Voluntary code for charities will give rights to donors

17 April 2011

Charities will be expected to sign up to a new code of practice aimed at boosting transparency and bolstering public confidence.

The code, which has been developed by the coordinating body Irish Charities and Tax Research (ICTR), includes a new complaints and feedback procedure for the public and a monitoring body to ensure compliance.

The statement of guiding principles for fundraising provides Irish charities with good practice standards for the operational and administrative aspects of fundraising and will focus on improving transparency and accountability among charities.

It also includes a ‘‘donor’s charter’’, which creates a right to know about the causes for which a charity is fundraising and if its fundraisers are employees or agents.

‘‘A charity’s greatest asset is its reputation," said Sheila Nordon, executive director of Irish Charities and Tax Research.

‘‘The Irish give more to charities than many of their international counterparts, and open and honest fundraising is absolutely crucial to public trust."

The code of practice is voluntary but the body is hopeful that most of the 5,700 charities operating in Ireland will sign up to it.

It believes the successful implementation of the statement of guiding principles for fundraising will show the charity sector is capable of self-regulation and pre-empt any need for statutory regulation, which is possible in the Charities Act 2009.

Supported by the Department of Community, Equality and Gaeltacht Affairs, the document was developed after extensive consultation with industry experts and stakeholders, including charities, non-profit organisations, legal and financial advisors, donors and academics.

‘‘By its nature, fundraising is very dynamic and, with new types of initiatives constantly emerging, it has become very difficult to legislate," said Nordon.’ ‘For the first time ever, we will have a statutory definition of what constitutes a charity.

Charities who abuse their position will be investigated and reported to a monitoring group."

The code of practice covers all fundraising activities including door-to-door and street collections, telemarketing, direct mail, emergency appeals, internet donations, raffles, church-gate collections and bequests.

There are five key elements to the new code of practice:

Charities commit themselves to the highest standards of good practice and ensure fundraising activities are respectful, open and legal.
A donor charter will be introduced, which provides a ‘‘bill of rights’’ to donors, including their right to know about the causes for which the charity is fundraising, how their donation is being used and if the fundraisers are employees of the organisation or third party agents.
A complaints and feedback procedure will be set up to enable people to notify the organisation of their wishes, comments and complaints, with all feedback to receive a response within a specified timeframe.
A monitoring group will be established, with a majority of independent members and an independent chair to actively monitor compliance with the code.

The monitoring group will investigate complaints and take action with the charity as required.

Charities will produce an annual report and a statement of accounts, made publicly available every year. Some of Ireland’s top charities are prepared to adopt the new code.

Charities will have the opportunity to sign up to the code online, and the list of charities which sign up will be available publicly. The Irish Cancer Society, Focus Ireland, the Irish Hospice Foundation and Western Alzheimer’s are leading charities that are also part of the implementation group for the code of practice.

The seven-member monitoring group will be selected this month.

Charged with overseeing compliance with the code of practice, the monitoring group will consist of an independent chair, three independent members (two to be nominated by the Consumer Association of Ireland to represent the public, one with a professional accountancy or legal background), and two members from the charity sector (one to be nominated by Fundraising Ireland and one to be selected via an open application process for charities).

There will also be a member from the government department with responsibility for charities The monitoring group for the scheme is expected to be operational by June.

With an estimated €500million donated to Irish charities annually, Nordon said that the monitoring group would take an active role in regulation and she urged the public to avail of the complaints and feedback procedure.’ ‘We are conscious that it takes only one scandal and the whole sector will suffer," she said.

The guiding principles have been written in an easy-to-implement form to take into account the diverse range of charity organisations in Ireland, from small local voluntary fund raisers to fully staffed national organisations.

It will bring greater clarity to the industry and make it easier to quantify how much is donated to charities each year.

‘‘The guiding principles will play an important part in empowering donors by allowing them to ask questions of a charity and to have any complaints dealt with in a timely fashion," said Peter Cassells, chairman of the code of practice implementation group.’

‘The benefits for an organisation will be equally tangible - an increase in public confidence and trust, greater accountability and an enhanced reputation."