Diversity

Comment
15
Brian Keegan An uncharitable act?
Challenging a charity isn’t necessarily a
bad thing to do. In the world in which we
now live, we all need them to get it right.
The other day, I was greeted on the
street by a man with a collection
box who wanted to know if I
wanted to support his charity. I told
him I didn’t. I told him I didn’t like their
public policy platform or the way they
articulated it. If I did decide to give
money to the Developing World, it would
go elsewhere.
It’s not good karma to challenge a
charity. The charities sector fills in the
gaps that can’t be reached by private
benevolence or government policy. It
highlights injustices and inequities, and
good people respond with their money
and, even more importantly, with their
time. Most people are good. If you haven’t
done any charitable work ever, or can’t
think of anyone you know who has, you
are very much in the minority.
Pot shots
A colossal amount of charity work is
carried out by Chartered Accountants,
both privately and within organisations.
The Institute itself promotes and
sponsors Chartered Accountants Support
and Chartered Accountants Voluntary
Advice. You can be pro-business and be
pro-charity.
So why do some charities feel they
have to take pot shots at business? For
example, Oxfam has produced spurious
and inaccurate information regarding
how Ireland conducts itself in the
international tax arena, portraying the
country as one of the worst tax havens to
the disadvantage of developing nations.
This particular item of false news was
released in early December of last year
and damages the reputation of the
country. A cynic might say it was done
to generate interest in the charity in the
run-up to the Christmas period. This
kind of nonsense needs to be called out
for what it is.
I don’t need to repeat here what
Oxfam contended, nor indeed repeat
the rebuttal by an apparently irritated
Minister for Finance. The incident
itself is, however, worth repeating as a
reminder of how fragile people’s goodwill
can be and how critically important it is
for individual charities, and indeed the
sector as a whole, to maintain a good
image. It doesn’t help anyone’s cause
when there are media reports of charities
existing seemingly for the benefit of
their management, nor when there are
newspaper reports of tax avoidance
structures involving the use of charities
being put in place.
The key to a good reputation
It seems to me that the accountancy
profession can play a critical role in the
governance of the charities sector. Good
governance is key to the reputation of
this sector, before recourse ever has to
be made to the statutory authorities.
The regulatory framework for charities
has a fragile look about it because in
Ireland, the availability of charities tax
relief is still a decision for the Office of
the Revenue Commissioners and not a
decision for the Charities Regulator.
Back to 1891...
Tax law doesn’t define what a charity is.
For that, we have to go back to a court
case in 1891 involving a Mr Pemsel.
Pemsel was the treasurer of a Scottish
missionary organisation which not only
looked to convert heathen nations (their
expression, not mine), but also looked
for an exemption from income tax on
some of the bequests it received. We still
categorise charitable activities based on
that century-old decision – the relief of
poverty, the advancement of education,
the advancement of religion and the
ultimate catch-all – “all other charitable
purposes beneficial to the community”.
The regulatory framework for charities
has a fragile look about it because in Ireland, the
availability of charities tax relief is still a decision for
the Office of the Revenue Commissioners and not a
decision for the Charities Regulator.
While this definition may well
require modernisation, the obligation
on charities to be transparent in their
activities and accurate in their claims is
as valid now as it was in Pemsel’s time.
When it works well, and it usually does,
the charity sector is a highly efficient
way of delivering services. Few State,
semi-State or commercial organisations
would have such motivated personnel
working to deliver the kinds of services
many charities offer, often entirely in a
voluntary capacity.
On reflection, maybe it is not the worst
thing to challenge a charity when it gets
it wrong. We all need them to get it right.
BRIAN KEEGAN
Brian Keegan is Director of Public Policy
and Taxation at Chartered Accountants
Ireland.
www.accountancyireland.ie