More Support Needed for Charity Regulation Compliance, Says New Report from The Wheel
Nonprofit organisations are committed to compliance but experience a challenging burden of regulation. That’s according to a report released today by The Wheel, examining the experience of regulation among charities, community and voluntary organisations, and social enterprises in Ireland.
“Our members are committed to meeting their governance responsibilities,” said Colette Bennett, Director of Advocacy and Research at The Wheel. “Organisations across the sector understand the importance of transparency in their work and worked for years to encourage the establishment of Ireland’s Charities Regulator. We welcome and value regulation, but there is a risk now that the compliance and reporting demands associated with statutory funding and regulation are becoming increasingly onerous for the sector.”
Key findings of the report:
Complexity and Compliance Burden
The impact of regulation varies depending on the size of the organisation and the type of funding it receives. Organisations with State funding have a higher compliance burden than the general cohort (34.3% of organisations in receipt of statutory funding reported spending at least 5 working days per month on compliance activity, compared to 31.5% of the full study cohort). Large organisations have a higher compliance burden than small organisations (48.4% of large organisations report spending at least 5 working days on compliance activity, compared to 17.6% of smaller organisations), but are more likely to have the resources to avoid reliance on volunteers to carry out this important, and often complex, work.
Public Trust
Many respondent organisations identified a range of potential influences that they felt negatively impacted trust in the sector, including a lack of public awareness of the governance structures that currently exist (reported as an issue by 40% of respondents, and as a contributing factor by one in 10 respondents who felt public trust had decreased in the previous 12 months).
Relationships with Regulators
The quality of the relationship between regulatory bodies and sector organisations is generally good, but varies depending on the regulator involved. Respondents indicated high levels of trust in the Companies Registration Office (83.4%) and Charities Regulatory Authority (77.3%).
“The report highlights the efforts to which our members go to ensure compliance across multiple regulatory bodies, often while under pressure to provide essential services with limited resources,” said Ms Bennett.
The report outlines a series of recommendations to support regulation compliance:
- Government should review and streamline compliance and regulatory requirements to ensure that regulation in all its forms helps, and doesn’t over-burden, sector organisations.
- Funding contracts for the provision of State services should include the cost of compliance.
- Continued support and promotion of good governance to enhance public awareness.
- Greater collaboration and dialogue between the sector and Government stakeholders.