Cork non-profit organisations received €416m in State aid

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Cork non-profit organisations received €416m in State aid

Report reveals disparity of state funding for non-profit organisations

Cork non-profit organisations, including charities received €416 million from the government last year. Benefacts has released its third annual analysis of the Third Sector in Ireland.

It makes for interesting reading as it draws on all of the data available from the public filings of nearly 30,000 non profits at the end of the first quarter for this year. 

Some of its key findings showed that there was state funding of €5.9 billion in 2018 which accounted for 8.4 per cent of all government expenditure. 

In County Cork, there is 2,803 non profit organisations and of these 890 reported receiving €416 million in Government funding and of these 890 organisations they have 150,000 on the books. Overall reported incomes for County Cork was €1.265 billion in 2017. 

In its report, it showed that fewer than 300 non-profits have a turnover greater than €5 million, with more than 3,000 reporting a turnover of €50,000 or less. It did outline how state funding is not evenly distributed. 

27,000 entities in the Benefacts Database of Irish Non-profits either receive little or no funding from the State, or they do not report it to an open public source.  €4.2 billion, or more than 70 per cent of public money committed to the Third Sector is directed at only 60 major charities providing higher education, health or social care services on behalf of the State. 

Moreover, most of the remaining €1.7 billion goes to about 1,500 non-profits about half of which are registered charities – that derive more than 50 per cent of their funding from the State.  About half of these smaller non-profits were established between 2000 and 2010, often as special purpose vehicles to provide job creation, local development, social supports and other arms’ length services on behalf of the State.  

The rest were set up independently of Government to provide services mostly in health and social services, local development, housing and advocacy.  Interestingly, Benefacts noted that the average size of a “non profit board is six directors/charity trustees- mostly older men.” And nearly a quarter have served on the same board for nine years or more. These trends are more pronounced in the boards of sports bodies  (where the male:female balance is 80:20), one third of directors/trustees have served for more than nine years) and were in social enterprise and social housing. 

The report also “debunks the impression” that non-profit employees are highly paid – outside of the 65 higher education, health and social care charities where staff are remunerated as though they were public servants, third sector pay norms fall way below the average in the rest of the economy, with fewer than 1 per cent of jobs attracting the higher pay of €70,000 per annum. 

The rules operated by Government funding departments and agencies require non-profits receiving State aid to provide their funders with the same version of accounts that they prepare for themselves – detailed statements including the auditor’s report, a directors’ narrative report, balance sheet, income and expenditure statement and notes setting out things like related party transactions, policies on reserves, staff remuneration and so on. 

However, a twist in charity law means that charities that are also companies file their accounts only to the Companies Office, and a delay in promised regulations to specify the form in which charity non-companies are to prepare their financial statements means that the public still has no access to the accounts of unincorporated charities – mostly religious dioceses and congregations, trusts and foundation. 

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As noted in the report: “This is accountability without transparency and it amounts to a lack of joined-up thinking on the part of the State funders and regulators. 

“This year these trends – 45 per cent of the non-profit companies filing abridged accounts, 5 per cent of non-profits – including charities – filing as micro-entities, no financial statements for 4,000 unincorporated charities – depriving the public of the capacity to analyse about €2.3 billion sector turnover.”

Corkman



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