What makes a Charity Good?

Why do we need charities?

Charities are groups of concerned citizens working together on some of the biggest issues in our world today, from children's welfare to disability rights and from hunger to climate change, and much more. Charities therefore perform a vital function on behalf of all of us.

Shouldn't the State be providing these services?

Nobody should be forced to depend on charity for the supports they need to live with dignity. Charities often step into the breach where public services are unavailable or inadequate.Charities also undertake activities that the State is unlikely to ever get involved in as well as innovate new ways of working that may eventually be adopted by the State. A strong case can be made that charities are very efficient and effective at delivering certain services.

Are charities regulated in Ireland?

Yes. Charities have to be registered with the Charities Regulator. Depending on their legal structure, they also have to comply with requirements set down by the Companies Registration Office, Data Protection Commissioner, Health and Safety Authority, Revenue, and others.

Why are there so many charities in Ireland?

There are 11,500+ Registered Charities in Ireland, ranging from tiny, volunteer-run community groups to major international relief agencies. In such a big sector there is undoubtedly some overlap, but the diversity of the charity sector is a key strength. It means complex issues are being tackled in many different ways (different target groups, geographical levels, focuses, approaches, etc).

Why do charities have paid staff?

Just under half of all charities have no paid staff at all. Volunteers, who give their time freely, are  critically important to charities. All charities are governed by unpaid board members. However, it is simply not possible for every charity to be run by people in their spare time. Many modern charities are busy, complex organisations that need to employ skilled and experienced staff. Just like any other sector in our society, these people need to be paid appropriately for the work that they do.

Are charity Chief Executive salaries too high? 

Organisations that are tackling some of society most challenging problems, such as finding cures for diseases or lowering suicide rates, need the best leaders they can find. Some charities have a national or international remit and employ hundreds of staff working in multiple locations. In order to attract and retain suitably qualified leaders, charities need to pay salaries that are sufficient, relative to the size and role of the organisation. In 2022, the average annual pay of a charity Chief Executive was around €74,000.

Is it true that not all of the money that is raised goes to the charity?

A charity must direct all of its resources towards its charitable purpose. If it does not do this, it is acting illegally. However, this does not mean that all the money raised is given directly to the charity's beneficiaries. Charities rarely hand out cash to the people they are set up to serve. Most of the help they give comes in the form of some sort of service (think helplines, accommodation, childcare, campaigning, etc). Such services require vital resources like staff, buildings, transport and equipment, which all have associated costs. Without these, the charity couldn't exist.

How much should a charity spend on overhead?

100% of a charity's income should be spent on achieving its goals. What then, is an overhead cost? Is it administrative staff, fundraising costs, advertising, electricity, stationery, computers or bank charges? These and other costs are all likely to be key to the organisation's ability to do its work, and do it well. There is no standard approach to defining overhead, so when one charity claims to spend 2% on administration costs and another says it spends 20%, they are not necessarily talking about the same thing. Overhead is a very poor indicator. Even if a charity seems to be more efficient because it has low overheads, this tells you nothing about its effectiveness and impact. You may find that organisations with higher overheads also produce better results.

Where can I find out more about a specific charity's finances?

Finances alone are not sufficient to indicate how good a charity is. Nevertheless, it is important that a charity has well-managed finances and that it is transparent about all of its income, expenditure and reserves. Good charities publish full audited annual accounts on their websites. If the organisation is a company limited by guarantee, you can also obtain a copy of its accounts from the Companies Registration Office (for a small fee).

Which charity should I support?

Start by asking yourself: what issues matter most to me? Then see which charities work in that field, and find one whose values you share. Make sure the organisation is legitimate and efficiently-run. Is it transparent about its resources, both the people who run the organisation and its finances? Does it coordinate its work with other relevant organisations? Does it apply professional standards to its work? Then try to ascertain how effective the organisation is. It is not enough to state good intentions; where is the hard evidence that it is making progress toward clear goals? Good charities will welcome the opportunity to share their strategies and impact with you.

How can I tell a good charity from a bogus charity?

Ireland does not have a significant problem with bogus charities. However, as in any walk of life, there are people ready to take advantage, so it is important to be vigilant. This is especially true when it comes to textile collections and some on-street or door-to-door fundraising. Here are a few tell-tale signs to spot a bogus charity:

• It does not have a valid Registered Charity Number
• It does not share its registered business address on promotional and fundraising materials
• It does not have a website
• It makes vague statements as to its purpose ("for Africa", "helping orphans", "cancer", etc).
• Do not part with your donation if you have any doubts.

Where can I complain about a charity?

If you are unhappy about the way a charity has represented or handled itself, your first port of call should be the charity itself. If you are still not satisfied after your initial contact with the charity, ask for a copy of its complaints policy and follow the procedures outlined in that document. Depending on the nature of your concern, you may also need to inform other parties, for example, An Garda Siochána, the Charities Regulator, Tusla, or others.

This is an article by Whitebarn Consulting © 

In 2014, Whitebarn Consulting was one of a coalition that brought about an online initiative called GoodCharity, set up to increase understanding of charities among the media and general public. Events have superseded this, but many of the points we made are still relevant today. This is an edited version of our myth-busting list of questions and answers. Presented with thanks to my colleagues at Charities Institute Ireland, Dóchas, Fundraising Everywhere and The Wheel.

This is a free resource from Whitebarn Consulting: please acknowledge source if reproducing - Last updated: 28 May 2024