Irish Charities – Key Legislative Changes Introduced in The Charities (Amendment) Act 2024

The Charities (Amendment) Act 2024 represents a significant overhaul to increase transparency and accountability within Ireland's charitable sector. The amendments introduced in this Act are designed to restore public trust following several recent controversies in the sector. There are several changes which will impact the operations of a charitable organisation from an accounting perspective.

Commenting on these legislative updates, Tomás O’Leary, Audit Director at Baker Tilly Ireland, outlines his reaction. 

Changes In Financial Reporting

"The new financial reporting thresholds are a welcome change for the charitable sector," states Tomás. "Raising the income threshold for detailed financial reporting from €100,000 to €250,000 in respect of non-corporate charities reduces the administrative strain on smaller organisations. It allows such organisations to focus more of their attention on the mission of the charity, as well as securing funding to meet the charitable objectives they were established to meet”. 

Streamlined Regulatory Requirements for Agreements and Appointments

Tomás notes, "The Act introduces more rigorous conditions for agreements involving charities and related parties. This is crucial for preventing conflicts of interest and ensuring such arrangements genuinely benefit the charity." The legislation now allows for paid employees to be trustees, provided this aligns with the charity's governing documents and that any remuneration paid is reasonable and proportionate to the service being provided”.

Mandatory Notifications to The Charities Regulator

"With mandatory notifications now required by the Charities Regulator, organisations  need to maintain stringent records of significant organisational changes," explains Tomás. These include the appointment or resignation of a trustee, breaches of registration conditions as well as plans to dissolve a charity.

Judicial Oversight of Deregistration

"The requirement for High Court approval in most cases of deregistration introduces an essential layer of judicial review, ensuring that the process is handled with the requisite gravity," says Tomás.

Clarification of Roles and Responsibilities

"The updated definitions of charity trustees and members enhance clarity around the roles and responsibilities within charitable organisations, which is essential for governance," Tomás comments.

Constitutional Changes Require Authority Approval

"The requirement for prior approval from the Charities Regulator for specific constitutional amendments ensures that all changes comply with the overarching goals of the charity and statutory regulations," Tomás adds.

Broader Scope for Charitable Purposes

Tomás is optimistic about including human rights advancement as a charitable purpose, stating, "This expansion allows a greater number of organisations to qualify for charitable status, broadening the impact of their vital work."

In Conclusion

The Charities (Amendment) Act 2024 sets a new precedent for governance and operations within Ireland's charitable sector. Tomás sums it up: "While it remains to be seen how these changes will affect public trust, it is clear that the Act provides a robust framework for charities to operate within a more regulated and transparent environment. Charity trustees must stay informed and prepared for these changes to ensure their organisations continue to thrive under the new regulations.

These legislative adjustments signal a significant shift towards greater accountability and efficiency, aiming to strengthen the sector.