Irish charitable organisations say that while some proposed amendments to the Charities Act will deliver long-awaited legislative advances, others require “significant clarification or strengthening”.

Minister for Community Development, Integration and Charities, Joe O’Brien last week introduced the Charities Bill 2023 to the Dáil as “a key step that needs to be implemented to allow for the appropriate regulation, particularly financial regulation, of the sector”.

The proposed changes aim to provide “greater transparency for the public in relation to finances and operations of registered charities” with an “enhanced legal framework”.

The Bill also includes the establishment of “the advancement of human rights as a recognisable charitable purpose under Irish law”.

“The provisions contained in this Bill will ensure that we are striking the right balance between the regulations necessary within the charity sector and ensuring that these measures are proportionate to the size and operation of the charity,” commented Minister O’Brien.

In response to the announcement, a joint statement released by The Wheel and Charities Institute Ireland said the initiative “represents a welcome review 15 years after the adoption of the first legislation”.

The organisations praised certain proposals, including recognition of the advancement of human rights as a charitable purpose, and ensuring that company secretaries are not automatically classified as charity trustees.

“An increase in the audit threshold to €250,000 and clarifying that court-appointed trustees do not carry liability for matters preceding their appointment are common sense proposals in the area of governance,” added the statement.

However, Colette Bennett, director of Advocacy and Research at The Wheel, said: “While there are many positive aspects to this Bill, it does not address the strong potential for reputational and financial damage to charities from the current practice of publicising an investigation in advance of any findings being determined”.

She warned that it would also “allow charities to be de-registered for minor areas of non-compliance and this proposal is made more threatening by an inadequate appeals process”.

Áine Myler, CEO of Charities Institute Ireland (CII) added: “Regulation has been welcomed by our sector and works best when it’s proportionate. We are concerned that, in addition to the missed opportunity to address anomalies in the existing legislation, the Bill could have the effect of placing a sword of Damocles over both charity trustees and staff alike and may further serve to seriously distract from delivering on the charitable purpose.”

“The impact of the increased cost of legal, accounting and auditing compliance will add significant financial burdens, particularly impacting mid-size charities. In this regard, the absence in the Bill of any reference to compliance funding supports for charities is highly regrettable and policymakers need to address this funding gap. It will increase the strain on volunteer boards and the many charities reliant on few staff and a volunteering culture,” continued Ms Myler.

“It is vital that significant time be allowed to allow for comprehensive and fully balanced amendments to be put in place,” Ms Bennett advised.

The Wheel and CII have called for sufficient time to fully review the proposed new provisions and “the opportunity to present more detailed analysis, findings and proposals to the Committee at an early opportunity”.