Update on the Charities (Amendment) Bill 2023

Our Charity Law and Not-for-Profit team recently examined some of the key provisions of the Charities (Amendment) Bill 2023. This legislation aims to amend and update the Charities Act 2009. The Bill continues its journey through the Oireachtas. They provide an update on its current status.

The first substantive consideration of the Bill was conducted by the Select Committee on Social Protection, Community and Rural Development and the Islands on 22 May 2024. Prior to that date, we provided legal support to The Wheel and Charities Institute Ireland on a joint submission with observations on the initially published Bill. At the Select Committee hearing, a series of amendments to the Bill were proposed by Minister Joe O’Brien. Some of these took into account our observations on the Bill, with the Minister flagging that it was likely that further amendments would be required at the Report Stage. The Report Stage is next in the legislative process.

Some of the key amendments which were approved by the Select Committee include:

• Further refining the definition of “charity trustee” to ensure that a company secretary is not automatically considered to be a charity trustee. This exclusion applies unless the company secretary is also a member of the board. This includes situations where the company secretary is formally appointed, or acting in a capacity similar to a “shadow director” in company law. The previous reference to the holding of another “office” within the charity has now been removed.
• Reinstating the catch-all “any other purpose that is of benefit to the community” within the definition of charitable purpose. The Bill as originally published proposed to remove this phrase. This removal would mean that a new charitable purpose outside of those expressly set out in the Act could not be permitted. This recent amendment restores that possibility. However it also introduces a limitation to that possibility by providing that that purpose must be “similar to any of those listed in paragraphs (a) to (q)” i.e. similar to those purposes expressly set out in the Act.
• Increasing the maximum threshold that the Minister may set regarding the requirement to have annual accounts audited from the current €500,000 to €1 million. Although the Minister flagged to the Select Committee his intention is to set the threshold at €500,000 – an increase from the present prescribed threshold of €250,000.
• The introduction of a definition of “remuneration” for the provisions under which certain agreements with and appointments of charity trustees may be approved. For the purposes of those provisions, “remuneration” means “consideration, whether in cash or in kind, paid out of the property of the charitable organisation, and includes a contribution to a pension plan”.

Conclusion

These limited amendments are largely positive. However, the opportunity to make further substantive and practical improvements to the Bill on issues of concern to the sector remains. We look forward to the further consideration of the Bill by the Dáil at Report Stage, which Minister O’Brien indicated at the recent Wheel Summit, may take place in June. We will continue to monitor its progress and provide further updates as it evolves.

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The content of this article is provided for information purposes only and does not constitute legal or other advice.