Regulation of charities
The primary focus on this page is on the role of the Irish Charities Regulator and the role of the Charities Commission for Northern Ireland. While these pages highlight some aspects of regulation of charities in Ireland and Northern Ireland, care should be taken to ensure that charities are adhering to the necessary legislation and guidance in effect in the jurisdiction that they are regulated in.
Both Ireland and the UK have regulatory frameworks which are designed to promote transparency, accountability and public confidence within the charity sector. Four separate regulators oversee the sector across five jurisdictions These frameworks help maintain public trust and confidence in charitable organizations by regulating the sector and ensuring compliance with charity law. The relevant authorities are;
Each regulator has their own stated functions, which generally include:
- Strengthening public trust in the charity sector
- Overseeing charities and their trustees to help ensure that they are meeting their legal obligations
- Providing guidance and support to the sector
- Promoting the orderly behaviour of charity trustees
- Managing the register of charities in their jurisdiction
- Monitoring compliance of charities with charity legislation and carry out investigations of suspected misconduct when necessary
- Providing advice to government
Regulation of charities in the Republic of Ireland and Northern Ireland
As noted above, both jurisdictions have separate Charity Regulators who are appointed to regulate and oversee the sector. These Regulators are supported by legislation in both jurisdictions.
These Acts set out the legal framework within which charities must operate, including registration, reporting, governance, and enforcement provisions.
Charity trustees
A charity's trustees are the people legally responsible for the management of the charity. Amongst other things, the duties of charity trustees include;
- Ensuring the charity is carrying out its charitable purposes for the public benefit
- Ensuring compliance with the charity's governing document
- Ensuring the charity is accountable and complies with the law
- Managing the charities resources responsibly
- Acting in the best interests of the charity
- Acting for the charity with reasonable skill and care.
Trustees of a charity may be known under a different title depending on the legal structure of the charity. For example, in the case of a charity incorporated as a company, the trustees will be the directors of that company. Other types of organisation (such as unincorporated charities, trusts, societies etc) might have a board of committee members or officers. Trustees are responsible by law for what happens within their charity.
Guidance for charities
Another role of the regulators is the issuance of guidance to support charities. This guidance is available on the Charities Regulator and the Charities Commission for Northern Ireland websites. While the below is not a complete listing of the guidance in issue by both regulators, some notable publications are linked below.
Charities Regulator Guidance
- Most of the Charities Regulator’s guidance is contained on their guidance webpage. This contains some useful information, including.
Charities Commission for Northern Ireland Guidance
- Most of the CCNI’s guidance is available on the a-z of commission guidance page. This contains a wealth of information which will be of benefit to charity stakeholders. This includes guidance, toolkits and forms in relation to;
The above lists are not a complete listing of all material available on the Regulator’s websites and charity trustees and their stakeholders should familiarise themselves with the content available on both websites.
Complaints and investigations
Another important role that the regulators play is the investigation of complaints made to them. As a result, both regulators occasionally carry out investigations in relation to charities on the register. Many of these investigations will be in response to identified or reported concerns which the Regulator has been notified of. Where a complaint is made to a regulator, this may result in a formal investigation process. The Regulators do not publish all decisions made by them but some are made publicly available.
Some of the decisions, reviews and reports made by the Charities Commission for Northern Ireland are located on their decisions and reports page. The Commission has also released some useful Thematic Reports which provide some real life, anonymous examples which offer an in-depth analysis of a particular topic or area of interest to charities.
A catalogue of the various reports issued by the Charities Regulator is also available on their website, as well as some annual Compliance Reports and Research Reports.
Common issues arising on Charity Regulator Inspections
Trustees of charities may find it useful to review the reports issued by inspectors from time to time as a risk awareness tool as this may help with the design and implementation of necessary controls in their own charity. Some notable issues raised by inspectors include:
- Lack of transparency regarding expenses- purpose of spending not clear/ inappropriate supporting documentation
- Charity funds spent in an inappropriate manner
- Excessive mileage rates used
- Inadequate credit card systems in place (lack of proper approval). Including too much autonomy on the part of the holder
- Cash withdrawals made using credit cards (lack of transparency)
- Issues regarding the correct disclosures of related party transactions
- Lack of dual approval of bank transfers
- Lack of transparency regarding payments made to trustees
- Management accounts and budgets not prepared
- The signing of blank cheques
- Incorrect salary paid to CEO
- Lack of board oversight on activities and finances, including a lack of timely action
- Inadequate evidence of board training or induction
- Inappropriate personal use of charity’s assets
- Failures in the procurement/tendering processes in the charity
- Poor governance, including the failure to take minutes or properly document decisions taken
- Misapplication of charity funds by providing loans to trustees
- Lack of management of conflicts of interest
- The submission of a false audit report
Charities Governance Code
In the Republic of Ireland, the Charities Governance Code has been developed for charity trustees and explains the minimum standards that a charity should meet to effectively manage and control their charity. The code is based on six principles which can be tailored for complex and non-complex charities. The six principles on which the code is based are.
- Advancing charitable purpose
- Behaving with integrity
- Leading people
- Exercising control
- Working effectively
- Being accountable and transparent
Within the code, the importance of each principle is discussed, including ways in which complex and non-complex charities can put the principles into action.
The Charities Regulator has some useful guides on its Charity Governance Code page on how a charity can apply the code, including guidance videos and toolkits and template compliance record forms.
These pages are provided as resources and information only and nothing in these pages purports to provide professional or legal advice or definitive legal interpretation(s) or opinion(s) on the applicable legislation or legal or other matters referred to in the pages. If the reader is in doubt on any matter in this complex area further legal or other advice must be obtained. While every reasonable care has been taken by the Institute in the preparation of these pages, we do not guarantee the accuracy or veracity of any resource, guidance, information or opinion, or the appropriateness, suitability or applicability of any practice or procedure contained therein. The Institute is not responsible for any errors or omissions or for the results obtained from the use of the resources or information contained in these pages.
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