The Charities (Amendment) Bill 2022 was published by The Minister for Rural and Community Development, Heather Humphries on 29 April 2022. The purpose of the Bill is “to provide for a number of amendments to the Charities Act 2009. The proposed amendments aim to improve the ability of the Charities Regulator to conduct its statutory functions, ensuring more proportionate regulation leading to greater public trust and confidence in the charities sector.” The Bill is expected to be enacted later this year.

Some of the provisions include the following;

• Establish the promotion of human rights as a charitable purpose.

• Increase the threshold for filing of a full set of Financial Statements from a maximum gross income or expenditure of €100,000 to €250,000 (aligning with the Companies Act 2014).

• The accounting standard “Charities Statement of Recommended Practices (SORP)” will be compulsory. An exemption will be permitted for charities with a turnover of less than €250,000.

• Definition of charities trustee to be amended to exclude Company Secretaries (who hold no other office in the charity).

• Introduction of new statutory fiduciary duties for trustees to act in good faith, avoid conflicts of interest and exercise an objective standard of care, skill and diligence when advancing the charitable purpose of the charity, mirroring similar duties of Directors under the Companies Act 2014.

• New Definition of the term “Member”. This change extends the requirement to maintain a Register of Members to unincorporated associations.

Click here for full text of the Charities (Amendment) Bill 2022

Charities Classification System

The Charities Regulatory Authority launched a Classification System on 14^th November 2022 (as part of Charities Week) which broadly mirrors classification systems in other jurisdictions.

The purpose of the system is to improve functionality of the Charities Register, provide clarity on registered charities, improve data for research.

Charities to self-determine classification and rely on a “best fit” as it is not possible to achieve a perfect system. It is important to note that Classification will not put a limit on the types of activities a charity can carry out to further their charitable purpose.

How does it work?

In the example provided by the Charities Regulator, a museum for example would choose category “Arts and Culture” and can then select two secondary groups “History, heritage and culture” and “Museum or library”.

How to search charities using the classification System

A search facility will be introduced when the database is populated. This will be of benefit to funders, researchers and potential volunteers.

What should charities do now?

• Directors to agree on classification and record decision at a Board Meeting.

• Log into MyAccount to complete and submit form

• Once off process (unless charity wishes to amend it in future)

• Automatic registration of classification

• Immediate update to Register of Charities

 More Information

There’s a new Classification Section on their website with more information which includes:

• Charity Classification Standard

• Charity Classification Guide

• Step by Step Guide to submitting classification form

 Definition of a Charity Board Succession Plan

A board succession plan is a document that sets out the process to be followed when a Charity Trustee resigns. It’s very useful to prepare for when a Trustee’s term limit is coming up or when a Trustee departs unexpectedly. The Charity Regulatory advise that a Trustee’s term should be no more than 9 years. They have recently issued excellent guidelines on Trustee Term Limits and Succession Planning, click here.

1. Induction

• Induction should aim to introduce a new Trustee to the organisation, aims, values and provide an overview of the challenges its facing.

• Understand their legal duties, responsibilities and personal liability.

• A visit to the Charity and meet staff, volunteers, beneficiaries (if possible) and Trustees.

• Provide an induction pack, to include set of financial statements, recent minutes, copy of strategic plan and budgets etc. Further information on an Induction Pack from Charity Regulatory Authority here.

Check out the Charity Regulatory Authority Guidance on Induction and Recruitment here

2. Identify Skills Required

This will vary, most charities will need Financial expertise for example. You will need to consider the experience you need, for example do you employ staff? If so, you will probably need HR expertise and support etc. This exercise is very helpful when you’re considering new Trustees

3. Skills Matrix

Circulate the Skills Matrix and ask your Trustees to complete (tick under the skills-sets they already have). You will find that there is a broad variety of skills and experience amongst the Board. Once this exercise is completed, you can easily identify the “gaps” which will help pinpoint the exact set of skills you’re looking for.

4. Review

Periodically review the Induction Process (with feedback from Trustees) and also periodically review the Skills Matrix, which will need to be adapted with the needs of your charity and Trustee changes etc.

Resources

The Charity Regulatory Authority have excellent resources available on their website, links are below.

Succession Planning click here

Induction Pack Checklist click here. Induction and recruitment click here