Humana arrives in Ireland

Charity investigated for alleged irregularities to set up here

Irish Times/October 30, 1998
By Catherine Cleary and Alison O Connor

An international charity which has been investigated by the British charities watchdog for alleged financial irregularities has set up in Ireland. Humana People to People, a Third World aid charity, has located around 100 clothes recycling bins in the Dublin area and plans to open charity shops.

The organisation was investigated by the British Charity Commission over allegations that all the money raised from the sale of second-hand clothes was not making its way to foreign aid projects, due to high administration costs.

In a recent statement the commission said it was continuing to monitor the charity to ensure that it "continues to act independently and its funds are properly applied."

Some Irish charities have expressed concern privately about the arrival of Humana. The organisation, which has applied to the Irish Revenue Commissioners for charitable status, registered with the companies office in April. A 26-year-old Dutch national, Ms Pauline van de Stadt, is the only resident director.

Ms van de Stadt denied any financial wrongdoing on behalf of the organisation. "I cannot answer for all the other countries. I can answer for Ireland." Asked about allegations that a large proportion of money raised was not being spent on aid, she replied: "That is not true."

On the question of the Irish operation's accountability she said: "We are registered at the Revenue Commissioners. They will of course check on us. We will send yearly accounts and all our statements. We have a firm of accountants. That is what we will do here. If people have questions they can come and ask."

Suspicion has been attached to the organisation in a number of countries, including Denmark and Sweden, fuelled by close links with Tvind, a wealthy Danish cult.

Despite Government pledges, there is still no sign of legislation to regulate charities in Ireland. Soon after she became Minister of State for Development, Ms Liz O'Donnell said an agency to regulate charities and relief agencies should be set up. More than 14 months later nothing public has been done to establish such a body. The main Irish charity organisations would welcome further regulation. Mr Owen Keenan, director of Barnardo's, said the majority of Irish charities would welcome further regulation and a register of Irish charities. At present, he said, anyone can set up a charity in Ireland: "We have more to fear from cowboy operations which give us all a bad name." According to the Revenue Commissioners, approximately 7,250 organisations have charitable status in Ireland, allowing them tax exemption on their income. Ms O'Donnell has said there is a need for agreed and supervised criteria for the operation of charities, such as the percentage of money spent on administration and the amount passed on to charity.

According to Ms O'Donnell's predecessor, Ms Joan Burton, the legislation had been drafted before she left office. "We held a day-long conference with charities and set up an expert working group that drew up a series of guidelines." Under the proposals, all charities would have to register with a charity agency and large charities would be obliged to publish accounts.

"The Bill was there. All of the consultative process had been undertaken for setting up a charities agency under the Department of Justice. The legislation was more or less ready to start doing the rounds of different Government Departments."

The British Charity Commission was given its powers in 1993 and since then it has moved to freeze bank accounts and investigate allegations of fraud in charities. In Ireland "it's very difficult for Revenue to prove that somebody is grossly unsuitable for charity status," Ms Burton says. The Revenue Commissioners refuse to publish a list of registered charities.

Mr John McCormack, secretary of the Irish Cancer Society, also wants change. "There is no policing, as such. There is broad agreement within the charity sector that a registrar of fund-raising bodies would be welcome and is probably inevitable."

Mr McCormack said the Professional Charity Section of the Revenue Commissioners did "a fair bit of work on an organisation before granting charitable status". The majority of the better-known charities, he said, were companies limited by guarantee with no share capital, all required to comply with the regulations of the Companies Act, filing a set of returns annually. Irish charities do not have to form a company, he pointed out, "but if they do they do bring the rigours of the Companies Act on them."

He pointed out that once approved by the Revenue Commissioners, and a charity number given, the organisation is subject to a full audit within 18 months to ensure that funds are applied for charitable purposes. Irish charities, while anxious for regulation, believe it is important that any new structure introduced does not simply put onerous obligations back onto them. It was also important, said Mr McCormack, that any such set up had "teeth". "It should be structured something like the Customs, with outdoor officers who would be able to go out to Grafton Street and see who is fund-raising or respond to queries about collectors at traffic lights. If all it does is put additional requirements on people like us then that is not good."

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