independent

Saturday 19 April 2014

Charities must give full disclosure if they are to regain our trust

Angela Kerins, Chief Executive, Rehab Group
Angela Kerins, Chief Executive, Rehab Group

THE Irish public's attention span seems to be getting shorter and shorter. The public imagination is currently convulsed with the GSOC bugging controversy which managed, quite remarkably, to dwarf the country getting walloped by a tornado last week.

Only a few short weeks ago, as a country we worried about the use of public and private monies in paying lavish salaries and pensions for hospitals like the St Vincent's group, and charities like the Central Remedial Clinic and Rehab.

Public confidence in charities has collapsed, as has donations to many of the major charities. A crunch in services for the most needy in society is inevitable if the charities do not regain the public's trust.

There is only one route to regaining trust: full and complete disclosure. In this column before Christmas I predicted all charities would suffer in the short term, but those charities that were open with their finances would benefit in the long run. To date, many charities are reporting 40pc drops in their incomes since the CRC scandal broke. It is natural, in an atmosphere of distrust, that people will only donate to charities whose accounts they can see.

Speaking on 'Morning Ireland' in January, Angela Kerins, CEO of Rehab, called for greater transparency while refusing to disclose her own salary. Cue a media circus, and an attempted kick to touch by Rehab. In early January, the board of Rehab agreed to meet yesterday to decide to release details of Angela Kerins remuneration package, hoping, of course, that by the time the meeting came around the public will have forgotten. Yesterday Rehab disclosed Ms Kerins' salary was €240,000, which it deemed "competitive and fair".

Why does it matter how much one person is paid? The short answer is that it doesn't. What matters is the refusal of Rehab to be totally transparent.

Rehab receives €82m in payments annually from the State. As a Section 39 agency, it currently does not have to release the salary details of its employees or comply with public pay policy as set by the Government – but from 2015 onwards they have said they will do so. Why, suddenly, does Rehab want to disclose everything?

They want to avoid any negative press, but either way, disclosure or not, they would have faced a huge uphill battle – assuming journalists still cared about the story.

Rehab clearly want to be seen as a private entity which does work for the Government as well as other stakeholders, not unlike a consultancy or other type of business. In fact, 60pc of Rehab's revenue comes from non-governmental sources. Thus government interference in its running would be inappropriate. (Of course in any private company, the CEO's remuneration is released as a part of the annual accounts of the business). We know how much Tim Cook of Apple earns. We know how much Jamie Dimon of JP Morgan earns.

WE know because they tell us in their annual accounts. But Rehab is not Apple. And we'll only begin getting private sector levels of information about Rehab's activities from 2015.

Rehab's board may well want this transparency fad to go away. They might well be banking on the media's lack of interest in this story when GSOC and floods are the current obsession. They want to earn their high salaries and get on with their jobs.

But there is a power struggle going on between the HSE and its charities which will, we are told, soon become regulated entities not unlike banks.

Regulation in Ireland has a very poor record. The need for full disclosure for not-for-profit entities has never been greater. Rehab has been brought into a form of full disclosure through public pressure.

That this was needed at all should tell us everything we need to know about the attitude our charity sector has to real transparency.

As I wrote nearly five months ago now, those charities that disclose will have the public's trust and its donations. Those charities that don't will die. Rehab does great work, let's hope for their clients' sakes they stay around.

STEPHEN KINSELLA IS A SENIOR LECTURER IN ECONOMICS AT UNIVERSITY OF LIMERICK.

Irish Independent

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