Budget 2025 Ask #10 - Supporting our Sector to Deliver
In every corner of Ireland, from our bustling cities to rural villages, community and voluntary organisations form the backbone of our society. They bring communities together when the world is becoming increasingly divided, and they’re an essential part of how we provide healthcare, disability supports, housing, elder care, and youth services in Ireland. But as they are asked to do more in difficult circumstances – a housing crisis, a challenged healthcare system, a rise in online misinformation, among many other challenges – they are not getting the State support required to deliver. Without significant investment and commitment to their future, they face a serious existential risk.
Imagine an Ireland without these organisations. Without Meals on Wheels for older people. Without youth clubs in disadvantaged areas. Without support groups for those battling addiction. Without cancer support services or hospices. This isn't a dystopian fantasy – it's the stark reality we face if we don't act now to support our community and voluntary sector.
For years, these organisations have stretched every euro, relied on the goodwill of volunteers, and somehow managed to keep their doors open. But the cracks are showing. Rising costs, increased demand for services, and the lingering effects of the pandemic have pushed many to breaking point.
The Wheel, Ireland's national association of community and voluntary organisations, has laid out a comprehensive plan for the sector in our pre-Budget 2025 submission. It's not just a wish list – it's a roadmap to sustainability for a sector that impacts every aspect of Irish life. From the outside, it’s not always easy to appreciate how complex the nonprofit sector is, but there is a wide variety of actions needed to make sure that it can thrive.
At the heart of this plan is a call for collaboration with the state. An interdepartmental working group, working closely with sector representatives, could create a long-term strategy that ensures our communities' needs are met for generations to come. This isn't just bureaucracy – it's about bringing together the best minds from government and the sector to solve real problems.
Funding is, of course, a critical issue. A 10% uplift in state funding would help organisations cover their true costs, which have been greatly increased by recent inflation and rising operational expenses. This is a step toward a full-cost-recovery model — one where organisations can invest in their own sustainability rather than constantly worrying whether they can keep the lights on.
Similarly, multi-annual funding arrangements would allow for long-term planning, freeing up time and energy to develop more effective programmes and focus on delivering quality services. Short-term grants and contracts create a climate of uncertainty, forcing organisations to spend time and energy on writing proposals rather than on their primary services.
But it's not just about government funding. Introducing tax incentives for major charitable gifts could unlock a new era of Irish philanthropy. The Government published the long-awaited Philanthropy Strategy this year; imagine the transformative projects that could be realised if we encouraged more private giving to complement public funding.
In addition, raising the cap on the VAT compensation scheme from €10 million to €20 million is a practical step that would relieve financial pressure on the sector. At the moment, charities can claim back about 30% of their VAT expenses through this fund. An increase could double this figure and allow these funds to go back into the charity’s activities.
There is an opportunity to increase the degree to which nonprofits can benefit from EU funding, as many organisations currently lack the capacity to navigate complex application processes or to provide the necessary match funding to avail of it. In most EU funding contracts, the organistion has to cover a percentage of the budget itself, which many smaller nonprofits cannot. We propose establishing a match funding scheme, in which the state offers grants to cover the extra amount needed, to empower more organisations to tap into these vital resources, improving their ability to run more projects in their communities.
Equally important is the proposal to include the cost of compliance in all new funding contracts. Regulatory compliance is an unavoidable, often expensive, aspect of running a nonprofit organisation. And it is not covered by many funding contracts, despite its importance. By ensuring that these costs are built into funding agreements, organisations can employ dedicated, skilled staff to take on this often-complex work.
The community sector is also facing an insurance crisis, with skyrocketing premiums threatening the viability of many organisations. A proposed €10 million Community Insurance Compliance Fund would help organisations currently struggling with the threat of closure due to insurance costs.
Data, too, plays a crucial role. An additional €2 million for the Central Statistics Office to gather comprehensive data on the sector would provide the insights needed to make informed decisions about where resources are most needed. With more accurate data, both the government and the sector itself can identify gaps, measure impact, and plan for the future with greater precision.
These proposals aren't just about keeping the lights on in community centres across Ireland. They're about investing in the very fabric of our society. They're about recognising that the strength of our nation isn't measured solely by GDP, but by the health and resilience of our communities.
As we look towards Budget 2025, we have a choice: we can continue to undervalue and underfund the organisations that hold our communities together, or we can make a bold investment in Ireland's future. If we are serious about supporting the people and organisations that underpin our society, Government should make it a priority to ensure they can continue to deliver for future generations.
The Wheel’s Pre-Budget 2025 submission is available HERE