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Latest News

News

In these uniquely challenging circumstances, how can accountants support non-profits? Patricia Quinn and Paula Nyland tell us that thoughtful and clear-eyed planning is needed to mitigate the challenges facing these organisations. Stories from the non-profit sector can paint a bleak picture of services threatened, vulnerable people at risk, fundraising decimated, and mature non-profit businesses facing unprecedented challenges to their viability. The emergency €40 million funding package provided by Government for the non-profit sector will go a ways towards buying some much-needed time, allowing these non-commercial businesses to take stock, regroup and renew their operations. If you look at the thousands of non-profits listed on Benefacts public website, you can see that the sector is highly diverse. At one end, there are heavily staffed health and social care service providers that derive most of their funding from the State in exchange for providing essential services. At the other end, there are thousands of small, local associations and clubs that rely mostly on donations and volunteer effort. These are uniquely challenging circumstances for non-profits and accountants have an important role to play in supporting them – whether as professional advisors or as voluntary Board members. As analysts of sector data, these are the kinds of situations Benefacts has encountered: Dependency on fundraising and donations is high, with almost €0.9 billion reported in the most recent financial statements of all the companies in Benefacts Database of Irish Non-profits. The pandemic has decimated traditional interactive fundraising in its many forms – whether event-driven, church gate collections or calling to homes to sign up to direct debits. Some high-profile campaigns have mitigated this, such as Pieta House, which raised €2 million after a push on social media, but this is only a third of the €6 million raised by last year’s ‘Darkness Into Light’ walk, with no alternative project to fill the €4 million gap. Online fundraising simply does not have the same impact. Many non-profits do not hold an adequate level of reserves. A good rule of thumb accepted by some Government funders is 10 weeks of operational expenditure. Sadly, few non-profits enjoy this level of security. In fact, many Government funders actively discourage the holding of reserves, with the result that several non-profits operate a ‘hand-to-mouth’ existence in terms of cash. Although the cost base of larger non-profits reflects the labour-intensive nature of their work, Benefacts analysis shows that in the case of many smaller non-profits (i.e. less than €250,000), non-payroll expenditure amounts to some 70% of their cost base. This means the COVID-19 subsidy will be of limited value. The demand for services is higher, and the costs of delivery will increase with the cost of delivering care with social distancing restrictions still active. This will have far-reaching effects in homelessness services, respite, residential care, and many more service areas dominated by non-profits. In the voluntary housing sector, income support payments have helped maintain rent payments but, without a further injection of funding, it will become harder to meet the demand for housing given the likely consequences for the coming recession for the building sector. Inevitably, the current focus is on the immediate issues, but for the medium-term, thoughtful and clear-eyed planning will be needed. Directors and trustees need to be looking at cash flow projections, potential increases in demand, and commitments to continued government support. Without this, sector leaders are telling us that tough decisions may be needed to cut services as early as Q3 2020. Although the emergency fund is very welcome, many organisations will need an early commitment of future government funding into 2021 and beyond to maintain essential services. The alternative could be closures, with all the unthinkable consequences for the most vulnerable in our society.   Patricia Quinn is the Managing Director of Benefacts. Paula Nyland is the Head of Finance at Benefacts.

May 14, 2020
Press release

Chartered Accountants Ireland has responded to the announcement this afternoon by Minister for Finance and Public Expenditure and Reform, Paschal Donohoe, TD that the Temporary Wage Subsidy Scheme (TWSS) is to be extended until the end of August.  In the face of unprecedented disruption following the arrival of COVID-19, the swift introduction of this Government scheme has been a vital lifeline for businesses since March.  By retaining that crucial link between employer and employee, it not only provided immediate support for businesses but also positions them as strongly as possible for recovery when the time comes. Dr Brian Keegan, Director of Public Policy at Chartered Accountants Ireland said “Ireland’s subsidy scheme compares extremely favourably with similar initiatives worldwide, and credit is due to the Revenue Commissioners for in effect putting the PAYE system into reverse to make the scheme work effectively.  “Today’s extension of the TWSS brings much needed clarity for businesses at a time when the economy is gradually being reawakened. It allows businesses to plan for the coming months with a greater degree of confidence.”

Jun 05, 2020
Press release

Supporting post-COVID economic recovery will be top priority for largest accounting body. Following today’s AGM, the gender balance of the Institute’s Council stands at 50:50.  Paul Henry has been elected President of Chartered Accountants Ireland for 2020/2021 at its 132nd Annual General Meeting today, held virtually for the first time. Addressing the Chartered Accountants Ireland AGM, Mr Henry said his key priority as President of Ireland’s largest accounting body would be to harness the ability, experience and expertise of its membership network to support economic recovery in the aftermath of the COVID-19 pandemic. In addressing the challenges of COVID-19, he said: “This is, of course primarily a public health crisis and businesses have rightly taken unprecedented steps to protect their staff and the public. “As we come through the immediate threat of the pandemic, we will face the significant challenge of rebuilding the economies of the island of Ireland. I believe that our 28,500 members working in leadership, finance or advisory roles throughout Irish business, will play a key role in kick-starting the recovery and ensuring that business bounces back strongly. “It will be the challenge of a generation, requiring a collaborative approach between business, political leaders and the public sector. Chartered Accountants Ireland will be a strong supporter and advocate for the business community and the positive impact that a renewed economy can have for all throughout our society.” Mr Henry said that as well as supporting its current members, Chartered Accountants Ireland would work to highlight the opportunities available to a new generation of potential trainees within the profession. He said: “Economic rebuilding will create opportunities, particularly in finance and leadership roles. We believe that Chartered Accountancy training is the best possible business education and is more flexible than ever before, creating great opportunities for those seeking to train, whether they are a school-leaver or an experienced business professional.” Mr Henry, who takes over as President from Conall O’Halloran, is a Director with Belfast based property consultancy Osborne King and has extensive experience of real estate, insolvency and corporate finance. A resident of Belfast, Mr Henry qualified with Pricewaterhouse in 1989. Prior to his current role, he held positions with the Industrial Development Board, Enterprise Equity, PricewaterhouseCoopers and ASM Chartered Accountants.  He also served as Chairman of Chartered Accountants Ulster Society in 2014. At today’s AGM, Pat O’Neill was elected Deputy President of Chartered Accountants Ireland. Sinead Donovan was elected Vice-President. Following today’s AGM, the gender balance of the Institute’s Council stands at 50:50. Progress is also being recorded at wider membership level, which is currently 42 per cent female and 58 per cent male. ENDS For more information:  Jill Farrelly PR and Communications Manager Chartered Accountants Ireland jill.farrelly@charteredaccountants.ie/087 738 6608 About Chartered Accountants Ireland Chartered Accountants Ireland is Ireland’s largest and longest established professional body of accountants founded in 1888. The Institute, which is an all-island body, currently represents over 28,500 members around the world. Chartered Accountants Ireland is a founding member of Chartered Accountants Worldwide, the global alliance that brings together over 1.8 million Chartered accountants and students in more than 185 countries. Update For a synopsis of press coverage arising, please see here.

May 22, 2020