What Makes A Charity Good?

#GoodCharity

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Are you wondering what makes a charity good? You may have heard charities being discussed in the media. Perhaps you are thinking of making a donation or maybe you are considering volunteering.

Before you decide whether or not to support a charity, you may wish to ask some questions.
We have developed this website to help you ask the right questions, such as:

  • What problem is the charity trying to solve?
  • Does the charity’s approach to solving that problem make sense?
  • What has the charity achieved to date?
  • Is the charity signed up to any professional standards?
  • Does the charity make information on its finances publicly available?

Have a look at the Frequently Asked Questions and Further Reading pages of this website for more detailed information.

If you have any questions about a specific charity, contact that organisation directly (you have a right to ask questions about any aspect of its work).

Frequently Asked Questions

If you have any further questions or comments, please feel free to contact us

Why do we need charities?

Charities are groups of concerned citizens working together on some of the biggest issues in our world today, from children’s welfare to disability rights and from hunger to climate change, and much more. Charities therefore perform a vital function on behalf of all of us. 

Shouldn’t the state be providing these services?

Nobody should be forced to depend on charity for the services and supports they need to live with dignity. However, charities often step into the breach where public services are either unavailable or inadequate. Charities also undertake activities that the state is unlikely to ever get involved in. A strong case can be made that charities are very effective and efficient at delivering certain services. Regardless of whether services are delivered by the state or by charities, people should be confident that they are getting quality services and the best possible value for money. 

Why are there so many charities in Ireland?

There are over 8,000 charities registered for tax relief purposes with the Revenue Commissioners, but there are many thousands more groups, clubs and associations in the broader not-for-profit sector. These range from tiny, volunteer-run community groups to major international relief agencies. In such a big sector there is undoubtedly some overlap from time to time, but the diversity of the charity sector is a key strength, not a weakness. It means that complex issues are being tackled in many different ways (different target groups, geographical levels, focuses, approaches, etc.).  For the same reason that we value diversity in our media, retail sector and political parties, Irish charities work hard to ensure that they reflect the broad range of opinions in our society. Compared to some of our nearest neighbours, Ireland has relatively few charities (in Norway there are 16 charities for every 1,000 people; in Scotland there are 4.3; in Wales there are 3; and in Ireland there are 1.8). 

Why do many charities pay their workers?

All charitable organisations are governed by unpaid board members, and more than half of all Irish charities have no paid staff at all. Volunteers, who give their time freely, are critically important to Ireland’s charities. However, not every charity can be run by people in their spare time. Many modern charities are busy, complex organisations, and may therefore need to employ skilled and experienced staff. Just like any other sector in our society, these people need to be paid appropriately for the work that they do. 

Are charity CEO salaries too high?

Organisations that are tackling some of society most challenging problems – such as finding cures for diseases, lowering suicide rates, or fixing homelessness – need the best leaders they can find. Some charities have a national or international remit and employ hundreds of staff working in multiple locations. In order to attract and retain suitably qualified CEOs, charities need to pay salaries that are sufficient, relative to the size and impact of the organisation. The charity’s board must determine the CEO compensation package and must ensure that it is fully transparent about its remuneration levels.

Is it true that not all of the money that is raised goes to the charity?

If a charity is fundraising then it must make sure all the money that is raised is used for its charitable activity. If it does not do this, it is acting illegally. However, this does not mean that all the money raised is given directly to the charity’s beneficiaries. There are very few charities that hand out cash to the people they are set up to serve.  Most of the help that charities give comes in the form of some sort of service (think therapies, helplines, accommodation, childcare, etc.). Such services require resources like staff, buildings, transport, equipment and fundraising, which all have associated costs. Without these vital supports the charity couldn’t exist.

What should a charity spend on overheads and administration?

100% of a charity’s income should be spent on achieving its goals. What then, is an overhead or an administration cost? Is it administrative staff, fundraising costs, electricity, stationery, computers or bank charges? These and other costs are all likely to be key to the organisation’s ability to do its work, and do it well. There is no standard approach to defining overhead, so when one charity claims to spend 2% on administration costs and another states it spends 20%, they are not necessarily talking about the same thing. Even if a charity seems to be more efficient because it has low overheads, this tells you nothing about its effectiveness. You may find that organisations with higher overheads also produce better results. We therefore urge you to ignore these meaningless statistics and focus on the impact of the charity.

Do good charities spend money on marketing and advertising?

Spending money on anything other than frontline services may at first glance seem undesirable, but some charities spend money on advertising and marketing for two very good reasons. The first is to raise awareness about the cause (how else would people find out about it?). The second is to raise much-needed money for that cause, which will allow it to provide more and better services. If in doubt, contact the charity’s representatives and ask them why they have chosen to spend their money in this manner, whether the return on investment is good, and what they have achieved as a result.

Where can I find out more about a specific charity’s finances?

Finances alone are not sufficient to indicate how good a charity is. Nevertheless, it is important that a charity has well-managed finances and that it is transparent about all of its income, expenditure and reserves. Good charities publish their annual accounts and/or other financial information on their websites. Alternatively, you can contact the charity by telephone or in writing. Any charity should be able to provide you with information on its finances, or explain why that information is not available. If the organisation is a company limited by guarantee, you could also obtain a copy of its audited accounts from the Companies Registration Office (for a small fee). Some charities may also have adopted the SORP (Statement of Recommended Practice) for their financial accounting and reporting.

How can I tell a good charity from a bogus charity?

Ireland does not have a significant problem with bogus charities. However, as in any walk of life, there are people ready to take advantage, so it is important to be vigilant of the the credentials of the charity you are considering donating to. This is especially true when it comes to textile collections and some on-street or door-to-door fundraising. Here are a few tell-tale signs to spot bogus charities:

  • It does not have a valid CHY number.
  • It does not share its registered business address on promotional and fundraising materials.
  • It does not have a landline number.
  • It does not have a website.
  • It makes vague statements as to its purpose (for example: “for Africa”, “helping orphans” or “for cancer”).

Do not part with your donation if you have any doubts.

Which charity should I support?

Start by asking yourself: what issues matter most to me? Then see which charities work in that field, and find one whose values you share. Make sure the organisation is legitimate and efficiently-run. Is it transparent about its resources, both the people who run the organisation and its finances? Does it coordinate its work with other relevant organisations?  Does it apply professional standards to its work, such as a governance code and The Statement of Guiding Principles for Fundraising? Then try to ascertain how effective the organisation is. It is not enough to state good intentions – where is the hard evidence that it is making progress toward clear goals? Good charities will welcome the opportunity to share their strategies and impact with you.

Are charities regulated in Ireland?

Yes. In February 2009, the Charities Act was passed. The Charities Regulatory Authority was finally established in October 2014. By April 2016, all charitable organisations in Ireland must have sought inclusion on the Register of Charities. Charities have to comply with many other laws and regulations. Depending on their legal structure, they have to meet specific requirements set down by the Companies Registration Office, the Data Protection Commissioner, the Health and Safety Authority, local authorities, the Revenue Commissioners and others.

Where can I complain about a charity?

If you are unhappy about the way a charity has represented or handled itself, your first port of call should be the charity itself. If you are still not satisfied after your initial contact with the charity, ask for a copy of its complaints policy and follow the procedures outlined in that document. Depending on the nature of your concern, you may also need to inform other parties, for example, An Garda Síochána, the Charities Regulatory Authority, or the Data Protection Commissioner.

Is ‘charity’ an acceptable word?

Many people feel that the word charity is no longer useful to describe what it is they do and is therefore best avoided. They might use alternatives such as community group, voluntary organisation, social enterprise, nonprofit, NGO (Non-Governmental Organisation), or something else.

Further Reading

We have come across some resources that we hope you will find useful. The signposts below range from the law to voluntary codes of practice, and from Irish support organisations for charities to international opinion pieces, with much in between. Let us know what else you would like to see here.

About Us

In mid-2013, the following organisations decided that the time was ripe to enhance the debate around charities in Ireland. We realised that the general public and the media were hungry for accurate information about how charities work, so we decided to develop this website as a positive step forward.

Dóchas is the association of Irish Non-Governmental Development Organisations. It provides a forum for consultation and cooperation between its members and helps them speak with a single voice on development issues.

+353 1 405 3801
www.dochas.ie

Established in 2007, Fundraising Ireland is the association for professional fundraisers in Ireland. We seek to foster excellence in fundraising and to promote high ethical standards for the fundraising profession in Ireland.

Tel: +353 1 881 8888
www.fundraisingireland.ie

 

 

The Wheel is a national support and representative body for community and voluntary organisations.

Tel: +353 1 454 8727
www.wheel.ie

Whitebarn Consulting helps not-for-profits to build a better world through the provision of a range of information and support services.

Tel: +353 1 296 7694
www.whitebarn.info

Get In Touch

If you have any further questions or comments, please feel free to contact us: