Chartered Accountants have a unique set of skills that can help guide and support the valuable work of Ireland’s charities and not-for-profits
Orla Roche, FCA, TMITI, has been volunteering in the not-for-profit sector since childhood and began to carve out a career in charity after qualifying as a Chartered Accountant with KPMG in Dublin and returning to live in her native Galway in 2002.
“I volunteered for charities from a young age and became involved in the sector because I find the objectives of charities very interesting; they make a difference,” explains Roche, who is currently co-Chair of the Institute’s Charity and Not-for-Profit Special Interest Group.
After returning to Galway, Roche also qualified as a tax technician with the Institute of Taxation and established Roche Chartered Accountants, her own business, offering tax and business consultancy services.
“I’ve worked in both the corporate and not-for-profit sector for the likes of Galway Simon Community, Pobal, Connacht Rugby, St Vincent de Paul, GAA, Trócaire and Goal in Sudan,” she says.
“Because profit is not the objective of a charity, my roles have been more varied and rewarding; it is not just about ‘doing the numbers’.”
Roche is currently Finance and Governance Manager with First Fortnight, a mental health charity, which recently hosted its annual arts festival at locations nationwide in January.
“First Fortnight challenges mental health stigma through arts and cultural action. We offer creative art therapy to children, adolescents and adults who are homeless or at risk of homelessness and we’ll be expanding this service to new locations around the country this year,” Roche explains.
First Fortnight is one of more than 11,500 charities registered in Ireland ranging from small, local and volunteer-only to large, national or international organisations with thousands of employees, according to the Charities Regulator.
Although all charities are classed as not-for-profit organisations, not all not-for-profit organisations are charities. Under the Charities Act 2009, a charity must be set up to promote one or more charitable purposes, promote only that charitable purpose and deliver a public benefit.
“Ireland’s strong charity sector plays a central role in our society. The diversity of the sector’s activities is reflected in the Register of Charities, which includes over 3,600 schools as well as libraries, museums, youth clubs, daycare centres and much more,” explains Helen Martin, Chief Executive of The Charities Regulator.
Aside from their societal impact, charities have a significant financial impact on the Irish economy. About 281,250 people are employed by registered charities, according to the Report on the Social and Economic Impact of Registered Charities in Ireland published last year by the regulator.
“That’s equivalent to almost one-in-eight workers. Total direct expenditure by Irish charities was estimated in our report at €18.6 billion in 2022, an increase of 28 percent over 2018. The overall financial impact of the charity sector was estimated at €32.1 billion in 2021, when the indirect and induced effects of activity are also included,” Martin says.
Personal motivation
Tony Ward, FCA, has worked in both voluntary and professional roles within Ireland’s charity and not-for-profit sector, prompted initially by his personal experience.
“My introduction to the sector came through my diagnosis with a degenerative eye condition in the early nineties, which led me to become involved with Fighting Blindness as a board member while working in practice, consultancy and the private sector,” he says.
“I would go on to become an employee of Fighting Blindness and then Director of Finance with The Wheel – Ireland’s national association of community and voluntary organisations, charities and social enterprises – until May 2022 when I went into consultancy, largely in the charity sector.”
Ward is currently co-Chair of the Institute’s Charity and Not-for-Profit Special Interest Group and sits on the board of several charities and not-for-profit organisations. He has firsthand experience of the benefits they can bring to individuals who need supports and services.
“I have benefited personally from continuing to be involved with charities working in the area of blindness and sight loss while learning about many others and the great work they do. They often fill gaps left by the State in the provision of essential services or enhancing aspects of society that are important to all, such as arts and sports,” he says.
“I think it is very important that we give back and what easier way to do it than in an area where we all have existing competencies, which probably fit with the skills charities desperately need?”
Chartered Accountants, in particular, have skills of great potential value to charities and not-for-profits, Ward believes.
“I would urge Chartered Accountants to give back by helping the charity and not-for-profit sector. Many are already involved and, the more I’ve become involved myself, the more I understood how complex and important the ‘business’ of running a charity is.
“Charities are all subject to the same or similar governance controls, business metrics and operational concerns as other organisations. It is very important that they have people with suitable skills involved,” he says.
Valuable professional skills
Orla Roche agrees that Chartered Accountants have a lot to offer Ireland’s charity and not-for-profit sector. Even if they don’t work full-time in the sector, they can bring valuable professional skills to the table on a voluntary basis.
“I feel my qualification has brought a much-needed function to the charities I have worked with. Governance and accountability are vitally important to charities,” Roche says.
“Since the establishment of the Charities Regulator in Ireland and the impending Charity Amendment Bill, charities have to be more transparent and I welcome these changes.”
For those Chartered Accountants who may be interested in volunteering, Roche says that there are safeguards in place to protect them from potential risks.
“Pitfalls might exist in very small charities with very few or no staff and few financial controls where the onus might lie with the directors,” she says, advising that these risks can be mitigated by:
• Using the Charities Statement of Recommended Practice (SORP);
• Keeping up to date records;
• Working closely with an auditor; and
• Complying with the relevant Companies Registration Office and Charities Regulator rules.
“The way I see it, Chartered Accountants have a vital role to play by joining the boards of charities in a voluntary capacity,” Roche says.
“Our analytical, financial and people skills can increase the transparency and accountability of the sector and you will find many Chartered Accountants sitting on the finance sub-committee of charity boards around the country.
“They can also help in producing accounts and ensuring financial controls and best practice are adhered to. This increases the transparency and accountability of the charities they volunteer with.”
For those interested in volunteering their skills for the first time, Tony Ward advises reaching out to their family, friends and local community or logging on to Boardmatch.ie, an Irish charity specialising in not-for-profit board recruitment, or Volunteer Ireland at volunteer.ie.
“There can be a lot of work involved, less so perhaps in organisations that have their own dedicated staff, but in my experience, a Chartered Accountant who understands how systems work can fairly easily slot into a charity board or committee,” he says.
Áine Crotty, ACA, first became involved in charity and not-for-profit volunteering while completing her training contract with KPMG in Dublin.
“I trained in financial services audit and then moved into risk consulting and then the insurance industry, but it was initially through my involvement in some of KPMG’s fantastic Corporate Social Responsibility (CSR) initiatives that I realised the benefits and rewards that could come from using my skillset to help charities as a Charity Trustee,” Crotty explains.
Role of trustees
The Charities Regulator defines Charity Trustees as the volunteers that sit on the boards of charities (or committees in the case of associations).
“They are the people who ultimately exercise control over, and are legally responsible for, a charity,” Helen Martin explains.
Her advice to existing trustees and Chartered Accountants who may be thinking of becoming a trustee is to familiarise themselves with the responsibilities of the role.
“I would advise them to check the charity’s entry on the Register of Charities to ensure that it has filed its annual report with the regulator and that key details, such as the names of the charity’s trustees, are up to date,” says Martin.
Through Boardmatch.ie, Áine Crotty secured her first role with a charity on the Audit and Risk Committee of the Board of Paralympics Ireland. She now also sits on the board of Gerri’s Place.
“Gerri’s Place is a not-for-profit, social enterprise that provides wellbeing breaks for people who need time and space to focus on their emotional and mental wellbeing,” she says.
“I have volunteered with and supported various mental health charities from a young age, as I had seen the effects of poor access to mental health services in my community. Joining the Board of Gerri’s Place has allowed me to continue contributing to a cause that is close to me.
The skillset of a Chartered Accountant is invaluable to organisations like Gerri’s Place, Crotty says. “I see my Chartered Accountancy qualification and the skillset that comes with it as a privilege; it’s an even bigger privilege to be able to use that skillset to give back to those in need.”
For other Chartered Accountants keen to explore trustee roles in Ireland’s charity and not-for-profit sector, Crotty has this advice: “If you are confident in your skills and ready to give back some of your time, there is a place for you. With the charity sector becoming more and more regulated, there is a real need for professionals such as Chartered Accountants to get involved.”
Regulatory environment
Like all legal entities, not-for-profit organisations are subject to general laws and regulations dependent on a number of factors, explains Níall Fitzgerald, Head of Ethics and Governance at Chartered Accountants Ireland, a board member of Age Action Ireland and co-founder of non-profit Chapter Zero Ireland. These include:
• How they are established (e.g. Companies Acts applying to companies);
• Their purpose or cause (e.g. Charities Act applying to charities);
• Their responsibilities (e.g. safeguarding legislation if caring for vulnerable people);
• Their activities (e.g. licencing or permit conditions for fundraising or events);
• Their governance structure (e.g. constitution, trust deed, etc.); and
• How they operate (e.g. employment legislation/health and safety legislation).
“In addition, the non-profit organisation may be subject to regulations or conditions because of where they source funding from,” Fitzgerald says.
A sporting organisation receiving funding from Sports Ireland, for example, will be required to comply with the Governance Code for Sport. A charity receiving government funding, meanwhile, may be required to comply, in full or in part, with governance requirements for state organisations.
“The financial reporting requirements for not-for-profit organisations also vary according to considerations similar to those outlined above,” Fitzgerald says.
In Northern Ireland, requirements are defined for charities as a category of non-profit organisations by the Charities (Accounts and Reports) Regulations 2015.
Under these regulations, the Charities Statement of Recommended Practice (FRS 102) (Charities SORP FRS 102) applies to charities with income exceeding £250,000.
In the Republic of Ireland, the Charities Governance Code requires charities to produce full unabridged financial accounts, and to make sure these are made publicly available.
The Charities (Amendment) Bill 2023, meanwhile, provides for a number of amendments to the Charities Act 2009. The bill, currently under scrutiny in the Dáil, aims to provide greater transparency for the public in relation to the finances and operations of registered charities.
“The amendments proposed will facilitate the introduction – for the first time – of much-needed financial accounting regulations for registered charities in Ireland,” Helen Martin explains.
“This will introduce greater transparency in the way charities report on their finances and ensure that all charities are treated equally regardless of whether they operate as a company or an unincorporated entity such as an association or charitable trust.”
This in turn will ensure that the financial statements of charities are more informative and more comparable than is currently the case.
Níall Fitzgerald recommends that not-for-profit organisations undertake a regulatory mapping exercise to determine the extent of the legislation and regulation each is subject to.
“This can be a useful process for a not-for-profit organisation of any size, enabling it to better design a fit-for-purpose governance structure that facilitates effective compliance and reporting, while the organisation mainly focuses on achieving its purpose and objectives,” Fitzgerald says.
Crucial role of accountants
Public trust and confidence is the bedrock of a charity’s existence and this applies whether it is a large organisation or one of Ireland’s smaller charities, writes Helen Martin.
Close to 50 percent of charities, excluding schools, have an annual income of less than €100,000.
Accountants can help support and enhance governance standards within charities. We know from our engagement with charities that many use accountants on a voluntary or professional basis to provide support on a wide range of financial matters, such as:
• Developing internal financial controls;
• Preparing financial reports, including management accounts; and
• Advising on and assisting with transactions and investments.
Promoting and supporting the principals of good governance helps ensure Ireland has a vibrant charity sector that is valued for the public benefit it provides across many facets of society.
This ranges from ensuring a robust risk management system is in place to making certain a charity’s details on the Register of Charities are correct and it is up to date with its filings.
Another key area in which accountants can play a role is in supporting transparency and accountability. We know from research that there is a strong link between greater transparency and accountability and public trust.
Accountants are accustomed to the requirement to comply with regulations and professional standards. Whether working on a professional or voluntary basis, as a charity trustee or a service provider, they can help charities by being familiar with their key regulatory obligations and making sure they are in a position to comply.
For example, it is essential to know when the charity’s annual report is due to be filed with the Charities Regulator and what your obligations are, as a charity trustee, if you receive a statutory direction to provide information under the Charities Act 2009.
Failure to file an annual report on time or respond to a statutory direction is a criminal offence and could also put a charity at risk of being removed from the Register of Charities.
Getting started: three-step checklist for new trustees
Níall Fitzgerald, Head of Ethics and Governance at Chartered Accountants Ireland, outlines three steps he recommends members take before agreeing to volunteer for a charity or not-for-profit.
1. Reflect on your personal motivation and the cause or purpose that matters most to you
This passion will be a key source of the energy required for any commitment you make, but it will also be an important filter when choosing which not-for-profit organisation to get involved with. For some members, the motivation will be clear from the outset. For others, you will know it when you see it—perhaps when you hear about the impact a certain charity is having or as you come across examples of its work.
2. Think about the skills, experience and level of commitment you can bring to a not-for-profit
This can be about much more than your financial or compliance acumen as a professional accountant, also taking into account any of the skills and abilities attained in your life and career. It is also useful to have an idea of the amount of time you can give to an organisation as this may be one of the key factors determining the extent to which you get involved.
3. Invest time and effort in identifying the right opportunity
Whether you are searching for a voluntary position or approached about a vacancy, it is recommended that you carry out some form of due diligence on the organisation. This includes getting a clear understanding of its vision, mission and values, and how these fit with your own. One tip here is to consider the ‘SPF factor’ – Strategy, People and Finance – and ask these three questions:
• What is the organisation’s strategy and what resources/capacity does it have to achieve this?
• What is the profile and skillset of the people leading and running the organisation?
• What is the state of the organisation’s financial position and performance?
In addition, consider the organisation’s expectations of you and your ability to deliver on them. Many of these matters are considered further in the Chartered Accountants Ireland Concise Guide for Ethics and Governance in the Charity and Not-for-profit Sector, available in the Ethics Resource Centre online at charteredaccountants.ie. Produced in 2018, the guide will be revised later this year to reflect more recent developments in the sector.
LOADING...