independent

Friday 18 April 2014

Revealed - how charities spend your donations

Survey shows half of monies go on salaries -- while half of CEOs have wages above €100k

CRISIS: Barnardos chief executive Fergus Finlay warned 'huge reputational damage' had been done to the sector as a result of the CRC revelations.

IRELAND'S leading charities received more than €1bn in funding last year, with more than €460m of this spent on staff salaries, a Sunday Independent investigation reveals.

An in-depth analysis reveals for the first time exactly how your donations and taxes in the form of government grants are being spent by our best-known charities.

Charities last week claimed that donations had plummeted by up to 40 per cent in the wake of the Central Remedial Clinic (CRC) 'top-up' scandal.

The fallout prompted many leading figures in the charitable sector to demand government action to deliver greater transparency in the accounts of the diverse myriad of charities making up the multi-million euro fundraising industry, as they felt they were being "tarred with the same brush".

The Sunday Independent contacted 40 of some of the better known of Ireland's thousands-strong charity sector to try paint a picture for donors of precisely where the money goes.

Most were frank and open with their financial affairs, with the CRC and Rehab Group failing to co-operate in the survey.

The charities have a total income pot of €1.09bn, collected from funding from the Health Services Executive (HSE) and Irish Aid, Lottery grants, fundraising events, generous bequests and hard-sought public donations.

More than €472m came from donations. Yet in some instances, this also included bequests and money from shops and fundraising events. Just over half of all income was spent on salaries, administration, governance and fundraising work. Some €101m is being spent on administration which includes costs like generating funds, rent, IT and general office operations.

Charities were adamant the vast majority of funds went to frontline work, and stringent efforts were made to cut costs. Barnardos pointed out that of every €1 spent last year, 88c was spent directly on work with children and families.

A crunching of the bare numbers shows €461.5m was spent on paying salaries. This includes administration staff but also frontline workers such as Down Syndrome Ireland's team of vital speech and language therapists and Trocaire's aid staff getting to the frontline in struggling regions.

In the case of the Brothers of Charity Services, the charity pointed out the €149.8m spent on salaries and PRSI came from government funding and was used to provide services to more than 4,000 people with intellectual disabilities, and also to aid a further 1,925.

Rehab claimed the survey would not deal with the "unique nature" of the group, as most of its income came from commercial activities.

Just over half of the chief executives surveyed had pay packets that top the €100,000 mark, with some having access to a company car, healthcare and pension contributions.

One chief executive, whose salary was below €100,000, received a €17,000 bonus, but many of the charities stressed they gave no bonuses or 'top-ups' whatsoever to staff.

Many of the charities were adamant they followed best-practices for the charity sector set in the UK, regardless of the Irish Government's broken promises stretching back over a decade to install a charity 'watchdog' to govern the sector.

There is no requirement in law that says charity salaries must be drawn from state funds, with some organisations receiving little grant funding. Several of the charities admitted to generally lumping all funds raised into "one pot". However, in the cases of specific appeals such as the Philippines typhoon appeal or Christmas drives, the money donated goes specifically to that cause.

Barnardos chief executive Fergus Finlay told the Sunday Independent that where possible, there should be separation of monies.

Mr Finlay warned "huge reputational damage" had been done to the sector as a result of the revelations emerging from the CRC.

Fundraising Ireland's Anne Hanniffy pointed out it was at "crisis" point, with some charities revealing their donations were down 40pc in the last two weeks. One of the best-known charities in the country, St Vincent de Paul, revealed donations were now down 8 per cent, and it believes the CRC controversy was a contributory factor.

Aid agency Concern has been inundated with calls -- with its Director of Public Affairs, Richard Dixon, saying it was "only natural" the revelations had raised concerns for people.

Focus Ireland warned the serious issues at the CRC were hitting donations across the board. The homeless charity is facing a drop of 30 per cent in donations so far this Christmas, and warned it wouldn't be able to continue to meet rising demands for help.

Emphasising the diversity of the industry, Mr Finlay pointed out that in the case of Barnardos, they had an income of around €23m -- with €17m spent on salaries. "That money is spent on people who work day-in day-out with vulnerable children," Mr Finlay said.

"It is a bit like saying 'I want to contribute to the school but I don't want the teachers to be paid.' If you look at the budget of a hospital, 70 per cent of the budget is on the wages paid to nurses," he added.

Paddy Connolly, chief executive of Inclusion Ireland, said the revelations had highlighted the country's over-reliance on the charity model, as those with disabilities did not need charity but did need supports to live independently.

Mr Finlay called for the naming of a charity regulator or 'watchdog' before Christmas -- as they try to limit damage.

Earlier this year, Justice Minister Alan Shatter said he was hopeful of having a regulator in place early next year. More than four years after legislation was brought in, Mr Shatter was unable to say when exactly the appointment would be made, but insisted he was "progressing" it as rapidly as possible.

Irish Independent

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