1 / 9

The relevance of the revised Charity SORP in Ireland - PowerPoint PPT Presentation

  • Uploaded on

The relevance of the revised Charity SORP in Ireland. Sheila Nordon 4 th October 2013. Charity Sector in Ireland – some facts. Est. 24,000 non profit organisations of which 8,342 currently qualify for charitable tax exemption (automatic registration under Charities Act 2009)

I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
Download Presentation

PowerPoint Slideshow about ' The relevance of the revised Charity SORP in Ireland ' - aya

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.

- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript

Charity Sector in Ireland – some facts

  • Est. 24,000 non profit organisations of which

  • 8,342 currently qualify for charitable tax exemption (automatic registration under Charities Act 2009)

    • 52% incorporated (mostly companies ltd by guarantee)

    • 28% unincorporated associations

    • 18% trusts

    • 2% other

  • Not known how many more will apply for/qualify as charities under new Act

  • Small number of medium to large charities and very large number of small charities – proportionality a key issue.

  • Attractions of the Charity SORP

    • It is appropriate to the needs of charities and accessible to those preparing and interpreting charity accounts (often not professional accountants e.g. donors)

  • It takes into account the specific differences between charities and commercial enterprises

  • It recognises the importance of narrative reporting for charities as well as financial reports

  • It provides a consistent reporting framework that allows for valid comparisons between charities in different sectors

  • It has been developed over years based on extensive research and consultation and takes into account the findings of the most recent review process

    • It is based on the principle of proportionality where small charities are concerned – different requirements depending on scale

    • It helps charities to demonstrate transparency and accountability to the public

  • The Status of the Charity SORP in Ireland

    The Charity SORP is recommended as Best Practice and is voluntary in Ireland – why is it different here?

    • we don’t yet have a regulatory authority like the Charity Commission in England and Wales or the Office of the Scottish Charity Regulator in Scotland who are the FRC approved “industry” bodies that developed the SORP but we will soon – the CRA

    • the Charities Act 2009 does not require compliance with the SORP – the equivalent legislation in Scotland, England and Wales does. The proposed regulations on financial reporting could conceivably change this over time and following appropriate consultation

    • there is no formal mechanism in place for the regulatory authorities in Ireland to feed into the development of the SORP but there is a precedent in relation to the “Pensions” SORP where the Irish Pensions Board (the statutory regulatory authority) has made it a requirement and is formally linked into the Pensions SORP making body.

      So why is the Charity SORP relevant to Irish Charities you might ask?

    Donors are least satisfied with understanding impact and seeing finances

    “Thinking about the last time you made a donation to charity that was significant to you, how satisfied were you with the different aspects of the experience”

    Base: Recent charity donors who answered each statement (approx 700 Jun 06, 768 Apr/May 13, 919 Apr/May 13) adults 16+, Britain. Source: Charity Awareness Monitor, Apr/May 2013, nfpSynergy

    Why is it relevant in Ireland? seeing finances

    • Public are least satisfied with understanding impact and seeing charity finances (based on public polling research)

    • The Charity SORP has been specifically designed to provide accessible information for users of charity accounts and it is tried and tested

    • Applying the new FRS102 standard for Public Benefit Entities (which is mandatory) without the benefit of the SORP interpretation and guidance would be like flying on one wing

    • The Charities Act 2009 already requires a narrative Activity Report from every charity – is it likely to be that different to the Trustees Annual Report as per the SORP?

    • The Charities Act 2009 also provides for more detailed regulation on Charity Reporting following consultation with the sector. First round of consultation last March reveals strong support for the Charity SORP.

    • One thing for sure – whatever emerges from the process will require charities giving more information than is currently provided by statutory accounts and company law

    Implications for reporting format seeing finances

    If not the Charity SORP then what?

    Are we going to start from scratch in Ireland?

    If we do?

    • To ensure consistency of reporting by charities the Annual Activity Report would have to include levels of financial detail not currently required in Annual Returns/Financial Statements under Company Law e.g. Fundraising, sources of income etc. (to be specified by regulation under Charity Law)

      Makes more sense to adopt the internationally recognised Charity SORP specially designed for charities adopting accruals accounting (which would apply to charity companies and non-companies alike) and develop a simpler reporting format for small charities similar to Scotland.

    This is your chance to have your views on the new SORP heard seeing financesTake it!

    Closing date for submissions is

    4th November 2013