority will be expected to approach its business in a planned and strategic way. Therefore, under section 29, it will have to prepare on an ongoing basis a three-year strategy statement, which the Minister will lay before each House of the Oireachtas.

Sections 30 and 31 require the authority to prepare annual accounts and an annual report, respectively. The annual accounts will be subject to scrutiny by the Comptroller and Auditor General. Both the accounts and the annual report are to be laid before the Oireachtas.

Section 32 is a more general information-sharing provision than that contained in section 28, which is principally offence-related. Such information must be required by the relevant body for the performance of its functions.

I am endeavouring to ensure the authority will adhere to the principle of joined-up government and the avoidance of dual regulation. Section 33 allows for administrative, non-binding co-operation arrangements between the authority and other relevant regulators. Such arrangements are intended to minimise the potential for duplication of activities and enhancing the consistency of decisions across the various regulatory frameworks that are in place.

The Bill will apply to charities based in other jurisdictions that operate in Ireland. EU or EEA charities will not be required to have a place of business in the State. It is considered, therefore, that section 34, which allows for information sharing and co-operation with regulators in other jurisdictions, will prove extremely useful. Ministerial approval will be required for any such arrangements, and the Minister shall also prescribe the foreign statutory bodies concerned.

Section 35 enables the authority to consult those who are affected by the performance by it of its functions. As a follow-on to this section, section 36 provides for the establishment by the authority of consultative panels. It is envisaged that such panels will play an important role in developing proposals for consideration by the authority and engaging with the sector. The section also sets out the administrative arrangements and conditions that will apply to any such panels established. Each panel will be required to submit an annual report to the authority. This report shall be published on the Internet, as will any observations or proposals made by a panel relating to its terms of reference.

Section 37 enables the Minister to request the authority to establish a consultative panel to consider specific matters of relevance or interest to him or her. Equivalent terms and conditions will apply to such panels as would apply to a panel established by the authority other than at the behest of the Minister.

[428]The Attorney General has, up to now, had a role as the “protector of charities”. Such a role might involve initiating legal proceedings in defence of charities, participating in proceedings brought by others, or carrying out certain functions under the Charities Act 1961. In consultation with the Office of the Attorney General, in the context of a new statutory regulatory framework for charities, with a strong yet supportive authority as the centrepiece, it has been agreed that it is no longer essential for the Attorney General to have such a role. Therefore, section 38 transfers any relevant functions that were previously vested in the Attorney General to the new authority on establishment day. I thank the current Attorney General, Mr. Paul Gallagher, and his predecessor, Mr. Rory Brady, for their personal and positive engagement in the development of this Bill over recent years, and I also thank their officials.

Part 3 of the Bill sets out in greater detail how the authority will regulate the sector in practice. A key measure is the establishment, for the first time, of a register of charities. This is provided for in sections 39 and 40. This register is to be available to the public, including by electronic means.

Section 40 provides for any organisation that has qualified for charitable tax exemptions to be automatically deemed to be registered as a charity. This approach arose from my amendment on Report Stage in the Dáil and is designed to ease the administrative burden for the charities themselves, and for the authority, which would otherwise have had to deal with a huge volume of applications for registration within a very short period.

Under the arrangements set out in section 40, organisations whose charitable bona fides have been already examined and accepted by the Office of the Revenue Commissioners — it is estimated that there are in excess of 7,000 such organisations at present — will not be required to submit to the new authority the full range of material normally required from new applicants. Any relevant information may be provided by Revenue, or requested by the authority from the charity, if necessary.

Organisations that do not hold charitable tax exemptions will be required under section 39 to apply directly to the new authority for entry onto the register and to provide the information listed in subsection 39(5).

Members will note references in sections 39 and 40 to charities established in the State, charities established in another EEA state and charities established outside the EEA altogether, in the context of their providing information on their principal place of business to the new authority. For clarification in this regard, my legal advice is that it is not appropriate to insist that charities established in the EEA, although operating in this jurisdiction, have a principal place of business in Ireland. It is possible to insist on charities from outside the EEA having a principal place of business here. Therefore, there is a need for differentiation in terms of information to be provided by Irish charities and their EEA-based counterparts.

In the case of new applicants under section 39, the authority will have to make a decision as to whether the applicant is a charity before entering it onto the register, inform the applicant of its decision and state the reasons for its decision where an application is refused. It will be an offence for an applicant to knowingly provide false or misleading information to the authority. Any organisation on the register must inform the authority when any of the particulars relating to it entered on the register cease to be correct. The authority will be responsible for maintaining the accuracy and integrity of the register.

As part of the joined-up approach to regulation, the authority will have to inform the registrar of companies whenever a company applies for entry onto the register, as the Bill makes special provision for co-operation between these two bodies to minimise dual filing and regulation.

[429]Section 41 makes it an offence for anyone to promote, or collect moneys, property or gifts for, a charity that is not on the register. This also applies to companies that are charities but which are not registered. The exception to this is where a decision is awaited in respect of an existing charity that has applied for registration under section 39.

Section 42 allows the authority to refuse to register an organisation where its name is the same or very similar to that of another charity on the register, where the name is considered misleading for the public, or where the name is considered offensive. The decision of the authority is subject to appeal. This section also provides that a registered charity cannot change its name without the consent of the authority. The authority may refuse to accept a name change for the reasons I have outlined.

It is critical in the interest of public confidence that the register accurately reflect the charities operating in the jurisdiction, and only charities. For this reason, the authority may remove an organisation from the register where, having consulted the Garda Síochána, it forms the view that the organisation is an excluded body. Similarly, an organisation can be removed from the register for changing its name without the consent of the authority, or for failure to comply with the various accounts, audit and provision-of-information obligations contained in the Bill. Where the authority forms the view that an organisation is not a charitable organisation any longer, or that a charity trustee is no longer eligible to hold such a position, it can apply to the High Court for consent to remove the organisation in question from the register. Whenever an organisation is removed from the register under section 43, the authority will enter onto the register a statement to this effect, and the reasons for its removal.

Section 44 allows the authority, in similar circumstances to those covered by section 43, to remove from the register organisations “deemed” to be registered under section 40. It is important that the authority have the necessary powers to treat both categories of charity in an equitable way.

Section 45 sets out the process of appeal for bodies whose application to register has been refused, or where a body is removed from the register. Appeals will be heard by the charity appeals tribunal, and the decision of the tribunal will be binding on all parties to the appeal, including the authority itself. The Minister is also given a reserve right of appeal against a decision by the tribunal.

One of the major difficulties facing the public these days is the problem of differentiating between genuine charities and other organisations that are not so altruistic. In this context, a matter of significant public interest has been the door-to-door collections of clothes that are presented as charitable, but whose charitable bona fides are questionable. These lucrative collections, though not currently illegal, have impacted greatly on donations of clothes to genuine charity shops. Section 46 is intended to address the practice of non-charities creating a perception that they are charities. Usually, such charities would be careful to avoid describing themselves as charities, but this section will make it an offence for any non-charity to describe itself or its activities in a way that would cause members of the public to reasonably believe they are charitable, irrespective of whether they actually use the word “charity”.

The Bill provides that a charity must be established for charitable purposes only. Any organisation that only partially supports a charitable cause, while retaining a profit for itself would not be permitted to register. This section also requires any registered charity, unless specifically exempted, to describe itself as a registered charitable organisation in all public documents or in any other documentation that the Minister may prescribe. It will be much easier for the public henceforth to differentiate between charities and non-charities, and to make more informed choices in terms of donations. Section 46 also makes it an offence for a person to mislead the public as to where an organisation was established.

[430]Section47 requires charities, apart from those incorporated as companies that already have such an obligation under company law, to have available, on an ongoing basis, proper books of account for inspection by a person so authorised by the authority. It shall be an offence not to do so.

Section 48places an obligation on charities, apart from those incorporated as companies, to prepare an annual statement of accounts in such form as may be prescribed by the Minister. Similarly, it shall be an offence not to prepare this statement of accounts.

Section 49 requires the Companies Registration Office to forward to the authority the annual return, as required under company law, of any company that is a charity and any documents attached thereto.

Section 50 places an obligation on charities, again apart from those incorporated as companies, to have their accounts either audited, in the case of charities with income or expenditure in excess of a threshold, which the Minister may prescribe, or examined by an independent person, in the case of smaller charities below the threshold. An “independent person” may be so prescribed by the Minister, and the nature of the examination shall be a matter for the authority. This graduated approach is intended to alleviate the burden on smaller charities. However, there is a reserve power where the authority considers it necessary or where a charity has failed to meet its obligations under this section for the authority to direct any charity to have a full audit or itself appoint an auditor. Where the authority incurs any costs arising from such an audit, they may be recouped from the charity concerned.

Section 51allows the Minister to make regulations in respect of the duties and operations of auditors or independent persons under the previous section. It shall be an offence for any person not to co-operate with an auditor in respect of any such powers vested in him or her by the Minister.

As Members will expect, the authority will have a particular interest in the charitable activities organisations on the register. Section 52 provides that all charities, including those incorporated as companies, will have to provide an annual report on their charitable activities to the authority. The nature of the annual report will be prescribed in regulations by the Minister. I am committed to prior consultation with the sector on this matter. In general, charities will be required to submit their annual report, annual statement of accounts and the auditor or independent person’s reports together to the authority. In the case of companies that are not required under company law to annex their accounts to their annual return to the Registrar of Companies, their annual report under this section should be submitted with their company law accounts directly to the authority.

Section53 requires a charity to provide any information that the authority requests in writing to enable it to fulfil its statutory functions.

Increased transparency is one of the key aspects of the Bill. Section 54 requires the authority to make available to the public the annual report and any documents attached thereto. Given that the majority of charities fundraise from the public, it is considered that this provision serves a public interest. However, it is not considered that the same public interest applies to private charitable trusts which do not fundraise from the public, such as those set up by philanthropists. Therefore, although the authority will hold information in respect of such private trusts, it will not be available to the public.

Charity trustees play a key role in the operation of charities and the Bill puts in place certain provisions relating to the role of charity trustees. Section55 lays out the circumstances under which a person may become disqualified from acting as a charity trustee. These include where [431]a person has been convicted on indictment of an offence, has been imprisoned or where serious specified financial difficulties, such as bankruptcy, have arisen. Any person so disqualified may apply to the High Court for an order allowing him or her to act as charity trustee again. In the public interest, the authority is also required under this section to establish and maintain a register of disqualified persons.

Section 56 renders it an offence for a disqualified person to act as a charity trustee, though any actions undertaken by such an individual whilst so serving will remain valid. Any costs occurring to the charity or any benefits accruing to the disqualified person as a consequence of their actions shall be repayable to the charity.

Section 57 deals with the scenario where a person within a charity acts under the direction of a disqualified charity trustee. It shall be an offence for a person to so act unless he or she had reasonable grounds for not knowing that the person was so disqualified. On conviction under this section, the person will also cease to be qualified to serve as a charity trustee.

Section58 follows from sections 56 and 57 in that it provides that a disqualified charity trustee convicted under section 56 shall be personally liable for any debts accrued by the charity as a consequence of their actions while illegally serving as a disqualified trustee. The same applies to a person convicted under section 57 of knowingly acting for a disqualified charity trustee. However, this section allows for the court to grant relief from such personal liability where it is considered appropriate.

The sections that follow deal with the reporting of offences or suspected offences. Section 59 contains a provision requiring relevant persons to report to the authority in writing where he or she, in the course of carrying out their duties, forms the opinion that an offence under the Criminal Justice (Theft and Fraud Offences) Act 2001 has been, or is being, committed. A “relevant person” includes an auditor, a charity trustee, an investment business firm or a person involved in preparing the annual report.

Section 60is a technical provision allowing for qualified privilege in respect of any report prepared under the previous section. Section 61protects persons who report a suspected offence under either this legislation or under the Criminal Justice (Theft and Fraud Offences) Act 2001 from civil liability once they have acted in good faith.

Under section 62,specific provisions are in place to ensure that an employee may not be penalised by his or her employer for notifying the authority in good faith of a suspected breach of the legislation within the organisation. There shall also be a presumption in any employment-related proceedings that the employee acted in good faith unless otherwise proved. It is important, however, that persons are not permitted to deliberately make false statements to the authority and section 63makes it an offence to do so.

Part 4of the Bill sets out the investigative powers of the authority and the rights of the authority to seek documentation from charities. Under section 64, the authority may appoint an inspector to carry out investigations and to report to the authority on the investigation. A later section, namely, section 71, provides that any such report may be evidence in any proceedings arising.

In section 65,charitable organisations, including trustees, or other persons believed to be in possession of relevant information, are required to co-operate with any investigation in terms of appearing before an inspector and providing documentation or records to an inspector on request. Where reasonable grounds for concern exist, the inspector may also request records of bank accounts held by a charity or a trustee.

Section 66 provides that any report, or interim report, submitted by an inspector to the authority may be sent by the authority to specified persons or organisations, or published in full or in part.

[432]Under section 67,any expenses incurred by the authority in relation to a successful investigation may, subject to an order of the High Court, be repaid to the authority.

Outside the specific context of an investigation, the authority may from time to time require books, documents or records from a charity or from a person believed to be holding such records and section 68makes the necessary provision. It will be an offence not to co-operate with such a request for information from the authority, although section 72 provides that legal privilege will apply to the production of certain documents under this part of the Bill.

The authority may also, under section 69,apply to the District Court for permission to enter and search premises where a charity does not comply with a request for information under the previous section. It shall be an offence not to co-operate with such a search. Any documents taken by the authority will be subject to certain restrictions in terms of their subsequent use and may only be passed on to the specific “competent authorities” listed in the section.

In my opening comments I said that the Bill is founded on the principles of reasonable and proportionate regulation and enforcement, given that so many charities are small and volunteer-led. It is not always appropriate to issue proceedings for what may only be minor, or unintended, breaches of the legislation. In this regard, under section73, the authority will have the option to impose intermediate sanctions on an organisation rather than initiate full proceedings. Examples of such scenarios include where an organisation has failed to comply with its reporting or accounting obligations under the legislation. Such intermediate sanctions might involve the removal of an organisation from the register until it complies fully with its obligations or entering a statement of the contravention on the register.

As I indicated, the authority will take on the role of “protector of charities”. In this context, section 74 allows the authority, where it considers that a charity or its property is at risk and where it is considered to be in the best interests of the organisation, to apply to the High Court for either an interim, interlocutory or permanent order to, for example, suspend, remove or even appoint a trustee.

In the case of a dispute concerning a decision of the authority, Part 5 provides for an extra-judicial appeals mechanism, to be known as the charity appeals tribunal, to help to avoid the costs associated with going to the High Court. This dispute resolution mechanism is intended to be accessible by all charities, irrespective of their size.

The provisions relating to the tribunal are set out in sections 75 to 79. It will have five members and membership will include persons with a legal background and persons with expertise relating to charities. The Bill allows the tribunal to develop its own procedures, subject to ministerial consent. Its proceedings will generally be in public, although a “non-disclosure” provision is available if required. Decisions of the tribunal may be appealed to the High Court on a point of law.

The new authority will also be required to carry out the functions under the Charities Acts 1961 and 1973 currently carried out by the Office of the Commissioners of Charitable Donations and Bequests for Ireland, which is to be dissolved on establishment day. Part 6, consisting of sections 80 to 87, contains fairly standard technical provisions which allow for the transfer of statutory functions from a dissolved body to a new authority. They deal with, for example, the transfer of land or property and the transfer of any business in hand to the new authority from the commissioners.

I acknowledge and pay tribute to the Office of the Commissioners of Charitable Donations and Bequests for Ireland. The chairman, the Honourable Mr. Justice Francis D. Murphy, and his fellow commissioners have made a great contribution to public service in Ireland by willingly [433]providing their considerable expertise without charge to the State for many years. One of the significant challenges facing the new authority will be taking on the role of the commissioners.

On Report Stage in the Dáil, I added two new sections to the Bill relating to charity trustees. The first, in section 88, will allow trustees and persons personally connected with trustees to receive remuneration in respect of non-trustee services provided to a charity. The second provision, in section 89, allows charities to take out indemnity insurance in order that charity trustees are not personally liable for any losses accruing to the charity as a consequence of the performance of their duties. Both new sections were broadly welcomed.

As regards the remuneration provision, charity trustees are not currently permitted to receive any remuneration from their charity for non-trustee services provided. Under my amendment, a trustee may provide professional or other services unrelated to their trustee role to the charity, perhaps for a fee less than the going rate. Certain controls are in place to prevent abuse of the privilege but the bottom line is that remuneration may only be paid where it is in the best interests of the charity and it must not be for trustee services.

The fact that charity trustees are currently potentially personally liable for any losses accruing to the charity as a consequence of the performance of their duties acts as a disincentive to potential charity trustees by leaving voluntary charity trustees exposed to an unreasonable personal risk. The provisions of section 89 seek to address this issue and thus encourage citizens to take on the role of charity trustee.

Part 7 updates certain provisions of the Street and House to House Collections Act 1962. As Members will appreciate, the nature of fundraising has developed considerably since 1962. For example, the concept of collecting “promises of money” through direct debits or standing orders did not arise in 1962, whereas it is now very important to charities in providing a steady and secure income stream. Sections 90 to 93 in Part 7 will bring this method of fundraising within the collection permit regime administered by the Garda Síochána for the first time, as well as enhancing the security and transparency of collections generally. This will serve the interests of legitimate charities and increase public confidence. These sections try to ensure that charities, irrespective of the method of fundraising used, whether cash or non-cash, have reasonable access to permits. The definition of the word “money” in the 1962 Act has also been broadened beyond mere notes and coins. Another development in the area of fundraising has been the practice of selling items or tokens for a specific price. The Bill will also address this matter.

Given that fundraising practices of charities are constantly developing, the regulation of the operational aspects of fundraising does not always sit well within the rigidity of primary legislation. To address this issue, my Department is developing with the sector an approach to regulate, through non-statutory agreed codes of practice, the operational aspects of charitable fundraising. However, section 94 gives the Minister a reserve power to make statutory regulations on fundraising should the non-statutory approach not succeed.

The final section of the main body of the Bill, section 95, exempts social finance lenders from supervision under the financial services regulatory elements of the Markets in Financial Instruments and Miscellaneous Provisions Act 2007. They will instead be regulated by the authority, thus avoiding dual regulation.

The First Schedule sets out the legal status of the authority, the appointment of members of the authority and the procedures to be followed by it. The authority will have a minimum of nine and a maximum of 15 members. At least three members will have a legal background and provision is also made for persons with experience of charitable work to serve as members. Members will be appointed by the Minister with the approval of the Government.

[434]This Schedule sets out how and why members of the authority might be removed from office. It shows how conflicts of interest involving members or members of staff should be handled and allows the authority to establish committees to assist and advise it or perform functions that might be delegated to it. The Second Schedule is purely technical. It is a table showing legislation that is repealed by the Bill.

Members will appreciate that this Bill is substantial. I express my thanks to the House for the opportunity to give what was perhaps an unavoidably lengthy overview of the legislation. Senators agree, however, that the work of charities is too important to be left bereft of any real scrutiny and that this is very necessary legislation. As I stated, the Bill was welcomed by all sides in the Dáil and the debates were positive and constructive. I acknowledge the contributions made by Deputies Michael Ring and Jack Wall and colleagues who stood in for them. Many of the contributions were technical and required a great deal of work. The debate was highly constructive and I am confident Senators will engage in the forthcoming discussions on a similar basis. I commend the Bill to the House.

Senator Jerry Buttimer: Information on Jerry Buttimer  Zoom on Jerry Buttimer  Cuirim fáilte roimh an Aire Stáit. Ba mhaith liom buíochas a ghabháil leis as ucht an cuireadh chuig cruinniú le h-oifigigh an Roinn Pobail, Tuaithe agus Gaeltachta. The consensual approach taken by Opposition parties in the Dáil will continue in this House. While the Fine Gael Party welcomes the Charities Bill 2007 in principle, as noted by Deputy Ring, my party’s spokesperson in the Lower House, we have certain reservations. I, too, will raise anomalies in the Bill, for example, the absence of provisions on the promotion and advancement of human rights.

Senator David Norris: Information on David P.B. Norris  Zoom on David P.B. Norris  Hear, hear.

Senator Jerry Buttimer: Information on Jerry Buttimer  Zoom on Jerry Buttimer  This is a glaring omission. This legislation has been a long time in gestation and reform of the charities sector is long overdue and necessary. I hope it will add to and enhance legislation in this area and, most important, protect those involved in the charities sector. As someone who is involved in sport and charity, I welcome the Bill.

While this legislation will, if passed, introduce stronger regulation, questions still need to be answered. I hope the provisions outlined by the Minister of State will not be as draconian as they appear. While those involved in the charity sector broadly support the Bill, they have reservations and seek clarity.

I pay tribute to paid officials and volunteers of charitable organisations and those engaged in charitable activity across the country. The thousands of charitable organisations which hold flag day and church gate collections do immense work and deserve great praise. I hope the Bill will enhance their work. Fund-raising, as the Minister of State has indicated, has changed considerably, but the needs of charitable organisations and those who represent them have not, mainly because of the failure of successive Governments to look after them and because of the manner in which society has evolved. The role of a regulator must be to provide help and assistance for those involved. While there must be transparency and accountability, there needs to be advice and a consensual approach from the regulator, not a “Big Brother” overseeing matters. I know from talking to the Minister of State that this is not his wish either.

Fine Gael will adopt a consensual approach to the Bill, but we shall make known our reservations and reserve the right to table amendments on Committee Stage. The regulation of the charities sector will create a regulatory framework within which charities may operate. There is no doubt, from talking to various organisations, that this will transform the sector which, as the Minister of State indicated, has been largely unregulated. I mentioned transparency and [435]accountability and charitable organisations need to adhere to these objectives, for the sake of the bodies themselves and the people with whom they work. The establishment of a charities regulator will bring about change. This must not mean, however, that fees or large amounts are levied on charitable organisations which will now be protected from rogue operators. It is accepted that existing structures need to be strengthened and we need to monitor and regulate charities.

I know from personal experience that many charities aspire to high standards of fund-raising and they will welcome the changes outlined in the Bill. However, there is some concern that the extra layer of structural regulation will involve a compliance cost factor. I hope that will be examined and that excessive fees will not be the result. Controls on fund-raising are overdue. We are all aware of flag days and church gate collections for different charitable events that are largely unchecked. There is, however, one issue that needs to be addressed in the Bill, under section 91, which deals with the duties of collectors. I understand the premise here is based on creating public confidence, instilling accountability and the tightness of control.

The Irish Cancer Society, to take one organisation, hosts a national daffodil day. Under the Bill before the House collectors for that organisation must have a sealed box to collect the money. I have spent many a Friday collecting for this organisation, as have many of my friends. A fee is charged for the daffodil emblem, the daffodil or the lapel pin. However, under the legislation, as proposed, this daffodil day cannot continue, which poses a problem for the Irish Cancer Society. I am merely giving this as an example. The society takes in an inordinate amount of money on that fund-raising day, but that must now stop, according to the Bill as it is currently constituted. That is wrong. If a person has only €1, he or she cannot buy a daffodil that might cost €2. Collectors cannot be given a float by the charity concerned, which has thousands of collection points across the country on a particular day. That difficulty needs to be addressed on Committee Stage.

I know the Minister of State does not intend to thwart the efforts of that or other similar charities and I hope we can come up with a way to have a national collection day with, perhaps, the regulator nominating a particular day for a specific charity. Other charities that offer items that people may buy, such as the Irish Kidney Association and the ISPCC — with its holly day — will be similarly affected.

In my opening remarks I mentioned the promotion of human rights. There has been a reluctance to include this issue in the Bill and I am not sure why. I was hoping the Minister of State would accept that organisations that promote and advance human rights should be included, under section 3, which sets out clearly what constitutes the purpose of benefit to the community. Surely the advancement of human rights falls into that category. In England, Scotland and Wales the advancement of human rights is inserted in the charities legislation. The Charities and Trustee Investment (Scotland) Act 2005 and the Charities Act for England and Wales, both include the advancement of human rights and the promotion and advancement of equality and diversity as provisions under charitable purposes status. Why can this not be done here?

An amendment could be inserted under section 3(10), as the Minister of State did in the other House, under the heading of environmental sustainability. Perhaps the Greens were more worried about the environment than about human rights. I do not know and I am not saying that, but——-

Senator David Norris: Information on David P.B. Norris  Zoom on David P.B. Norris  It is the Senator’s human right.

Senator Jerry Buttimer: Information on Jerry Buttimer  Zoom on Jerry Buttimer  ——I do not understand the reason in this case, and I ask the Minister of State to examine this again on Committee Stage. Human rights, as Senator Norris I am sure can say more eloquently than I, are of major importance and benefit to the community. I [436]have had representations from the Irish Council of Civil Liberties and a host of other organisations which make very pertinent and strong claims. Under the provisions of the Bill, such an amendment could be inserted. I should like to hear the Minister of State’s views on how its continued exclusion may be justified as an express category of purpose that is of benefit to the community. I look forward to his response in that regard.

Turning to the issue of protection of directors, trustees etc., I listened carefully to the Minister of State’s address in this regard and noted what he said. However, this week I met members of Respond who raised serious concerns about the Bill, and claim it fails to provide specific protection for voluntary directors. They say that if an organisation such as Respond enters into a contract with a body such as the HSE, for example, and there is a withdrawal of funding, the trustees are liable for any deficit. I know that indemnity for trustees is provided for in the Bill, but I remain unconvinced in this regard, to be honest.

The exclusion of sporting clubs is a contentious point, with the Federation of Irish Sports calling for the inclusion of sporting organisations under the legal definition of a charitable purpose. Again, this is an area of benefit to the community, as people donate, bequeath legacies, leave money in wills etc, to such organisations. If, for example, a person leaves money to a charitable organisation, it goes straight to the body concerned. However, if it is left to a sporting club, a tax must be paid on it, which I believe is unfair — since sporting clubs are of major benefit to the communities they serve.

I also want to refer, as Deputy Michael Ring did in the other House, to the issue of bogus mass cards. I realise the Minister of State is examining this area and I hope he might table an appropriate amendment on Committee Stage. The Irish Missionary Union has been very proactive in this regard. The impression given is that the money for mass cards is given to a charity or direct to a beneficiary, but this does not happen, as the Minister of State knows. There is deception in this regard, and that needs to be addressed. Commercialisation of masses is not of benefit to the people involved, and I look forward to the response of the Minister of State in that regard.

Prior to this Bill being debated in the Houses of the Oireachtas, many organisations spoke to Members, and I want to pay tribute to them for their assistance and help. There are issues to be addressed. I hope this legislation will provide assistance for charities, for training on compliance issues and an easier regime.

  1 o’clock

Regarding the Competition Authority, the Minister of State has said appointments will be made by the Minister with the approval of the Government but can we have the election of representatives of charitable bodies to it? Inclusion Ireland is one such example which encompasses many charitable organisations providing services for those with a disability. I am worried, given the propensity of Governments to appoint their own to boards, that we will lose valuable people from charitable organisations. I mean no disrespect to the Minister of State, as I am sure he will appoint very good people, but if one looks at the scope of Government appointments, in the last ten years they have been predominantly Fianna Fáil members, with some members of the Progressive Denmocrats and the Green Party. I am concerned about this.

The promotion of human rights is of importance, as is the collection on Daffodil Day. These are of huge concern, not just to my party but to many others. I will table an amendment to section 91 of the Bill, and also one on the human rights issue because having spent many daysfund-raising we need to protect organisations which offer an emblem or a token. I do not understand why the issue of human rights is not dealt with in the Bill. It is a grave mistake. In the budget the Government cut the allocations to agencies and I wonder if we are eroding the [437]importance of human rights issues by stealth. I hope we are not. I do not mean to be cynical but the advancement of community would benefit from having the issue of human rights dealt with in the Bill.

I thank the Minister of State for his work on the Bill and his courtesy in providing for a briefing. I also pay tribute to his officials who were very courteous and helpful. There is a consensual approach. I do not agree with everything included in the Bill and have some reservations, but welcome the general thrust of the Bill. Having spent years as a member of boards, I know there is a need for regulation, accountability and transparency and that many charities which have not had these are worried and have a right to be so. If we are dealing with money and people, we need accountability.

This is very important legislation which is long overdue. There will be a consensus approach on this side of the House. I look forward to the next Stage of the Bill when we can tease out anomalies. We will not oppose the Bill on Second Stage.

Senator Labhrás Ó Murchú: Information on Labhrás Ó Murchú  Zoom on Labhrás Ó Murchú  Cuirim fáilte roimh an Aire Stáit agus oifigigh na Roinne. Níl aon amhras ann ach go raibh an soiléiriú a thug an tAire dúinn ar an mBille thar a bheith cabhrach. Thugas faoi ndeara go bhfuil an Chomhairle curtha i gcrích. Tá sin soiléir sa Bhille freisin. Molaim an tAire Stáit as Bille chomh ilghabhálach le seo a chur ar fáil dúinn.

I welcome the Bill which has been in gestation for some time. All those involved in the charity movement had hoped to see their concerns on certain issues addressed in it. I welcome the broad consultation which has taken place. There are approximately 7,000 charities registered in Ireland which gives us an idea of how extensive the sector is. It mirrors and reflects the attitude of the broader community towards charitable organisations.

I compliment and acknowledge charities which during the years have filled many gaps in humanitarian practices and ensured vulnerable people have always received support. That has been the tradition in Ireland for many years. The Bill does not obstruct but provides support, much of which is necessary. A good deal of the legislation in place is archaic and we have moved on, even on the issue of a common currency.

There have been some unfortunate cases that did not bring glory to us as a people or the charity movement. They had to be attended to and regulated for and I am glad that has happened. From what the Minister of State said and looking at the Bill, we acknowledge established charitable organisations but must also recognise that new charities will come into existence as needs emerge. The legislation does not just take account of the status quo but must also provide for what might happen in the future. That is important.

The number of staff in the regulatory authority will be between nine and 15. That is the correct number because it would be wrong to have a situation where there would be 25 or 30 staff based on representative arithmetic. It is important to have three legal representatives because there are many legal issues involved. I hope, however, that it will not be necessary to use some of the powers being given to the regulatory authority. I am glad to note that subsections with a consultative nature can be established within the authority. They too will have to operate within certain restrictions because they will have to produce reports. They will possibly be specialists in their own right and be able to reflect on a situation that might arise.

It is right that charities report on their activities each year. It does entail extra administrative work but also focuses the mind, which is important for charities. When one is obliged to produce an annual report, it provides an opportunity to consider if the aims and objectives set have been met, how effectively they have been achieved and if a redirection is needed in the following year. It is also good that there is accountability.

[438]I am glad smaller charities will not be subject to the same level — I mean this in the best sense — of bureaucracy. This is very important because we hear that voluntarism is being challenged more than it was, although it has been stated that approximately 1.8 million people are involved in some way in voluntary activity, which does not surprise me. There is also a danger that volunteers might consider that once they provide a service, they are under a spotlight and that matters might be reported on by the media. If an extra burden were to be added, many volunteers might leave the sector and there would be a gap. I am glad the Bill has been thought through to this extent. That is important for many reasons.

Obviously, there will be penalties involved. However, even with penalties, there is always a possibility of appeal. I notice there is provision for a particular case to go to the High Court with regard to whether the charity can remain on the register. It is important to have such provisions because often we end up with what we regard as gilt-edged legislation, but when we try to operate it subsequently we discover the difficulties with it. I am glad, therefore, the potential difficulties have been thought of in advance.

The concept of a register of charities is long overdue. Many of us have been confronted with whether we were donating to a bona fide charity. As has been mentioned, this happens in particular with regard to clothes. The collection of clothes is a lucrative business. When people read the leaflet dropped to their houses seeking donations of clothes, they are often not 100% sure whether the collection is for a genuine charity. In most cases it probably is not so.

It is only right that promoters of a charity who take a major portion of the income for themselves should not be allowed on the register of charities. Everybody has doubts about contributions to such charities. People wonder how much goes to the charity and how much goes to the sponsor and on administration. Covering this area in legislation will ensure people no longer have doubts in their minds. I always feel sorry for charities that collect legitimately but are confronted by public doubts about the money collected. Perception and confidence are vital to uphold the work of charities and ensure their success. Many millions are lost to charities each year because people doubt that when they put their hands in their pockets to contribute or donate clothes the moneys raised go to the cause for which it is intended. The provisions of the Bill can only be helpful in this regard.

I support Senator Buttimer’s point about the Irish Cancer Society. We have had a briefing on that issue. While one can fully understand why sealed boxes are necessary, will the Minister of State expand on this issue? As Senator Buttimer said, there could be hundreds or thousands of people involved in collecting for the society and it might not be feasible to provide them with floats. However, when selling an item, if they have sealed boxes they may have to go into shops to get change for people. I am unsure how we can balance this with public confidence in regard to the sealed box. Perhaps the Minister of State will comment on this.

As a person who generally speaks on the issue of human rights, I take up the same point raised by Senator Buttimer. While we do not have an implicit definition of a charity, something we have not had in the past either, the “greater good of the community” seems to be an inherent element, as was mentioned in the Minister of State’s speech. The term “human rights”, which is all-embracing and expansive, brings the greater good of the community into focus. Will the Minister of State comment on this? Not a day passes in this House but an issue of human rights is raised, particularly on the Order of Business. Full marks to Senator Norris who is at the forefront in this regard. The area is so extensive there may be need for separate legislation, but I would welcome the Minister of State’s comment in this regard.

On the issue of the trustees of a charity, I am delighted to see the suggestion that the organisation should or could take out indemnity insurance. Is this compulsory or is it a matter [439]for the organisation to decide? Indemnity insurance is important because the responsibilities arising for trustees as a result of this legislation are so great. This area must be clarified because it is something trustees will be concerned about. We must be sure volunteers are not exposed to legal action as a result of the legislation because they are fundamental to the work of the charity.

On the issue of bogus collectors, I am glad we have covered what might be called “holding out”. Bogus collectors are particularly careful not to use the word “charity” in their literature. However, when one reads between the lines, that is the implication. I am glad this is covered so that if by implication they represent themselves as a charity, there is a mechanism to deal with that.

I am delighted the current 7,000 registered charities will automatically transfer to the new regulatory authority. If that were not the case, we would have a logjam and might wonder in years to come why so many elements of the legislation had not been implemented. There are two major strengths to the transfer. First, it recognises the establishment of the new regulatory authority and, second, it presupposes that existing registered charities will not need to go through the same administrative requirements as previously.

I thank the Chair for allowing me to make my points. I support the Bill and am delighted it has cross-party support because it is necessary for the work of charities to continue. The Bill is timely and the Minister of State and his officials have done an excellent job on it.

Senator David Norris: Information on David P.B. Norris  Zoom on David P.B. Norris  I welcome the Minister of State and the Bill. As indicated, it is a substantial Bill. There is no need for the Minister of State to apologise for his lengthy introduction to it because it was necessary. This is the first regulation in a long time on the issue. The Minister of State cited a statute of Queen Elizabeth I, which was a long time ago.

I will be constructive, as have been my colleagues. However, in addition to welcoming the main provisions of the Bill, I am concerned about some concealed effects it may have. Senator Buttimer referred to most of these concerns. It seems we have been briefed by similar organisations. It is important the public’s trust and confidence in charities is sustained. Once or twice over the past ten or 20 years, this confidence has been knocked, but by and large the charities involved have subsequently regulated themselves satisfactorily.

I am glad the Minister has looked at the question of religious organisations. I take it that includes the Church of Scientology, the Moonies and such groups. They need to be looked at carefully and I have no difficulty with that. Will the Minister of State comment on whether there will be a relationship between the newly established body and the dormant accounts fund and the national lottery fund? These two funds disburse significant amounts towards charities.

Everybody will welcome the charities regulatory authority, the register of charities, the exclusion of specifically political lobby groups from the definition of charity, charity trustees and the clarification of their responsibilities in law, and the regulation of street collection. That has been necessary for a long time. I do not mean to blow my own trumpet, but I support many charities by way of a cheque payment.

I regularly send them a reasonably fat cheque on foot of a harrowing photograph. One immediately receives a note of thanks that includes an even more harrowing photograph and one’s heart is bled dry. This is fine and I can put up with that. Sometimes however, I pass eight different individuals or charities. How can as many as three different charities be collecting on Grafton Street on the same day? It demeans the process and there must be some regulation in this regard.

However, the principal matter I wish to examine today is precisely the point first raised by Senator Buttimer and then alluded to in his gracious way by Senator Ó Murchú. I refer to the [440]astonishing absence of human rights provision from the Bill, which is very sinister. If the Minister of State does not believe the leading organisations in this area are seriously concerned, he should look at the Gallery, in which distinguished people from practically all such organisations can be seen at present, including representatives from the Irish Council for Civil Liberties, the Free Legal Advice Centres, Front Line and Amnesty International. They are not present because they consider the debate to be entertaining but because they rightly are very concerned. The promotion and protection of human rights must be included in this Bill’s provisions and I have tabled an amendment in this regard. I am sure Members on this side of the House will fight strongly for it. Moreover, I appeal to the decent humane people, such as Senator Ó Murchú, who has a distinguished track record and has taken quite a few risks with regard to matters such as the Iraq war, about which he was outstanding, as well as the Green Party Members, to use their leverage on this issue. The Green Party has spoken about this in the Dáil and the Minister of State should listen to them.

While Senator Ó Murchú is delighted with the Bill and Senator Buttimer has expressed some concerns, I am suspicious and will explain why. I look at the budget and recall the comforting words, to quote the Communion service, of the Minister for Finance, Deputy Brian Lenihan, who stated that one of the three aims of his budget was to protect “those who are most vulnerable in our [country]”. Three weeks ago, when attending a photo opportunity at the AIB Bank Centre, the Taoiseach, Deputy Brian Cowen, stated:

However, what does the Government then do? It has hammered every human rights organisation in Ireland, which is astonishing. Unfortunately, the financial crisis has blown Members’ protests off the media radar. The Government has abolished the Combat Poverty Agency and has spancelled the Equality Authority by halving its income and dispersing it around the country. It has mixed up all kinds of people with different expertise. All such organisations have been hit because they advocate human rights and decent levels of support for the most vulnerable people. In the kind of financial crisis we face both globally and domestically, we need such organisations to be strengthened and not be subject to an attempt to neuter them. All sensible people undoubtedly would conclude that the promotion of human rights and the provision of support to those throughout the world who defend human rights definitely should be considered under the objectives of this Bill. However, this is not the case and the only inevitable conclusion one can come to is this constitutes a further indicator of a policy by the Government to limit the expression of such groups.

For many years, I was a member of the council, committee, board or whatever it was, of the Irish Council for Civil Liberties and, consequently, I know a certain amount about it. It was founded in 1976 by Mary Robinson and Kader Asmal and I became involved fairly early on. Members should consider its achievements. For example, it has helped to secure the establishment of an independent Garda Síochána Ombudsman Commission and the legalisation of the right to divorce. It has furthered children’s rights, the decriminalisation of homosexuality and enhanced equality legislation. Its mission statement, to use that abused phrase, is to advocate for positive changes in the area of human rights and to monitor Government policy. Is the reason for its exclusion because it will be effective in monitoring Government policy? This makes me very worried. Its purpose also is to ensure the Government complies with international standards and to conduct original research, publish reports, run campaigns and so on.

[441]Deputy Joe Costello of the Labour Party noted it was strange that human rights should be excluded, as surely no better charitable cause existed. He also expressed his belief that this is expected of Ireland by the international community under the European Convention on Human Rights as well as broader international commitments under the United Nations charter. Senator Buttimer ably indicated the position that obtains in the neighbouring island. I am astonished by this omission in that light. I have been a Member for 21 years and routinely have witnessed the Government introducing, en bloc, legislation that was made in the United Kingdom. We follow it slavishly. Hence, when it is not automatically done, as in this case, a specific decision has been made to exclude. It cannot be for legal reasons because if it was found possible in the neighbouring island, it certainly is possible here. As it has been done in Scotland, England and Wales, why not here? What is the hold-up?

This point was made, not for the first time although very ably, by Senator Buttimer today. It was made just as ably in the Lower House by a member of the Minister of State’s own party. I refer to a man with a conscience who comes from a family that has acted as a conscience within Fianna Fáil, namely, Deputy Chris Andrews. As the Minister of State also has a conscience, I ask him to reconsider this issue. Deputy Andrews asked why, if this could be done in Scottish or English legislation, it could not be done in Irish legislation.

Moreover, the Minister of State should not tell me it is not necessary because it is considered to be so. Among other matters, I have been informed the deeming provision may not be strong enough to ensure the survival into the new legislation of charitable organisations with a human rights element because some of them were established so long ago they may not have included the precise formula, in respect of this Bill, that will meet that requirement. Were the Minister of State to make the point that they will be included without being acknowledged, that would not be satisfactory either. First, I do not know this to be the case and, second, the Government’s reluctance to acknowledge them gives a bad signal of which it eventually will come to be ashamed.

Having mentioned Deputy Chris Andrews, I will refer to another element in the Government, namely, the Green Party. My good colleague and, I am proud to say, constituent, Deputy Mary White, stated:

Moreover, as stated previously, the Government cannot offer the excuse that it cannot accept amendments in the Seanad because the Bill would be obliged to go back before the Dáil and that it does not expect any amendments, because it already has expanded the Bill. The Government has expanded the Bill under pressure from the Green Party to include the environment. Is the environment more significant to the Government than human rights? That is what the Official Report will show unless the Minister of State accepts the tabled amendments. I have tabled amendments on this issue and I am sure my colleagues will support them unless they tabled theirs first, in which case I will be delighted to support them.

An Leas-Chathaoirleach: Information on Paddy Burke  Zoom on Paddy Burke  One minute remains to Senator Norris.

Senator David Norris: Information on David P.B. Norris  Zoom on David P.B. Norris  In that one minute, I will deal with a couple of items. First, I strongly support the business about Daffodil Day. I never have collected and loathe having anything to [442]do with money. I am awful at it and it makes me shiver. Sometimes they make me take up the collection in St. Patrick’s Cathedral and I have taken to refusing to do it. I simply will not do it. However, I did help them with the photo opportunities by clowning around. I know how terribly important——

Senator Alex White: Information on Alex White  Zoom on Alex White  It was no problem to the Senator.

Senator Jerry Buttimer: Information on Jerry Buttimer  Zoom on Jerry Buttimer  It was no bother to him.

Senator David Norris: Information on David P.B. Norris  Zoom on David P.B. Norris  It was no problem whatever. I know how terribly important it is. This is a question of change and of being able to give change when using a sealed box. The Minister of State will consider this issue.

Another matter, which also was mentioned by Senator Buttimer, was raised by the Respond housing agency. It pertains to the withdrawal of previously agreed State funding, thereby leaving an affected organisation with a hole in its funds for which it could be found liable. This matter must be addressed.

I refer to the question of sport, which is beneficial to the community. While some organisations, such as the GAA, receive enormous sums of money, they do a very good job and it is important in respect of the promotion of health. It is a primary vehicle for active citizenship and their exclusion from this legislation also may exclude them from access to philanthropy or grants administered by the Irish Sports Council and will deprive them of a certain level of legitimacy. A reply to the effect that a separate regime is provided under tax legislation for sport and so on would be inadequate. Under section 41 of the Finance Act 2002, tax relief is restrictive in that it is only available on donations made to certain sports bodies and on funding of capital projects that have ministerial approval. One could find oneself in the ludicrous situation of having money for a sports hall but none for a boxing coach and so on.

While these are important points, they are not half as important as the inclusion of human rights. The Minister of State is a decent and humane man whose heart is in the right place. His party is urging him to do this. Every single element of the House and all the relevant organisations are asking for it. I will use this opportunity to ask him to do the decent thing, which is his instinct.

Sitting suspended at 1.30 p.m. and resumed at 3 p.m.

Senator Brian Ó Domhnaill: Information on Brian Ó Domhnaill  Zoom on Brian Ó Domhnaill  I commend the Minister of State, Deputy Curran, on the work he has initiated since entering office. The Charities Bill 2007 will reform the charities sector and will provide protection to those engaged in charitable activities and who collect money for charitable purposes. Its purpose is to bring about a reform of the law relating to charities to ensure accountability and to protect against abuses of charitable status and fraud. It will also enhance public trust and confidence in charities and increase transparency in the sector. Together with the Charities Acts 1961 to 1973, the Bill will provide for a composite regulatory framework for charities through a combination of new legislative provisions and the retention of existing charities legislation, with updating, where appropriate.

The Bill makes provision in respect of a number of key issues. For the first time, a definition of “charitable purpose” is being included primary legislation. In addition, a new regulatory authority to secure compliance by charities with their legal obligations and also to encourage better administration of charities will be established and a register of charities with which all charities operating in the State must register will be set up. The Bill will minimise also the administrative burden placed on charities where possible. I welcome this development because [443]those involved with charities often give their services voluntarily and are not paid for their efforts.

The Bill provides for the establishment of a charity appeals tribunal, the dissolution of the Commissioners of Charitable Donations and Bequests for Ireland upon the establishment of the new regulatory authority and the transfer at that stage of its functions to the authority. All jurisdictions previously vested in the Attorney General by statute or common law in respect of charities will be transferred to the new authority. As a result, clarity will be provided for many charitable organisations and registered charities.

I am sure that, like me, other Members received representations welcoming the legislation. However, issues that could also be described as matters of concern have also been raised. We take on board people’s concerns. In my opinion, the Bill gives the concept of charitable status a new meaning. For the first time, the phrase “charitable purposes” will be fully defined in primary legislation as follows: the prevention or relief of poverty or economic hardship; the advancement of education; the advancement of religion; and any other purpose that is of benefit to the community. The term “any other purpose” refers to the advancement of community welfare, including the relief of those in need by reason of youth, age, ill health or disability; the advancement of community development, including rural or urban regeneration; the promotion of civic responsibility or voluntary work in the community; the advancement of conflict resolution or reconciliation; the promotion of religious or racial harmony and harmonious community relations; the protection of the natural environment; the advancement of environmental sustainability; the efficient and effective use of the property of charitable organisations; the prevention or relief of the suffering of animals; the advancement of the arts, culture, heritage and sciences; and the integration of those who are disadvantaged and the promotion of their full participation in society.

A number of groups and organisations relayed concerns to Members about their activities not being covered under the legislation. In light of the wide range of matters in respect of which provision is made in the Bill, however, those concerns will be allayed.

As already stated, the Bill will minimise the administrative burden placed on charitable organisations. I welcome the initiative taken in this regard. The work of charitable organisations tends to be voluntary in nature and any reduction in or minimisation of their administrative burden is welcome.

The esteemed Senator Norris referred to sporting organisations. I am involved with many such organisations in the area of athletics, Gaelic games, etc., and they are close to my heart. As a director of the Donegal sports partnership, I am acutely aware of the need to afford protection to sporting organisations. Sporting bodies, as defined under the Taxes Consolidation Act 1997, are being excluded from being charitable bodies under the Bill. Their current status will not change and they will remain the subject of a separate tax exemption regime operated by the Revenue Commissioners. This will allow each sporting organisation to qualify, on merit, for tax exemption.

Senator Jerry Buttimer: Information on Jerry Buttimer  Zoom on Jerry Buttimer  That is a different point.

Senator Brian Ó Domhnaill: Information on Brian Ó Domhnaill  Zoom on Brian Ó Domhnaill  I support the legislation, which will bring clarity in respect of the charitable sector. I commend the Minister of State on his efforts and commitment in respect of this matter. I agree with the points made about the Bill by Senator Ó Murchú, my party’s spokesperson in the Seanad on community, rural and Gaeltacht affairs.

Senator Alex White: Information on Alex White  Zoom on Alex White  I welcome the Bill. As other Members said, it will introduce a regulatory regime which will serve the interests of the public and charities, and in that regard it is to be welcomed.

[444]I welcome the Minister of State, Deputy Curran, to the House in respect of his introduction of this important legislation. As acknowledged by other Members, we have a proud tradition of charitable donation in this country. Many of our charities fly the flag for Ireland, domestically and internationally. Organisations such as Trócaire, Concern and the Niall Mellon Trust have acted as ambassadors, attracting international admiration for the superb work they do in developing countries. Domestically, the Irish Cancer Society and the Society of St. Vincent de Paul are two examples of the breadth of charitable activity in our society.

Inevitably, we must reflect on the fact that, in the context of the latest round of cutbacks, many of which are essentially targeted at some of our most vulnerable citizens, our charities will be called upon more than ever to fill the gap in services that should be provided by Government. It is ironic that this Bill should come before us now. A proper regulatory regime is long overdue for many reasons, many of which have been outlined by my colleagues and, in fairness, the Minister of State.

It is unfortunate that there are those who exploit the goodwill of Irish people while posing as agents of charities when in reality they are bogus. This affects the credibility of genuine charities, in particular those that are not so well known but which do invaluable work in their field of endeavour. The Bill will go a long way to addressing this problem through the creation of the regulatory authority which will oversee compliance with the legislation. Central to this is the register of charities which will be maintained by the authority and open to the public to view, which is an important aspect of this legislation. The unique registration number for each charity, be they Irish or foreign but operating in Ireland, is one of the measures that will improve transparency. This is supported by the authority’s role in regulating fundraising activity by issuing permits and updating the regulations to account for modern collection methods. The authority will also promote good administration practice within charities and require them to keep proper accounts.

It is legitimate for the public to ask what is being done with the money collected by charities and if it can be better spent. Charities are not immune from the need to be efficient and transparent. The authority will have powers to investigate and sanction, where appropriate, those posing as charities. The regulation of trustees is an important provision. The proposed register of disqualified persons, which will be available to the public, is another measure that will foster confidence in the sector.

I note the authority will also have an advisory role, in particular with smaller charities that may struggle to meet their new obligations under this legislation. The appeals mechanism provided for in the Bill is an important counter-balance to the authority but we must ensure it is effective as an appeals body and is not simply a body that rubber-stamps the authority’s determinations.

I hope this Bill will be the first step in addressing the issue of charities paying VAT. Lack of a proper regulatory and registration regime for charities was a major impediment to this being achieved in the past. It is hoped also that following a suitable period during which the legislation will take effect, the Government will return to this matter. I welcome in particular the decision not to restrict the advocacy role of charities. This would have seriously hindered their effectiveness on the ground and as a force of civil society raising public consciousness about the many ills in our country and around the world.

I want now to raise a particular matter with the Minister of State. I am effectively reiterating what has been said by some of my colleagues, in particular, Senators Buttimer and Norris, namely, the inexplicable and as yet unexplained omission or deliberate exclusion by the Minister of human rights from the lengthy list, referred to a few moments ago by Senator Ó[445]Domhnaill, as purposes of benefit to the community. Senator Ó Domhnaill seemed to think that because that list includes some areas that might avail of human rights organisations, they should be assured by this. They cannot be assured by that. The Minister was asked during the debate on this Bill in the Dáil to include human rights as a sub-category and decided not to do so. Anyone who examines this legislation following enactment can only come to the conclusion that a deliberate attempt or positive decision was made by Government to exclude it. There is no point suggesting human rights fits into this somewhere between subsections (a) and (j) of section 3(8) . That is nonsensical. I say that with respect to my colleagues. Ultimately, it is not the case that one can find a place for human rights organisations, their having been directly and knowingly excluded by the Minister when this matter was dealt with in the Dáil. I hope the Minister will revisit this issue. There is no reason he should not do so.

The explanation that has been given is not satisfactory or convincing. I say that with respect to the Minister. The explanation given was that the Bill was seeking neither to narrow nor broaden the purposes that have emerged through case law down through the years. As Senator Norris pointed out, the Minister has added a particular category in terms of the inclusion of environmental organisations. It is not true to say that some categories of organisations have not been included by way of direct decision of the Minister. There is nothing that would prevent the Minister including human rights organisations or at least including human rights as a purpose. We are speaking not about listing organisations in legislation but about listing categories of activity, which is an important point. The organisations concerned are not lobbying politicians specifically in regard to their own organisations although they would benefit were such provision to be introduced. It is the wider principle that is important. It is a fundamental and important principle, as pointed out by other speakers.

A noteworthy article in today’s edition of The Irish Times relates to a speech made yesterday, in the context of the 60th anniversary of the Universal Declaration of Human Rights, by President McAleese who quite rightly pointed to the importance of strong laws and accessible mechanisms for the vindication of human rights and how important these elements are in ensuring a human rights culture. It is extraordinary that the Government should omit or, as I said, decide deliberately to exclude human rights as one of the categories under section 3(2) of the Bill. I ask that the Minister revisit this issue. I know he is a reasonable person and that he understands the arguments put to him. If he is not inclined to respond positively at the end of this debate perhaps he will do so on Committee Stage.

I reiterate, with respect to the Minister of State, that the explanation given so far is simply not convincing. I will not on this occasion go so far as Senator Norris but I will sit back and invite the Minister to give us an explanation that is persuasive and convincing. In the absence of such an explanation, I too would have to conclude that there is some other reason for excluding this area of activity from the Bill. What could it be? Of course, people are entitled to speculate as to what it might be.

In recent weeks a number of human rights organisations and organisations involved in related activity have been undermined. Some have been abolished by Government in the course of the past few weeks. Reference is often made to the human rights industry and to other pejorative type descriptions of organisations that are involved in this area. I do not for one minute attribute that to this Minister but it is the type of debate and argument that is taking place. It is not worthy of the Government to take this type of approach. I hope the decision made in the context of this Bill is not reflective of this type of attitude towards human rights and the promotion of human rights, so ably and eloquently upheld by the President of Ireland in her speech yesterday.

[446]On the objectives and purposes set out in the Bill, the Minister makes the point in his speech that the list of four draws on case law over many years and what are described as the Pemsel categories of charitable purposes, which as we all know go back a number of centuries to the beginning of the 17th century. I do not know if there was much of a premium in the early 17th century for human rights, but I doubt it. We have come a long way since. It is not convincing to suggest, as Senator Ó Domhnaill has — I am sure with the best will in the world — that the purpose of human rights is to be found in any of these subsections, the Minister of State having decided to exclude them.

It has been mentioned that the advancement of environmental sustainability has been included. One of the other purposes included in section 3(8)(j) is “the prevention or relief of suffering of animals”. I entirely agree with its inclusion. However, if we are prepared to include a purpose that relates to the prevention or relief of suffering of animals, people are entitled to ask why we cannot also include a category that relates to the prevention or relief of suffering of humans. That question requires to be answered.

Senator Dan Boyle: Information on Dan Boyle  Zoom on Dan Boyle  It is good to see a charities Bill finally working its way through the Houses of the Oireachtas. It has been a long time in gestation since the first treatment of the Bill was made available a number of years ago. It was promised over the course of several years. One can see by its length that there were many issues to be considered, some of which are still open for consideration. The Second Stage debate, as in the other House, is an important part of the process.

Since the original publication of the Bill, there have been several significant developments, one of which was the initial reluctance to include advocacy as an issue to be addressed. This comes from a particular official mindset, not necessarily a party political one, that charities should be seen and not heard. We have been very fortunate that many of our social services have been provided by charitable organisations in a way that the State has been unwilling to provide them. Even as we have grown more prosperous as a country, certain parts of our social services would collapse if it were not for the existence and actions of charitable organisations. The need for legislation of this type is obvious and it is very welcome. It fills a significant gap and will be the template for the development of further legislation.

There are ongoing concerns about particular charitable organisations, the raison d’être and objectives of which are not appropriately covered in the Bill. This has been mentioned in the context of human rights, in particular. My understanding of the concerns expressed — the Minister of State might allude to this — is that it is partly a question of drafting but mainly a matter of political concern about how to define organisations which exist for the promotion and enhancement of human rights and the extremely grey area between such organisations and openly political groupings. I am talking about party political groupings, in particular. How to legislate for this and provide a buffer is the essential issue. It should be possible to do this and we should be working towards making it possible. I have a sense that there are many in the Government who would like to see it happen. However, because there is this grey area as of now there is an unwillingness to go as far as we need to go. We still have an opportunity in the remaining Stages of the Bill to continue to examine that issue and ask the appropriate questions. I hope it can be done. If not, it will leave a significant area to which we will need to return in the very near future to amend appropriately. Human rights organisations represent an important part of charitable activity and without their existence the body politic would be weaker. We would not have properly informed debates, decision making and allocation of resources. We should recognise them in legislation and I would like to think we would do so, although I understand the political and drafting constraints.

[447]The other provisions that may follow the passage of the Charities Bill in both Houses of the Oireachtas relate to finances. While this is not a money Bill, for many years my party has argued that we should look at the Danish example of VAT exemptions for charities. Money that they collect from the general public tends to be eaten up by taxes returned to the State for goods and services provided largely on behalf of the State. There are mechanisms we can and should consider which have been given favourable consideration. In the course of the budget debate the Minister for Finance indicated he was willing to do this. Possibly in next year’s budget and Finance Bill we will have such a mechanism.

Attention should be drawn to the concerns raised by the free legal advice centres about the liability that accrues to directors in a situation where State assistance and funding to such organisations is subject to immediate review and reduction. If the State has been supplying funding to voluntary organisations, they may have made decisions on this basis. The legal position of directors of charities taking on a liability they did not understand they would have in making their original decision is something we should review. It may be a matter of company law. However, the Bill, as comprehensive and welcome as it is, fails to address these questions. While it is not addressed in the Bill, it is worth considering the vehicle applied in the United Kingdom, the protection of liability for many charitable organisations under the Companies Act or companies limited by guarantee. The United Kingdom produced a legal structure known as charitable incorporated organisations. It seems to be a more specific legal entity that is more representative of the work done by charitable bodies. If we could examine such a structure in the context of a companies Bill, we would further ease the lot of charities.

As we seek to complete the processes involved in the Charities Bill, many organisations consider they might not be properly represented by its provisions. We have received representations from sports and religious bodies. On the whole, other than the question of human rights which may remain unanswered on the final passage of the Bill, we have the right balance. The religious organisations will be subject to a particular review. I understand sports bodies are dealt with elsewhere. As sports can be both amateur in their nature and have a significant professional money-making aspect, they should not be considered in legislation of this type. It is right to make that distinction.

We need to use the remaining time in the Seanad to answer the points and concerns raised by most speakers. A significant unanswered question has been raised by Senators Buttimer, Ó Murchú, Norris and Alex White. I refer to the fact that we, as public representatives representing our political interests, recognise that there are charitable organisations and voluntary groups which represent particular interests in the field of social justice and human rights which need to have their interests reflected in the legislation. If there are political, administrative and legal constraints, it may be that the issue will remain unresolved after the passage of the Bill. However, it cannot remain so for long. I hope it can be dealt with in the remaining Stages of the Bill. However, there is a near certainty that if the Bill is passed without addressing these concerns, we will return to it sooner rather than later. For such comprehensive and necessary legislation, it is not right that this one remaining question should be left unanswered, particularly in this climate where there are question marks over commitments to human rights in general within our ever-evolving society. It is not right that we as a Seanad, and particularly the Government, should leave those questions unanswered.

Senator Paul Coghlan: Information on Paul Coghlan  Zoom on Paul Coghlan  I welcome the Minister of State to the House and thank him for being present to take this Bill, which, in general, I welcome.

I will not delay the Minister of State or the House in making my contribution. I know the Minister of State is an open and fair-minded person. I know how he deals with bodies and have seen him in action. I have only one plea to make to him, namely, that sports organisations [448]be permitted to be part of the new charities regime as proposed in the Bill. That is my one plea to him. That is the reason I requested time to say a few words on this matter.

As we know, and as was referred to, sports organisations are currently specifically excluded, as the Bill is drafted. Bodies established and existing for the sole purpose of promoting athletic or amateur games or sports are specifically excluded. The Minister of State will know, as we all do, how important to the life and health of the nation are all our sports bodies and activities and the wonderful work that is being done. The Federation of Irish Sports and all the bodies it represents, including the Golfing Union of Ireland, seven members of which are present in the Gallery, strongly made the point that sport has a key role to play in the promotion of health and the prevention of disease in Irish society. Research by the ESRI and others has found that participants in physical activity are the equivalent of 14 years younger in health terms. I only wish I was better at sport. The Minister of State will understand the point I am making.

Sport is a primary vehicle for active citizenship and volunteerism in Irish society, with an estimated 15% of the adult population of Ireland volunteering for sporting activity in the course of each year. This has been recognised in the report of the task force on active citizenship. Sport advances community welfare and development. That is recognised in the National Development Plan 2007-2013, which acknowledges the importance of sport to the social infrastructure. Page 222 of that document states: “Participation in sport, whether at the level of competitive sport, recreational sport or active leisure activity can yield physical and psychological well-being as well as fostering social development both in terms of the individual and the community.” It goes on to recognise the role of sport in building stronger communities. We all know that is true in our communities, whether through the input of the GAA or soccer, rugby or golf clubs and so on.

Obtaining charitable status for sporting organisations is vital. I am sure the Minister of State has received representations from the various sports. The designation of such status is vital to sporting organisations because failure to allow it will prevent sporting organisations — the vast majority of which operate with limited financial resources and are heavily reliant on Government funding for grants, administered by the Irish Sports Council — from accessing various fundraising streams, including philanthropy, legacy giving, charitable bequests and so on. Not granting sporting organisations such status will also exclude them from many soft benefits associated with charitable status, including eligibility for grants and corporate social responsibility programmes. Furthermore, it will deny sporting organisations the legitimacy that will derive from the improved regulatory regime laid out in this Bill in regard to charitable organisations.

I do not want to repeat what I have said, but such a measure is one that all of us, including the Minister of State, consider vital. I greatly look forward to the Minister of State’s response. Perhaps on Committee Stage he will be able to facilitate this request by the insertion of an appropriate amendment. I believe in his own heart and mind he would agree that such a measure would be worthwhile. It would be good not only for the sporting organisations but for the life and health of all communities throughout the country. I believe I can trust in what the Minister of State will do. I hope he will give this matter favourable consideration.

Senator Terry Leyden: Information on Terry Leyden  Zoom on Terry Leyden  I welcome the Minister of State to the House and commend him on bringing forward this Bill. Debate on the subject of this Bill has been ongoing for the past ten years and this Bill is the culmination of that debate. It is not before time that it has been introduced. Approximately 7,000 organisations have charitable status and that number is increasing. A vast amount of money, in the region of €2 billion, is collected for charities annu[449]ally. It is imperative that all charitable organisations are properly registered and that the funds collected are given to the charities named in the collections, but that does not always happen. It has been a practice for some time for some organisations to give lucrative percentages to collectors on behalf of the organisations. An extreme example of this came to my attention some years ago. Collectors were giving 70% of the money collected to an organisation. Those involved used the names of people suffering from an ailment in an area as collecters went to each house explaining that the money collected would assist in funding research into the ailment concerned. I exposed that practice at health board level and thereby prevented that type of abuse in the system.

I established the Kosovo Refugee Aid in 1999, which obtained charitable status. I take this opportunity to commend all those who participated in that charity, which is still registered. None of the volunteers, the secretary, chairperson and others who worked for that charity, received a euro in expenses. All the money collected was ploughed back into providing assistance to the people of Kosovo at that time and in assisting people from Kosovo who came to Ireland. That was the objective underpinning that charity and I know the procedures that were involved.

I would like the Minister of State to elaborate on the request made by Senator Coghlan concerning sports organisations. I know from the Minister of State’s involvement in his constituency that he was one of the leading lights in an organisation there. I know that if it is possible that this Bill could allow for the registration of sports organisations as charitable organisations, which effectively they are, he will be prepared to consider that request. This is significant legislation. Far too often in every town and village throughout this country people make collections for organisations and members of the public do not know what they are about. These organisations can say they represent the disabled or former polio sufferers and impress on people to contribute to the charity concerned. Irish people are very generous. Collectors for such organisations position themselves outside the post office on a Friday when people go there to collect their pensions and invariably the organisation for which they are collecting is not based in that locality. The people collecting for organisations based elsewhere and people generally do not ask the collector for the permit number, which they are entitled to do to determine whether the charity is legitimate and the money will be given to the cause it purports to represent.

There is also an issue concerning church gate collections, which the Minister of State will have to resolve. It concerns all political parties, which are allowed to collect funds on certain days in the year. That is done by volunteers collecting for voluntary organisations, which is fair enough. A reasonable approach must be taken and rules must be brought in to cover those dates. Where permits are given for church gate collections, organisations should not exploit their membership by trying to extract more money from people. I refer, for example, to a collection for an organisation representing people with disabilities where a disabled person is present at the collection. That is not necessarily required but I have come across cases where disabled people were out in poor weather. I do not know whether they were volunteers or whether they were requested to appear at collection points to extract the maximum amount of money in donations.

The Bill is comprehensive and well researched. A large number of submissions were received from organisations throughout the country. The general consensus is that the Bill has been well received. Charitable organisations know there is a need to tighten up the regulations and bring about a more rational approach to charities, which is what the Minister has achieved in the Bill. I read through many sections of the legislation and it appears to be workable and comprehensive. I expect the Bill will be passed as quickly as possible.

[450]Members of local authorities are excluded from membership of the charities regulatory authority, as are all elected representatives, Members of the Seanad, Dáil and the European Parliament. All elected representatives who were appointed to the authority prior to their election or selection will have to step down from their positions. There is a tendency in Bills currently to exclude public representatives. Others who are excluded from membership of the authority include those who have been bankrupt or who have committed offences. Section 3(3)(c) and (e) and (f) of Schedule 1 refer to a person who “is convicted of any indictable offence in relation to a charitable organisation or charitable trust”, or who “is convicted of an offence involving fraud or dishonesty, whether in connection with a company or not”, or who “is sentenced by a court of competent jurisdiction to a term of imprisonment”.

Public representatives are included in the group of people who are excluded from membership of the authority. That is a civil servant approach, with all due respect to the officials concerned. They are taking this approach in every Bill. We allowed Members of this House to be on the board of the Personal Injuries Assessment Board. The vice chairman of the board is a Member of this House and he is providing a good service. There is no reason to exclude any category of person. Irish citizens with a right to vote should have a right to be a member of the authority. A councillor should not be a member of the authority by right but he or she should not be excluded on the basis of his or her elected position. That is undemocratic. It is a serious reflection on the integrity, capacity and ability of people elected to public office.

I have no objection to being excluded as a Member of the Oireachtas as we have enough responsibilities as full-time public representatives. The same is true of Members of the Lower House. However, I do not think Members of the Oireachtas per se should be excluded. There is no reason a Senator who has a proven track record in charitable organisations should not serve well and be a conduit for an organisation to the Oireachtas.

The Minister of State was previously in the Whips’ office and he knows the situation. At a meeting of the Fianna Fáil parliamentary party we agreed a motion that each Minister would scrutinise legislation to ensure this provision was not included. As someone who has served in his area with councillors, the Minister of State is aware of how hard they work for many organisations. They should not be excluded from membership of the authority.

Senator Jerry Buttimer: Information on Jerry Buttimer  Zoom on Jerry Buttimer  Will Senator Leyden vote against the Bill?

Senator Terry Leyden: Information on Terry Leyden  Zoom on Terry Leyden  It is a question of persuading a Minister. We, on this side of the House have dialogue with Ministers and we can make representations to him or her.

Senator Jerry Buttimer: Information on Jerry Buttimer  Zoom on Jerry Buttimer  Senator Leyden did not do it so far.

Senator Terry Leyden: Information on Terry Leyden  Zoom on Terry Leyden  We can go to our parliamentary party. The Minister will listen to questions put by this side of the House when they are well argued and reasoned.

An Leas-Chathaoirleach: Information on Paddy Burke  Zoom on Paddy Burke  Senator Leyden’s time has almost expired.

Senator Jerry Buttimer: Information on Jerry Buttimer  Zoom on Jerry Buttimer  We tabled an amendment and Senator Leyden can support it.

Senator Terry Leyden: Information on Terry Leyden  Zoom on Terry Leyden  I know the Leas-Chathaoirleach would like me to go further in this regard. I intend to speak on the matter on Committee Stage. My personal experience of the Minister of State, Deputy Curran, is that he will not exclude the possibility of allowing councillors to be on the authority. That does not mean they have to be selected as members of the authority or that there has to be a quota of councillors or anybody else on the board.

[451]I commend the fact that there is a requirement to have gender balance on the board. Any board without a 50% representation of both sexes is not in accordance with the ethos of this House. There should be a fair representation of both sexes on the board. I commend the Minister of State who is a new, young Minister. He will be remembered for all time in this House and outside it for this excellent legislation.

Senator Jerry Buttimer: Information on Jerry Buttimer  Zoom on Jerry Buttimer  We will table the amendment. Will Senator Leyden support it on Committee Stage?

Senator Ivana Bacik: Information on Ivana Bacik  Zoom on Ivana Bacik  I wish to share time with Senator Quinn.

An Leas-Chathaoirleach: Information on Paddy Burke  Zoom on Paddy Burke  Is that agreed? Agreed.

Senator Ivana Bacik: Information on Ivana Bacik  Zoom on Ivana Bacik  I broadly welcome the Bill because the regulation of the charitable sector is long overdue. The legislation has been some years in preparation and I am delighted to see it. Like other Members I urge the Minister of State to take on board one point: to extend the definition of charitable purposes to include a charitable purpose that is beneficial to the community, namely, the advancement of human rights, as in the English legislation and the Scottish equivalent. I do not believe section 40 covers the situation. I accept the Minister has taken the view that charities that currently are recognised by the Revenue will be deemed to be charities for that purpose. I agree that will cover some charities that advance human rights. Clearly that is so, but it is not enough because there may be other charities that apply in future whose primary purpose is the protection or advancement of human rights. I urge the Minister to consider amending section 3(10)(e). An amendment to that effect may be tabled on Committee Stage but I urge the Minister to amend the section to include the purpose of the advancement of human rights.

Senator Feargal Quinn: Information on Fergal Quinn  Zoom on Fergal Quinn  I thank Senator Bacik. One of the points I was going to make related to human rights and now that Senator Bacik has done so, it takes the onus off me. I welcome the Minister of State, Deputy Curran, and the Bill. We should have had it a long time ago.

Over the years, when confronted by a big bucket or box, I never knew how many cent from the €1 euro donated would go to the charity. When I was a member of a charity board I began to ask how much of the contributions given went to the charity. I found I was no longer on the board the following year, so clearly I was asking the wrong questions.

I wish to make three points. I am especially concerned about section 485C of the Taxes Consolidation Act which puts a cap on tax relief given to charities. I can understand how that came about. I remember well when it became apparent that some wealthy people were not paying any tax. A Member of the Opposition said that was outrageous and the Minister resolved to sort out the issue, and he did. The trouble was that in closing all those other tax-efficient methods, for some reason or other he included philanthropy, in other words, the giving away of one’s money. That should not have been included. I am sure that was a mistake and it can be easily corrected. I suggest that to delete the cap on charitable donations would be at a small cost to the Exchequer and would be a considerable aid to the marginalised in society.

Section 485C of the Taxes Consolidation Act is a crude instrument that fails to differentiate between tax-driven incentives for infrastructure such as car parks and nursing homes, where the taxpayer acquires a beneficial asset, and philanthropic initiatives from which a donor receives no economic gain but rather personal fulfilment. I believe that measure was a mistake and it should not have been included, but I can understand how it came about. The clause suggests a poor awareness of how official Ireland could and should make much better use of the power of philanthropy. I have argued that point previously and I am not sure I am fully [452]understood. I do not believe it was the intention of the Minister for Finance at that time when he resolved to ensure wealthy people would pay some tax to include those who want to give their money away.

The other issue that has been mentioned is the scam of bogus pre-signed mass cards. The Minister of State has heard about that because the bishop has been in touch with us. I wish to highlight the massive scam of bogus mass cards for sale in shops throughout the country. The Bill should make it compulsory for shops that sell mass cards to display charity registration numbers and perhaps even contact numbers to halt the sale of bogus mass cards. I accept the matter has been discussed but I believe in a number of cases it was found that the mass cards on sale were questionable. One priest had been dead for two years and in another case a priest somewhere else in the world received approximately 12 cent from the sale of a mass card that retailed for €4. We clearly must do something to solve this problem. They are fraudulent cards and are very offensive to those who carry out the work of the church. They upset many people who believed they were doing the right thing and they hamper many generous efforts.

Additional wording should be inserted in the Bill so individuals will not be discouraged from becoming voluntary directors of a charity. The Bill holds directors liable for the failings of a charity in certain instances. This could have a detrimental effect on the charities sector and, in particular, may discourage one from becoming a voluntary director of a charity. Directors are liable where there is a withdrawal of previously agreed State funding and on the creation of any new legislation or regulations that would create additional costs for the charity when providing State-funded services. This seems like a very large burden on the voluntary directors of small charities and acts as a disincentive to those who would otherwise love to become a director of a charity. The following alternative wording has been suggested:

This would be fairer and would encourage people to become voluntary directors of a charity and not to be dissuaded due to the liability placed on them if the charity got into difficulty. This issue needs to be examined more closely by the Minister of State and I would welcome his doing so.

The point on sport has been already made. The Charities Bill, as currently drafted, specifically excludes “bodies established for and existing for the sole purpose of promoting athletic or amateur games or sports”. I imagine the Minister of State will claim this is already covered in separate sports measures that are operating effectively. This is not so because, under the Finance Act 2002, a very restrictive form of tax relief was introduced in respect of sports organisations. Tax relief is only available for donations made to certain sports bodies for the funding of capital projects that have ministerial approval. An absurdity arises whereby tax relief on donations is available in respect of a sports club that secures ministerial approval or designation in respect of the planned construction of a sports hall but, in that sports club and in respect of that same sports hall, tax relief is not available in respect of donations towards the engagement of a sports coach.

Sport has a key role in the promotion of health and the prevention of disease. It is a primary vehicle for active citizenship and volunteerism in the community and it advances community welfare and development. The National Development Plan 2007-2013 states, “Participation in sport, whether at the level of competitive sport, recreational sport or active leisure activity can [453]yield physical and psychological well-being as well as fostering social development both in terms of the individual and the community.” The national development plan recognises the role of sport in building stronger communities. I am sure the Minister of State will claim this is covered elsewhere but I do not believe so. The example I have outlined is but one example of an area in which we could go further.

The Bill, while it needs to be improved, is very worthy. I congratulate the Minister of State on his effort in introducing it. Let us ensure we perfect it and that it addresses all the loopholes such that the community as a whole can benefit.

Senator Cecilia Keaveney: Information on Cecilia Keaveney  Zoom on Cecilia Keaveney  This Bill has been a long time coming. Various community groups are watching its progress in the Houses and are awaiting the outcome with bated breath. Six or seven years ago, when I was Chairman of the Joint Committee on Arts, Sport, Tourism, Community, Rural and Gaeltacht Affairs, I was fast to advocate it. We explored this issue and spent some time not only working through what we should be doing but also examining what was occurring in other countries. One of the committee’s visits was to New Zealand, which had in that year introduced its legislation in this regard and established the role of chief executive or commissioner. The more we read up on the issue, the more we realised how difficult it was and how many people had problems they wanted addressed. This is the case in respect of human rights and sports bodies in different countries. When they were excluded, they sought to be included, and when they were included, they sought to be excluded. It depends on the regime that is introduced. Sometimes a regime can tie the organisations in knots administratively.

I am glad that the Minister of State’s legislation demonstrates an attempt to minimise, rather than maximise, the tying up of what are essentially volunteers with administration. Any body that has already qualified for charitable status will be automatically considered for registration. This is a very important step.

One section of the Bill states its provisions will not be commenced automatically when it is signed into law. Having watched the process in other countries, I realise it takes some time to bed down such legislation and to get it up and running. I welcome the Minister of State’s comment that a review will be mandatory in five years to determine what is working well. This is welcome regarding any legislation but this Bill in particular. Having explored the issue a few years ago, I understand it is never as clear as it seems to be. Everybody has his or her own view on it.

I spoke to the Minister of State previously about sports organisations. They feel that if they are not included, they will lose out in terms of tax incentives or supports. The Minister of State responded by saying there will not be an advantage or disadvantage and he will probably return to this matter when concluding.

Fundamentally, the legislation is desperately needed. As everyone has said, there is no oversight although €2 billion passes through the relevant organisations. While I do not want to refer to current controversies, I must state no organisation can operate as successfully when not being watched as it can when being watched. Sometimes, with regard to some of the very big organisations, money is spent on everything except what one believes it is for. It is important that this message be circulated. That one will be able to see in a book or on the Internet how much is being spent on administration and on the cause for which money was donated will allow one to contribute knowledgeably to charities that are spending money on what it should be spent on. This might seem like common sense but unless one sees the expenditure figures in black and white, one makes assumptions that the money one is donating will really make a difference. This is not necessarily occurring to the desired level and that is why this legislation is very important.

  [454]4 o’clock

Having said that makes me sound as if I am bashing the charities. I do not want to come across as doing so because, as I stated, a phenomenal amount of good work is being done. That some €2 billion is passing through the system means there are many people who value the voluntary work taking place in many sectors and in every community nationally. In this regard, one should consider the moneys made available to sports organisations that decided they wanted a new boxing club or pitch for soccer, Gaelic games or rugby. In speaking on this Bill I commend the trojan work done by a small number of volunteers and I encourage people to get involved in volunteering. If putting matters on a regulatory compliance framework yields more confidence in the system, more volunteers will be attracted to become involved in this important work.

On the issue of presumption of public benefit for religious charities, many people focused on a small abuse, namely, that of certain Mass cards. The last sentence of the Minister of State’s speech in that context stated that the provision should not affect existing religious charities which will be deemed automatically to be registered. That is important and it is the usual situation. One does not want the one or two concerns that do things the wrong way to ruin it for everyone else. It is important that there be regulations and compliance but we must not have a situation where everyone is penalised for the misdeeds of the few.

I already alluded to the issue of reconsideration within five years. I am very pleased that under section 14 the authority has been declared to be an independent body that will have strong regulatory powers. However, the Minister of State rushed on to say that this was not to be understood as a matter merely of the big stick and that it included being supportive of charities, of public confidence and of the interaction between them. Transparency speaks for itself because the register will supply that. I am reminded of the fishing industry where the regulatory authority comes into play and it seems to be all big stick and no carrot. That is a tremendously important role.

I thought the Minister of State’s speech was exceptional in that there were so many such caveats. He stated he was willing to listen, that he could return and check that everything was going well and, if it were not, that he would deal with it. That should give great confidence to all 7,000 organisations currently operational. I wish the Minister of State well with the development of this Bill.

We have put forward clarifications in respect of sporting bodies. In some countries these have been clamouring to get in and in others they are clamouring to be kept out of such regulation. My view is that paper filing should be kept to a minimum and this will then be an important stride forward for the volunteers of the country.

Senator Joe O’Toole: Information on Joe John O'Toole  Zoom on Joe John O'Toole  I welcome the Minister of State. It is the first time that we have faced each other in this House but we have dealt with one another in many other situations and I wish him well in the continuation of his Ministry.

Like everyone else, I welcome this legislation. Much fine work has been done in the background by the Minister of State’s advisers. Many of the matters raised by the different groups I deal with have been touched on by Senator Keaveney and others. I do not wish to rehearse much of what has been said before but I want to state a few things for the record.

First, on a general basis, the issue of meeting a charity collector on the street must be considered. The simple view I have held all along is that when a person is collecting at street level, the requirement must be that we know exactly where our money is going. Many charities employ people to raise funds and in that situation only a small percentage gets to the objective. In other words, one hands over a euro and only 25 cent reaches the target charity. I recognise [455]why this happens. There are administrative costs and all manner of other difficulties, but there is an easy way of dealing with this matter. Other groups go out collecting and every penny they get goes straight back into the charity with no one getting commission. I do not object to commission but I object to not knowing about it.

An easy way to manage the situation would be to have charity buckets or tickets bearing a figure that would range between zero and 100. That number would refer to the percentage of contribution that will go to the charity. The simple requirement is that the charity must indicate this percentage. This would be confirmed and dealt with each year in the auditor’s report. It is not difficult to implement. If I were to see someone with 90 written on a bucket I would know that my 90 cent is going to go to the charity, with only ten cent going in commission to the person out there on a cold Saturday collecting or selling tickets. I know people shy away from such an action. However, that is the way things are going, especially with audited charities. Most small charities give 100% and do not keep anything for themselves, for example, a local football club selling tickets. I ask the Minister of State to bear this in mind and deal with it.

In light of where we are going as a society and as a community, many arguments have been put forward for organisations promoting equality and social justice to be included in the Bill’s terms of reference. I do not know what the Minister of State’s views are on that and where he stands after the Bill has gone through the Dáil. This is a defining characteristic of our society. I, Senator Labhrás Ó Murchú and others raise issues of social justice. These are fine charities, that is, if they are charities. Not all organisations promoting social justice are charities and it must be made clear when they are. I ask the Minister of State to consider that.

Another issue concerns defaulting directors. In the section concerning this it is made quite clear that directors cannot be held responsible when Government policy that previously supported the charity subsequently pulls the rug from under it. The charity then cannot meet commitments it had given on the basis of previous expectations. If people act irresponsibly or recklessly, that is a different matter and is covered in other legislation. I have no difficulty with that. Where people act genuinely, they should not be held responsible in such a situation.

I wish to discuss the issue of accountancy. I declare a conflict of interest here in that I am a member of the board of the Irish Auditing and Accounting Supervisory Authority and I chaired the audit review group on behalf of the Government some years ago. I have strong views on how the operation of auditing works and these are disinterested views. I have missives from the consultancy body of accountancy bodies in Ireland. I regularly would be on the other side of the table from these people and would differ from them in my views, so I am not merely picking up an issue here and running with it. I am looking at the concept of how auditors should work. I believe there are dangers here and I intend to put forward amendments to this.

The issue of a threshold is probably not a core accountancy issue but it is a political one. The threshold of a charity’s income goes up and down. It might be left a large sum, for instance. We should be able to reflect this in the legislation. That is an easy matter. However, having an auditor who is also a charity trustee is way off and utterly in conflict. The work of an auditor must be truly independent. He or she should not be a charity trustee. A trustee cannot be the recognised auditor. In certain situations people may be trustees who, in their day jobs, might happen to be auditors. I am not talking about such situations but about the person who audits the charity’s books as required. That person cannot be also a trustee of the operation.

The Committee of Public Accounts, of which the Minister of State has had experience, is the oracle in this regard. When it dealt with offshore bank accounts in 2000, its report determined that auditors should be untouched by the operation they audited. The committee, which was chaired by the late Deputy Jim Mitchell and included as members Deputies Pat Rabbitte, Ned O’Keeffe and others from Fianna Fáil, was vehement on this issue. It would not accept [456]even Chinese walls of difference but wanted clear blue water between the operation of the auditor and what was happening on the board. The requirement was for an independent auditor. Perhaps the Minister of State has issues in respect of this matter or perhaps he takes a different interpretation. Having spent considerable time examining the issue of holding hearings in public or private, I concur with the view that they should be held in public. In the interests of fairness, however, the charities regulatory authority should be given the discretion to allow hearings to be held in private at times. The Irish Auditing and Supervisory Authority, IASA, conducts investigations on this basis under the Companies (Auditing and Accounting) Act 2003. This approach should be mirrored in the Bill before us.

The reason IASA has an option to have private hearings is that an auditor who comes under investigation in a public hearing may as well close up shop. While this is fine if he or she is ultimately found guilty, as the Minister of State will be aware, these cases proceed in a certain manner. Once allegations are made, it may take months before the matter is investigated and a conclusion reached. In the meantime, the reputation of the person subject to the allegation can be shredded. I raise this issue for reasons of fairness. I do not take a lily-livered or soft view of accountants and auditors who must be held to the highest possible standards.

Yesterday, I attended a meeting of a subgroup of the IASA board to discuss an issue. While I am not at liberty to discuss the details, the meeting focused on how we should protect the confidentiality of someone who is being investigated. It was our view that protecting confidentiality is as important as achieving the correct result. This contrasts with the view of the media that facts should be placed in the public domain and those involved allowed to argue their case. The possibility that individuals will be treated unfairly is a genuine one but if I am reading the provision wrong, I stand to be corrected.

I compliment the Minister of State and his officials on introducing this long-awaited and welcome legislation, on which there have been many dry runs. As the Minister of State will have noted, the issues I raise are minor. However, it is our role, as legislators, to try to tighten up legislation. I look forward to debating the Bill with the Minister of State who I am sure will correct me if I have leaned too far to one side. I hope he will be open to suggestions. If the Seanad makes a few amendments which necessitate re-introducing the Bill in the other House for a half an hour, it would not be a big deal. Let us make any changes that are required. I wish the Minister of State well and look forward to supporting the Bill.

Senator Paddy Burke: Information on Paddy Burke  Zoom on Paddy Burke  I welcome the Minister of State to the House and wish him well with the Bill. This is important legislation and I look forward to an excellent debate on Committee Stage. Senator O’Toole is correct that if it becomes necessary to return the Bill with amendments to the Dáil, it will be the better for it.

The charities sector needs to be placed on a proper footing. Senator O’Toole referred to the different types of people who collect money on the streets. In the case of those who collect for national organisations it is clear that the majority of the money collected does not go to the charities in question. On the other hand, in 90% of cases where local organisations such as boy scouts or soccer and GAA clubs collect funds, 100% of the money collected goes to the local club. It would be foolhardy to attempt to remove the right of such clubs and groups to collect funds. Another example of significant funds being raised for worthy causes is the Daffodil Day collections. Many sporting organisations depend on the money they raise on flag days and in the majority of such cases all moneys raised go to the relevant organisations. The proposed provision should be amended on Committee Stage to improve the legislation.

On the composition of the charities regulatory authority, I am disappointed that it has been decided to preclude members of local authorities from membership of the board. Many of the [457]1,500 or 1,600 local authority members were elected on the basis of a reputation they had acquired for working and fund-raising on behalf of charitable organisations. The main burden for most charitable organisations is raising funds. It is regrettable, therefore, that persons who have acquired vast experience in this area and have been elected to a local authority should be precluded from membership of the board. I ask the Minister of State to reconsider this provision prior to Committee Stage.

Members of the Garda Síochána have played a major role over the years in approving collections by charitable organisations and other bodies. It is regrettable, therefore, that they are also precluded from membership of the board. I ask the Minister of State to consider appointing a member of the force to the board. While this may not have been done previously, the Garda Síochána has significant expertise in this area and gardaí who know the various charitable organisations inside out could bring considerable experience to the charities regulatory authority. I wish the Minister of State well with the Bill, which is overdue.

Minister of State at the Department of Community, Rural and Gaeltacht Affairs (Deputy John Curran): Information on John Curran  Zoom on John Curran  I thank Senators for their contributions to the debate. While I propose to comment on some of the issues raised, I will reflect on several other matters which were raised for the first time during this debate. Since my appointment about six months ago, the Charities Bill 2007 has been the only legislation with which I have had to deal. I do not know if many Ministers of State are landed with the task of dealing with a Bill.

One of the first steps I took on taking office was to consult the political parties and those involved in the charities sector. It quickly emerged that the purpose of the legislation was to try to organise the charity sector. More than 7,000 charities are registered with the Revenue Commissioners and while tax procedures are in place, control and transparency are lacking. This could undermine the work of charitable organisations as they need to enjoy public confidence. I recognise that not every aspect of the charities sector will be covered but this is a complex and substantial Bill, which includes a mandatory provision that a review will be undertaken within five years. Given how long ago earlier legislation underpinning charitable work was enacted, it will be important to have a timely review of the Bill and a clear undertaking has been made in this regard.

I will respond to some, albeit not all, of the issues raised as I expect some of the points will be debated in detail on Committee Stage. Senator Quinn, who is no longer present, referred to philanthropy and the Finance Act. While the issues raised by the Senator are not directly relevant to the Bill before us, they impact on the entire charitable sector and, as such, I will raise them separately with the Minister for Finance. I will examine in detail the points raised by Senator O’Toole regarding accounting, auditing and so forth.

A number of issues were raised by numerous Senators. Senator Buttimer, being first to contribute, probably touched on most of them, as did many of the other contributors during the course of the day. An article in The Irish Times yesterday referred to charity trustees and their personal liability. I am aware that this has been an issue. I want to clarify that the Charities Bill does not make charity trustees personally liable for losses accruing to their charity. The actual legal position is that charity trustees are already personally liable for such losses, whether this is generally known, and I believe that is unfair. A few weeks ago on Report Stage in the Dáil, we introduced section 89, a new section to the Bill, which allows charities to take out insurance to indemnify the trustee from any personal liability in respect of any act done, or omitted to be done, by him or her in good faith. That is a new indemnity provision, which does not exist at the moment, specifically to address the issue that was raised in the newspaper yesterday. People might not have noticed this as it was introduced on Report Stage rather than [458]earlier. However, it was done specifically because we felt the situation was unfair. It is important to note that.

Senator Ó Murchú raised the issue of whether the Bill would make it mandatory for charities to take out indemnification insurance to protect trustees. This is an enabling provision so it will be a matter for individual charities and the trustees themselves. It will not be obligatory.

Numerous Senators raised the issue of human rights. This is a matter which had been discussed in both Houses long before I took over responsibility for the Charities Bill. I am conscious that the definition of “charitable purposes” in section 38 has been of considerable interest to the sector and to Members of both Houses, particularly as regards human rights. At the outset, when I was making my introduction, I said that it was important to note that in enshrining these charitable purposes into primary legislation for the first time, the Bill is seeking neither to narrow nor broaden the purposes that have emerged through case law over the years. That is the setting in which we were trying to frame the Bill.

Charitable purposes, in section 3 of the Bill, mirrors those changes that have developed in common law over many years and have been used by Revenue in considering eligibility for tax exemptions. As I said, the Bill is neither seeking to dilute nor expand these charitable purposes. While the Bill does not use the expression “human rights” and it is not expressly mentioned, several of the other purposes of benefit to the community are closely linked to the promotion of human rights. Senator Alex White, for example, made the point that one of the specifics is the prevention of the relief of suffering in animals. However, I believe he was slightly unfair to do that. Had he gone back to an earlier subsection, he would have seen that it related to prevention of human suffering. While the express term “human rights” may not be there, many of the issues are, such as the advancement of conflict resolution and reconciliation, the integration of those who are disadvantaged and the promotion of their full participation in society.

Senator Joe O’Toole: Information on Joe John O'Toole  Zoom on Joe John O'Toole  Does the Minister of State believe that this encompasses human rights?

Deputy John Curran: Information on John Curran  Zoom on John Curran  Before finalising on that, another point is that the organisations in this jurisdiction which are engaged in human rights activities and which are currently registered with Revenue will be deemed to automatically come within the remit of this legislation. As I said, the Revenue Commissioners do not recognise human rights per se. It is a question of trying to match terms that are consistent with each other. However, the principles and effects are clearly identifiable and this is something that will probably come up for greater debate on Committee Stage.

A number of speakers, in particular Senators Buttimer and Keaveney, raised the issue of the authority being a regulator and support for the sector. The position being adopted in the Bill is that the authority will have both a regulatory and a supportive role, and that is important. Senator Keaveney referred to the regulator with the big stick, but it is important that the authority is seen to be a supportive agency. I do not agree that the roles are mutually incompatible. Indeed, it is quite common for regulators to perform both roles and that is appropriate.

Senator Boyle said there are no new legal structures for charities. It has always been the position that the matter of legal structures for charities does not constitute the purpose of this legislation, which is to regulate the charity sector for the first time since the foundation of the State. The Government wishes to ensure the accountability of the charity sector and to protect against the abuse of charitable status and fraud, and that is the commitment on which the Charities Bill will deliver.

[459]Senator Ó Murchú in particular referred to the whole issue of holding out. This came about because of door to door collections, notices coming in, the collection of clothing and so forth, which we have all seen. Section 46 of the Bill makes it an offence for charitable organisations that are not registered to hold themselves out as charities. On Report Stage in the Dáil I strengthened the provision, with a particular focus on the door to door collection of second-hand clothes and bric-à-brac which was a cause of genuine concern. It was raised time and again. I have received numerous complaints from the public in relation to those collections.

I made it an offence to cause the public to reasonably believe that an organisation is a charity, irrespective of the terminology it uses in leaflets etc. This amendment strengthened the provision and greatly limited the scope for non-charitable organisations to suggest to the public that they are charitable in nature. This will, in turn, help the public to distinguish between genuine charitable organisations and non-charitable bodies. Prior to the amendment, such bodies would have been outside the regulations had they omitted to use the word “charity” and so forth. They now only have to give the impression or behave or act in a manner that the public might reasonably expect of a charitable organisation. That is aimed primarily at dealing with the door to door collection phenomenon.

The need for transparency was raised by Senator Ó Murchú and others in terms of the spend by charities on administrative and running costs. Increased transparency is a fundamental principle of the Bill. It must be recognised that there are administrative costs in running a charity, but the transparency issue is very important. There may be very valid reasons that one charity’s administrative costs are higher than another’s. However, with the register and the availability of accounts, people will make more informed decisions because that information will be more publicly available, and that is significant.

Numerous Senators referred to sporting bodies and talked about the importance of sport. I recognise that, and I have been involved with a number of sporting organisations for a long time, which I actively support. This has been mentioned to me and I have given it some thought. I want to point out a couple of things. The Revenue Commissioners operate a separate tax regime for sporting bodies from that applicable to charities and the Bill has been drafted to maintain the status quo. The legislation makes a clear separation between the determination of charitable status by the authority and the determination of tax exemption on funds applied for charitable purposes, which is exclusively the function and responsibility of the Revenue Commissioners. The intention is that there will be a seamless system with no duplication. The charities regulator decides whether a body is a charitable organisation, but it will solely be a matter for the Revenue Commissioners to determine whether any funds applied by such an organisation for a charitable purpose should be granted entitlement to tax exemption.

In the public consultation process relating to this issue, namely, sporting bodies attracting charitable status, it did not emerge as a matter of concern to any great extent. Regulation of sporting bodies as charities would impose additional regulation and scrutiny on those organisations. I do not believe that considering the inclusion of sporting bodies as charities on the principal basis that a particular advantage might accrue under the taxation system is a very sound rationale, particularly when the Revenue Commissioners alone have responsibility for granting tax exemptions, regardless of the decisions of the charities regulatory authority.

That is the key point. The argument put forward to have sporting bodies included is specifically that a tax benefit would accrue to such organisations, but that simply would not be the case. It is important to emphasise that the Revenue Commissioners still maintain their independence in that determination.

Senator Buttimer raised the issue of supports for the sector and there is acceptance in Towards 2016 that support will be required for charities to meet their obligations in the new [460]regulatory environment. Towards 2016 provides that modalities of support will be decided following consultation with the community and voluntary sector after the legislation is approved by the Oireachtas.

Senator Norris referred to what we call “chugging” and the proliferation of charities collecting together to obtain promises of money. Collections or promises of money represent a very important source of regular income for charities and allows them to plan their activities in a more strategic way. Until now they have been outside the scope of the permit system and that was unacceptable. It is an important issue and will be subject to a legal permit regime for the first time.

I am also developing, with the sector, non-statutory codes of practice for charity fund-raising which should help to improve collection and ensure the public is not impeded with many collections taking place at the same time. If non-statutory codes of practice do not work, I have a reserve power under section 94 to introduce statutory regulation. It is worth mentioning that while we are looking for transparency and control and to have confidence in the charity sector, the counterbalance is not to over-burden and over-regulate charitable organisations, make their work more difficult than it needs to be and take away from their primary function. If the sector is prepared to implement satisfactory non-statutory codes, I am happy with that, but there is a reserve function.

Provisions regarding the appointment of the authority were raised by Senators Buttimer, Leyden and Burke. The provisions in the Bill are standard and were inserted on the basis of legal advice. There is provision for representation from the sector, specifically persons with knowledge and expertise of law on charities, the keeping of accounts, and the funding and management of charities. Such representation would be the key to the successful operation of the Bill. The legislation also provides for an extensive consultative process between the authority and the sector through the various consultative panels. This should allow the concerns of the sector to be taken fully into consideration.

The issue of pre-signed mass cards was raised prior to this debate and I am aware that it is a matter of concern to the church and Members of both Houses. I am taking legal advice on whether it is possible to make provision in the Charities Bill to control the practice of selling pre-signed mass cards in retail outlets. The previous clause I referred to of holding out would also apply in that if someone was selling a mass card on the false pretence that it was for a charitable purpose, it would be an illegal activity.I gave a commitment to Deputy Michael Ring that I would examine the issue. Finding a form of wording that can be effective may be difficult but I am examining the issue, and if Senator Buttimer or others have words of wisdom, I ask them to share them because I want to try to address the issue.

Senators Ó Murchú, Buttimer and Norris raised the issue of sealed box collections. The first time this issue was brought to my attention was when I entered the Dáil to take Report Stage and I did not have much of an opportunity to deal with it. I am aware it is an issue but it only became known to me on that day.

The existing wording is intended to enhance public confidence but not to hamper the day-to-day operations of genuine charities. As I said at the outset, the Bill is not intended to change how charities operate or change the sector but to recognise what is happening and assist it by introducing a degree of control. I am aware many charities collect by selling what I call fixed-price emblems, badges or tokens, and I appreciate that. My officials are engaging with legal advisers on how we might deal with this, but we do not want to undermine confidence and return to open bucket collections. It is a question of obtaining an appropriate form of wording. I am anxious to address this matter because it is what happens with charities in the real world.

[461]If Senator Buttimer or Ó Murchú or any other Senators have specific ideas they wish to share with officials and see how robust they are, I would welcome them at as early a stage as possible because it is a practice that is in place and we are not introducing legislation to make existing practices more difficult. We must bring transparency, control and public confidence to what we are doing but we must not unduly burden the charities operating now or put their current funding streams in jeopardy. I will try to address it. I apologise I did not know about it sooner and if anyone in this House has any ideas, I will glad take them.

Notwithstanding that there are bound to be some differences on some of the approaches being taken, I have a positive sense from listening to the speakers today that the regulation of the charities sector in Ireland is broadly welcomed in this House. The Bill has emerged from an inclusive consultative process and consequently has improved as it progressed to publication and through the various Stages. I expect to table a number of amendments over the coming weeks and I look forward to working with the Members in this context. I put that on the record because if we table a number of amendments, the Bill will revisit the other House. Some people were concerned that there may not be any changes. I expect there may have to be a number of changes and it is better to be frank about it at this stage.

I came to this portfolio approximately six months ago. I put on the record of the House my appreciation of the work undertaken by my immediate predecessors in the Department, the Minister of State at the Department of Transport, Deputy Noel Ahern, who brought this long-awaited Bill to publication, and the Chief Whip and Minister of State, Deputy Pat Carey, who brought the Bill to Committee Stage in the Dáil. Their genuine commitment and recognition of the vital role charities play in our society and the need, therefore, to protect and value charities has been brought to us today.

In dealing with this Bill in the House, while not every amendment was agreed unanimously, there was widespread support for the general thrust of the legislation, there was a consensus approach and an openness and willingness to share ideas and work in a co-operative manner. The words shared in this House were encouraging and I am pleased to see that the Bill will continue. While we will not agree on every issue, I appreciate that Members of this House are prepared to work in co-operation to advance and improve the Bill as far as possible.

I mentioned Deputies Ring and Wall, and I want to put on the record that in the absence of Deputy Wall in the Lower House on one occasion, he was ably represented by Deputies Higgins and Lynch. Whether in the formal setting of the House or in informal consultations with me or officials from the Department, there was a willingness to see this legislation concluded because there is an understanding that it is important. Another aspect to remember is that there is a mandatory five-year review and during that time, we must ensure we examine how it is working. It is important and I am anxious to have it concluded, not just speedily but in an efficient and effective manner. I thank all those who contributed today.

Question put and agreed to.

An Cathaoirleach: Information on Pat Moylan  Zoom on Pat Moylan  When is it proposed to take Committee Stage?

Senator Labhrás Ó Murchú: Information on Labhrás Ó Murchú  Zoom on Labhrás Ó Murchú  On Tuesday, 2 December 2008.

Committee Stage ordered for Tuesday, 2 December 2008.

Sitting suspended at 4.40 p.m. and resumed at 5 p.m.


Last Updated: 06/09/2010 20:00:41 First Page Previous Page Page of 9 Next Page Last Page