Opinion Analysis

Monday 9 December 2019

Wallets put away as charities' reputations in tatters

A 'Sunday Independent'/ Millward Brown Poll tracks a chilling effect following the multiple pay scandals.

Former Rehab boss Angela Kerins. Recent scandals have hit charity donations. Photo: Collins
Former Rehab boss Angela Kerins. Recent scandals have hit charity donations. Photo: Collins
Sunday Independent/Millward Brown poll results
Maeve Sheehan

Maeve Sheehan

THE shocking extent of the damage caused to charities by the scandals over executive pay is revealed for the first time in the latest Sunday Independent/Millward Brown poll.

The poll suggests that Irish people are now deeply sceptical of the charity sector, and that more than half of us are less likely to donate money in future.

The findings reflect the enormous reputational damage that charities have suffered as a result of the succession of controversies over how much they pay senior executives.

Eight in 10 people polled said they have become more suspicious of charitable organisations, while 95 per cent believe they must be more transparent about the funds they get.

There was an overwhelming view among the public that a maximum salary should be set for senior managers in charities; 90 per cent of those polled believed there should be a salary cap.

The findings of today's poll also reflect the financial hit that many charities have suffered. More than half of those polled – or 52 per cent – donated less to charity as a result of the controversies. And more than half said they are less likely to give to charities in the future.

Irish charities are already grappling with a combined €270m in funding from the State and the public in three years. A study published in December by Boardmatch Ireland – which matches volunteer directors with not-for-profit organisations and charities – found that they collectively experienced an eight per cent decrease in funding since 2011. Those losses have been exacerbated by the various charity controversies.

Charities ranging from hospitals to disability organisations have been dogged by disclosures about top-ups paid to senior executives revealed in a Health Service Executive audit last year.

Since then, the board of the Central Remedial Clinic has stepped down, after admitting that charitable funds were used to pay the salary and pension of its former chief executive. The Rehab Group has also come under intense scrutiny after its former chief executive, Angela Kerins, refused to disclose her salary.

The Sunday Independent/Millward Brown poll was conducted last week in the aftermath of the latest revelations about the Rehab Group, about the enormous consultancy fees the charity paid members of the board.

A former vice chairman of the charity, John Hussey, was paid €2.5m in consultancy fees over 11 years, along with pension contributions totalling €391,000 as well as director's fees.

Some members of the board recorded their "shock" and "dismay" on becoming aware of the payments in 2004, and Mr Hussey's contract was later terminated.

In a new development, the Sunday Independent has learned that Rehab's current company secretary, Keith Poole, had raised concerns about fees as far back as 2001, at a time when he was finance director. Mr Poole raised concerns about the "approvals process" for fees and the fees paid to directors of holding companies in 2001.

In a statement, Rehab said that the "issue was addressed" at the time.

Separately, Mr Hussey's deal with Rehab was put in place at a time when the charity's chief executive was Frank Flannery, who was later paid €409,000 for lobbying for the organisation.

Mr Flannery, a key Fine Gael strategist, was a director of the charity from 2011 but resigned from the board and his Fine Gael positions after details of his paid lobbying work emerged.

Mr Flannery and his successor as chief executive, Angela Kerins – who also resigned from Rehab – are expected to reply to another PAC request that they appear before it. If they refuse, the PAC may try to compel them.

When asked by how much its fundraising has declined, Rehab said this weekend: "While we continue to monitor trends closely, we cannot provide a figure at this point in time."

Sunday Independent

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