Wednesday, December 11, 2013

Charity Pitfalls

The Central Remedial Clinic has been very much in the news recently here in Ireland and though its behaviour is in no way unique, it does tend to highlight a number of problems generally with respect to the running of charities.

Unfortunately there has far to little accountability required by the charities. Unlike private commercial companies they do not have to provide audited accounts.
Furthermore the association with a worthy charity as for example helping to provide facilities for children with disability provides wonderful cover against possible unscrupulous behaviour of those running the charity. For the general public is predisposed to look on such work - unlike an activity such as banking - as highly commendable in social terms and therefore will tend to form positive feelings with respect to those involved.

However though the Central Remedial Clinic since its foundation has stood out as one of the best organised charities, there are clearly however unhealthy aspects as to its operations.

Indeed for many years it generated massive publicity from its association with Jimmy Savile who came over annually to Ireland on highly publicised walks to aid funding. In retrospect it is now perhaps easier to appreciate the unwitting danger to young children arising from this celebrity connection.

However it is the connection with former Taoiseach Charles Haughey which is perhaps more relevant in providing a background to its current problems. Through this connection the board of CRC subsequently became dominated by politicians with a strong Fianna Fail; connection. So several of the existing incumbents are identified as closely associated with Bertie Ahern (as his Drumcondra Mafia).

So it is this board that sanctioned the top-up payments to five of its senior executives. The payment especially to its former chief executive, Paul Kiely bordered on the outrageous enabling his salary to increase by more than 100% of the recommended level. In fact it emerged today at the hearings that the topping up (subsequently recalculated on his greatly inflated salary) will make his pension now greater than his original recommended salary.

Also when on Kiely's retirement a new chief executive was appointed, the position was not advertised externally but awarded to another long serving member of the board (who we heard today had likewise been given a top-up on the recommended salary). This appointee then resigned earlier this week apparently to avoid having to take responsibility for the behaviour of his board.

So these top-ups (and pension contributions at about €3 ml) came from the contributions of "The Friends and Supporters" who presumably would now be shocked at what had been happening to their money.

There was also a story in one of the Sunday newspapers at the weekend indicating that members of this board had formed a company to provide certain medical supplies. Then when it got into financial difficulties they were bailed out through a generous "loan" from "The Friends and Supporters".

The whole situation is unsatisfactory and unhealthy. Though a large part of its funding comes from the state through the HSE (Health Services Executive) it can conveniently get around state sanctions regarding the appropriate use of cash through use of its additional funding.

In any case it seems that the HSE is in part compliance with what was going forming part of the "nod and wink" culture that is still so prevalent here with respect to stipulated guidelines.
And when it comes to top-ups, government politicians seem to be the worst offenders in routinely looking for additional amounts for their "special advisors". Even the President had sought - and achieved - such a top-up for one of his own nominated advisors.

Also there seems to be a totally unhealthy situation in Ireland regarding the membership of boards operating to the entire benefit of a privileged inner circle. I was amazed for example when reading about the CRC board to see that most members holding multiple directorships on a wide variety of different boards. And as this kind of behaviour is itself fostered through the routine  patronage offered to key supporters by all the political parties (when in power) I do not see this practice changing anytime soon.

In fact if real change is to come it will have to be forced through public opinion.

Regrettably what is likely to happen in the light of present revelations is that voluntary funding for the CRC will drop dramatically unless drastic change is quickly implemented. This would require at a minimum that all members of the existing board stand down (that manifestly has been abusing their privileged position). This is not only necessary for the future of the CRC but by extension many other worthy charities that will be inevitably damaged by increasing public cynicism (if appropriate action is not taken).

Also the charities en masse should be required to provide full accountability so that contributors can ascertain exactly how their money is spent.

I would also question the "hard-sell" actions that increasingly are being used by many of the charities. I understand fully that they desperately need funding. However they should realise that they need to be seen to act in a fully transparent manner before having the right to request additional funding from the public.

For example it is increasingly common for fundraisers to arise unannounced on one's doorstep immediately seeking to sign one up to a direct debit system of  funding their charity. Additional pressure is then placed on would be donors by refusing to accept one-off contributions!

Also I have noted from experience that the more one donates to a particular charity that one will inevitably receive an increasing number of emotive demands for additional contributions, not only from this charity but also a variety of related charities.
While recognising that the charities always need additional resources, on a human level it becomes irritating dealing with this bombardment, perhaps leading a willing donor to cease contributing altogether!

Though the CRC is perhaps unfortunate in facing the full brunt of criticism at the moment (when clearly other charities are also culpable), perhaps it may ultimately be seen as a valuable development in bringing about much needed change with respect to the general operation of charities in Ireland.

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