What is a charity?
An organisation must meet specific criteria to be legally recognised as a charity in Ireland. These criteria and a charity’s legal obligations are set out in the Charities Act 2009.
Under the Act, a charitable organisation is defined as a body:
- That exclusively promotes a charitable purpose (a charitable purpose is a goal that is of public benefit)
- That states in its constitution or governing documents that it must use all of its property to further its charitable purpose (except for money used in its operation and maintenance, for example, staff wages)
- Does not use its property to pay or provide benefits in kind to its members, except in specific circumstances
A charity must be set up in one of 3 ways. The people who control and are legally responsible for its management are its trustees. Read more about the governance structures of charities.
The Charities Regulatory Authority (Charities Regulator) is an independent statutory body that regulates charities in Ireland. It maintains a public register of charities active in Ireland and monitors their compliance with the Charities Act 2009.
In November 2018 the Charities Regulator published a new Charities Governance Code, which sets out minimum standards for the governance of charities. Charities should be ready to comply with the Code in 2020 and report on their compliance in 2021.
What is a charitable purpose?
Your organisation must have a charitable purpose to become a registered charity. A ‘purpose’ is the reason your organisation was set up. It includes what your organisation aims to achieve, how it will achieve these aims, who will benefit and where the benefits extend. To be charitable, your organisation’s purpose must be of public benefit.
Your purpose is usually set out in your organisation’s governing document. The type of governing document your organisation has depends on how it is structured, so if your organisation is:
- A trust, this document is the deed of trust which establishes the trust.
- A company, this document is the constitution (formerly known as the memorandum and articles of association).
- An unincorporated association, this document is a written set of rules.
Types of charitable purpose
The Charities Act 2009 lists four types of charitable purpose.
1. The prevention or relief of poverty or economic hardship
Poverty and economic hardship do not just mean a lack of money or material things. They can also cover the impact a lack of money or material things has on a person. For example, your organisation could fall into this category if it provides money management and debt advice, or training to improve people’s employment prospects.
What constitutes the prevention or relief of poverty or economic hardship varies depending on who your organisation works with, and where it works. For example, an organisation working in one of the world’s poorest regions might provide clothing or food, but an organisation working in Ireland might help low-income families by giving gifts to children at Christmas.
2. The advancement of education
The advancement of education means that your organisation must support education. This does not mean that your organisation has to be involved in the direct provision of structured learning. For example, your organisation can build schools in a developing country or provide school books to children of low-income families in Ireland.
3. The advancement of religion
Existing case law establishes that a religion has two core elements:
- Belief in a ‘Supreme Being’
- Faith and worship of that ‘Supreme Being’
The Charities Regulator will examine whether your organisation meets the criteria of a religion (as outlined above) and how your organisation advances this religion, for example, by providing places of worship, raising awareness of religious beliefs or doing missionary work.
Donations or gifts for the advancement of religion are presumed to be of public benefit, unless it is proven otherwise. However, a donation or gift is not covered by advancement of religion if it benefits an organisation or cult:
- That uses oppressive psychological manipulation on its followers or to get new followers
- Whose main objective is to make a profit
If the Charities Regulator wants to rule that a gift for the advancement of religion is not of public benefit, it must get the consent of the Attorney General. You cannot appeal to the Charity Appeals Tribunal about a decision by the Charities Regulator or the Attorney General on this issue.
4. Any other purpose that is of benefit to the community
The fourth type of charitable purpose is quite broad, but the Charities Act 2009 provides detail of what is considered of benefit to the community, and it includes:
- Advancement of community welfare, including assistance for people in need who are young, old, sick or have a disability
- Promotion of civic responsibility or voluntary work
- Health promotion
- Promotion of religious or racial harmony
- Protection of the natural environment and the prevention of animal suffering
- Advancement of the efficient use of the property of charitable organisations
- Advancement of the arts, culture, heritage or sciences
- The integration of disadvantaged people into society
If a gift or donation benefits one person or a group of people connected to the donor it is not of public benefit and if it is an organisation’s purpose it would not be regarded as charitable.
However, gifts limited to a particular group of people may be of public benefit if there is a good reason why the gift is limited to this group and depending on the nature and purpose of the gift. For example, fundraising to pay medical bills for a group of people who have the same illness is regarded as a charitable purpose.
The charity test
Your organisation must meet specific requirements to be considered a charitable organisation. The Charities Regulator describes these requirements as ‘the charity test’ and your organisation must meet all the criteria to qualify. Your organisation must:
- Operate in the Republic of Ireland (the people your organisation helps do not need to be in Ireland)
- Exist for a charitable purpose(s) (see above)
- Exclusively promote this charitable purpose(s)
- Carry out all activities to further this charitable purpose(s)
- Exist to benefit the public or a section of the public in Ireland, or elsewhere, through its charitable purpose(s)
- Not be an excluded body (see below)
Certain types of organisations cannot become charities. They are known as excluded bodies and include:
- Sporting bodies (see below)
- Bodies that promote a political cause, unless it relates directly to the advancement of the charitable purposes of the body (see below)
- Political parties, or bodies that promote a political party or candidate (there are separate registration requirements for political parties)
- Trade unions or representative bodies of employers
- Chambers of commerce
- Bodies that promote purposes that are unlawful, immoral, contrary to public policy, in support of terrorism or terrorist activities, or for the benefit of an organisation that it is unlawful to be a member of
Not all sports-related bodies are automatically excluded from becoming a charity. For example, a cycling club for survivors of cancer and their families in a particular part of Ireland may be considered a charity under the advancement of community welfare and the promotion of health.
Promotion of political causes
An organisation which has an exclusively political purpose cannot be a registered as a charity. An organisation is considered to have a political purpose if it:
- Is a political party
- Promotes a political party or candidate
- Is set up exclusively to promote a political cause, such as bringing about a change in the law or policies of the Government or other public bodies
However, a charity can engage in activities that promote a political cause if the promotion of the political cause:
- Relates directly to the advancement of its charitable purpose
- Does not promote a political party or candidate
- Is not contrary to the charity’s governing document
The Charities Regulator has published Guidance on Charities and the Promotion of Political Causes (pdf), which explains the rules that apply to organisations when they work to promote a political cause.
If your charity is promoting a political cause, you should also comply with the Regulation of Lobbying Act 2015. Under this Act anyone engaged in lobbying must register on the public Register of Lobbying and supply information about their lobbying activities to the Standards in Public Office Commission. You can register on lobbying.ie.
If you are concerned about a charity or its activities, you can raise a concern with the Charities Regulator. The most common concerns are about financial mismanagement, that the organisation is not a real charity and governance concerns.
Where to apply