Amendments to Charities Act

By: Patrick
29 Apr, 2023


The Charities Act 2009 (the Act) is the principal legislation governing the operations of charities in Ireland. The Charities (Amendment) Bill 2022, approved in April 2022, introduces various changes to the Act, thereby ensuring increased transparency, fairness and clarity in the conduct of charitable organisations. This will result in improved public confidence and trust in the charities sector. At the same time, it will facilitate the Charities Regulator in performing its statutory responsibilities.

The changes have been published as the General Scheme of the Charities (Amendment) Bill 2022. The bill’s primary focus is introducing financial regulations for charities and improving reporting requirements to increase transparency.

Some of the critical elements of the amendment bill are:

Now let us explain each of the essential factors in some detail.

Accounting Standards of the Charities Statement of Recommended Practices (Charity SORP) – The threshold for exemption from the preparation of accounts has been increased to €250,000 (in contrast to the previous entry of €100,000). This means that charities (incorporated or unincorporated) with a turnover over €250,000 must prepare their financial statements by the SORP and be subject to Charities Regulatory Authority (CRA) regulations.

Annual audit of the financial statements – The threshold for this requirement has been reduced. This will have the effect of application of Section 50 of the Act to charities registered as companies and will result in the charities over a particular threshold to reinject to statutory audit requirements.

The Advancement of Human Rights – A charitable purpose determines the criteria for an entity seeking stable status. The amendment bill has introduced the advancement of human rights for a charitable purpose. Therefore, an organisation with human rights references in its object clause is mustier as a charity.

Charity Trustees – The bill amends the definition of charity trustees and excludes the company secretary or secretaries when they hold no other office in the charity. It also has introduced fiduciary duties for the trustees, such as avoiding conflict of interest, acting in good faith and exercising care and diligence when executing the charity’s purposes. It also clarifies the meaning of misconduct and mismanagement about charity trustees concerning breach of duty or failure to remedy a break violation
Defining Members – The bill introduces a new definition of a member clarifying who is considered a member of a charitable organisation. For a company, a member is its shareholder or subscriber. In unincorporated entities other than companies, a member is authorised to nominate, appoint, or vote for an individual to be a charity trustee.

Enhanced Powers of the CRA– The CRA now has additional powers to penalise the charities (without referring to a court for approval) that are operating in non-compliance with the new law. Furthermore, the CRA must be noted, filed, and permission must be sought for changes to the charity’s Constitution.

If you would like to know more about the above amendments and their effects on the operations of your charitable organisation, feel free to contact our Support Agents today.

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