Tuesday, April 28, 2009

Bogus charities could stay in business for a decade

Bogus charities could continue to operate for the next 10 years despite the recent enactment of regulation governing the sector.

Deirdre Garvey, CEO of the Ireland's charity advocacy group, the Wheel predicted the new Charities Regulatory Authority (CRA) provided for under the Charities Act will take more than two years to become operative, as Government spending continues to slow.

Once established, Ms Garvey said the structure of the regulation will mean it could take ''five to ten years to root out'' phoney charities.

The Revenue Commission has resisted any moves to renounce control over the tax exemption status of charities.

Thus the 7,000 charities currently registered with the tax office will automatically be deemed valid by the CRA. At the end of each year, all charities will be required to file public accounts. ''At that point if there are inaccuracies, the regulator can investigate the legitimacy of charities,'' Ms Garvey told The Irish Catholic.

''It could be five to 10 years before they are rooted out.'' There are a further estimated 12,000 charities not registered with the Revenue Commissioner operating in Ireland.

Under the Charities Act (2009), a body must satisfy one of 13 charitable purposes to become recognised as a charity.

The Department of Gaeltacht, Community and Rural Affairs with responsibility for the legislation said: ''In other countries, it has taken a number of years after enactment of the legislation for the new regulatory system for charities to be formally introduced. This is likely to be the case in Ireland also, though some individual provisions of the Act may be commenced before the bulk of the Act is commenced.''

The Act passed last month represents a victory for the Wheel which had lobbied extensively for legislation to regulate the community and voluntary sector.

The Act was controversially amended at the last minute to include a section that made it a criminal offence to sell a Mass card not authorised by a Catholic bishop.

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