Rushing the creation of a new regulator could rob not-for-profits in the Republic of Ireland of the carefully established regulatory body that they deserve.
The establishment of the Charities Regulatory Authority (CRA) is being fast-tracked in a bid to restore public trust in charities in response to public outcry over revelations of excessive payments to the departing Chief Executive of the Central Remedial Clinic. The Irish Department of Justice and Equality has announced plans to have key staff in place at a new regulatory body for not-for-profit organisations by February,
That the governments motivation for the hasty establishment of a new regulator has been prompted by the scandal is in no doubt with the Minister for Justice and Equality, Alan Shatter TD stating that “recent revelations about certain organisations in the charitable sector have understandably damaged public trust and confidence” and that the creation of the CRA “will provide the increased transparency and accountability that will allow this trust to be rebuilt.”
Learn from the failings of others
Charities Aid Foundation (CAF) has recently published guidance to governments on the regulation of not-for-profits that specifically warns against any rash or reactive interventions. Building Trust in Charitable Giving highlights international examples of regulators that have been brought into existence only to be wound up due to a lack of consensus about the make up, remit, regulatory powers and resourcing of the new regulator.
The report highlights the case of the Australian Charities and Not-for-Profit Commission (ACNC), which having only been in 2012, is facing the threat of closure after a change of government. The report also references the experience of New Zeeland, where the Charities Commission was abolished in 2011 just two years after being established should also be of interest for legislators in Ireland.
Published on the 20th of January as part of our Future World Giving project the report examines trends in government policy around the world to make recommendations on what governments should do to build confidence in not-for-profits. It highlights a tendency towards increasing complexity in regulation as public expectations and media scrutiny of not-for-profits rise in line with engagement in charitable activity.
Given that the Republic of Ireland are ranked 5th in the 2013 World Giving Index, charitable engagement is certainly high enough to warrant the creation of a dedicated charity regulator. But whilst it is understandable that both government officials and civil society representatives are eager to have a regulator in place as soon as possible to repair public trust, rushing the job may have just the opposite effect in the long run.
The need to establish consensus and commitment
Having put the legislation in place to create a not-for-profit regulator in the Charities Act 2009, the Irish government have been reluctant to move forward with establishing such a body. Some aspects of the Act such as the creation of a fundraising code of practice and the requirement for charities which are also limited companies to submit annual returns have been implemented. However, in 2012 Mr. Shatter conceded that it was not possible to proceed with the full implementation of the Act at this time “given the likely scale of the financial and staffing resources implied.”
Given that such concerns were sufficient to derail the creation of a regulator as recently as 2012 it stands to reason that there are people in government and in civil society who remain unconvinced that the 2009 proposals are needed, or fit for purpose. As such time should be taken to build widespread support to ensure that once the furore of recent scandals has passed, support for the CRA will continue.
Of specific concern is the impact that fast-tracking the recruiting process could have on the independence and legitimacy of the CRA. In order to have key staff in place by February the Department of Justice and Equality are reported to be seeking to recruit staff, including the CEO, from within the civil service. Critics have questioned whether such recruitment practices will give a new regulator the profile and authority it needs to able to credibly regulate a sector as diverse and complex as the not-for-profit sector. Equally, it remains to be seen whether candidates for the Board of the right quality and representativeness can be found before the deadline of Easter (April 20th) which has been set by government.
The people of the Republic of Ireland deserve a regulator that can create an environment in which the not-for-profit organisations which are so central to their thriving civil society, can earn back the nations trust. To rush the job and deliver anything less than that would be unforgivable.