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Not for Profit

Compliance Demands for Charities

Over the last number of years, one of the major challenges faced by all charities, community and voluntary organisations, has related to the increasing costs incurred in respect compliance and the lack of funding received specific to these costs. Whether the compliance obligations are required by funders, regulators or purely to ensure an increase in transparency to the public, there are many instances of duplication in reporting and information requests.

There have been many calls on the Government to act to reduce this duplication in reporting and information requests as well as the need to provide for the significant costs of compliance facing these bodies.

This reporting and regulatory burden is placing immense strain on the resources and morale of people in the sector seeking to deliver essential services. In a recent survey conducted by The Wheel, 83% of participants revealed that they are required to duplicate information to more than one statutory source. Further to this 86% of participants had no dedicated member of staff within their organisation to work on reporting and compliance requirements, so front line staff are required to divert time and resources into meetings these demands.

On November 12th this year the Charities Regulator published the Report into the Potential for a ‘Charity Passport’ Facility for Charity Data in Ireland, this report prepared by Indecon Economic Consultants notes that ““Complying with the reporting requirements of funding agencies represents a cost for many charities. This should be recognised as an integral part of the provision of services on behalf of the State, and some allowance for this cost should be considered in concluding funding agreements. There is international recognition of the necessity to ensure charities have adequate resources to meet such requirements. As a result, many funders internationally provide grants to cover such non-profit costs."

It also contains a number of key recommendations, including

  • A forum of Funders/Regulators be established to help coordinate reporting requirements, and identify areas where information requests could be streamlined
  • Funding agencies should consider including an allowance to cover the cost of reporting incurred by charities when making funding decisions.

The report confirms and highlights the burden of duplication in regulatory requirements identified by many charitable organisations and the charity sector for the last number of years. We also note the Report's recommendation that the Charities Regulator is considered best placed to lead efforts in implementing the report.