About Philanthropy Ireland
Philanthropy Ireland was founded in 1998 by the Irish philanthropic
community. Our mission is to represent, develop and inspire an
effective and robust philanthropic sector in Ireland.
We offer training courses, seminars, plenary meetings and special
interest groups to support individuals and organisations already
operating in the philanthropy area, as well as offering a network of
support to individuals who are new to the area.
Additional information about Philanthropy Ireland can be found on our
website: philanthropy.ie
philanthropy
5 Foster Place, Dublin 2, Ireland
T/F: +353 (0)1 670 8939
E: [email protected]
an opportunity to make your mark
W: philanthropy.ie
First edition September 2007
The Directory can be found at: philanthropy.ie/directory
philanthropy and related issues.
organisations which provide further information about
Irish Directory of Philanthropy. The Directory profiles
To find out more: Philanthropy Ireland has produced the
Introduction
What is philanthropy?
Philanthropy Ireland is the Association of Charitable Trusts,
Foundations and Corporations in Ireland. Philanthropy Ireland
is a company limited by guarantee, having no share capital,
company number 371896. Revenue Commissioners Charity
We are a generous nation. The Irish response to
“Philanthropy: an opportunity to make your mark” has
Philanthropy is the act of giving money, goods, time
disasters such as the Ethiopian famine and the Asian
been produced for donors, those who intend to give,
or effort to support a charitable cause, usually over
tsunami have shown that Ireland can mobilise its
wealth advisors and anyone with an interest in the
an extended period of time and in regard to a defined
wealth and its people to assist those in need. Our
area. It includes a framework for giving, discusses
objective. It can also be thought of as:
time commitment to charitable causes is also
current trends in philanthropy, as well as providing a
members). Support is also gratefully acknowledged from AIB
significant, with 23% of Irish people engaging in
snapshot on tax and legal issues relevant to
Group; Anglo-Irish Bank; The Atlantic Philanthropies; Charles
regular voluntary work. With the recent increase in
philanthropic giving in Ireland.
Stewart Mott Foundation; Department of Community, Rural
Number: CHY 14484.
the country’s economic wealth, there is a real
Philanthropy Ireland is funded by subscription fees from our
members (see philanthropy.ie/directory for full list of
and Gaeltacht Affairs; The Ireland Funds and RedQuartz.
opportunity to build on this generosity to address a
The mission of Philanthropy Ireland is to represent,
variety of challenges and opportunities in society.
develop and inspire an effective and robust
Support for this guide is gratefully acknowledged from
philanthropic sector in Ireland. More information,
AIB Group: however, AIB Group is not responsible for the
To date, many individuals and families have provided
resources and advice on giving are included on our
content of this publication, and the content does not
significant support to charitable organisations
website www.philanthropy.ie. The website also
constitute any advice whatsoever from AIB Group. AIB Group
through one-off donations or ad hoc support. Less
includes an Irish Directory of Philanthropy which has
shall not be liable for any loss whatsoever arising from your
frequent is planned giving or philanthropy where
been prepared in parallel to this guide and will be
giving is strategic, more structured and often on a
updated regularly. Please contact us at any stage if
longer term basis. We hope that this guide will help
you require additional information or would like to
you to find out more about the options for
learn more about any of the issues raised in this
philanthropic giving in Ireland. It has been produced
publication.
reliance on any information produced in this publication.
Nor are PricewaterhouseCoopers or Matheson Ormsby
Prentice/STEP responsible for the content for the tax and
legal sections respectively and the content does not
by Philanthropy Ireland, with generous support from
AIB Group.
Jackie Harrison
Chief Executive, Philanthropy Ireland
constitute any advice, whatsoever, from them.
strategic investment with
a social purpose;
phil
1
A framework for
philanthropic giving
1.
Why do I want to give? page 7
2.
What do I want to give? page 9
3.
What causes do I want to support? page 11
4.
How do I want to give? page 13
Current Trends in Philanthropy page 17
Legal issues affecting philanthropy insert 1
Tax-efficient philanthropy insert 2
2
the achievement of real
lasting change in society;
philanth
3
The perfect amount of money to leave
children is “enough money so that they
would feel they could do anything, but
not so much that they could do nothing.”
“I want the lasting legacy of the
Celtic Tiger to be that the Irish can
look beyond their own lives and help
those less fortunate.”
Warren Buffett
Niall Mellon
4
“I resolved to stop accumulating and
begin the infinitely more serious and
difficult task of wise distribution.”
planned giving with a
focus on impact.
Andrew Carnegie
philanthropy
5
Profile: The Atlantic Philanthropies
The Atlantic Philanthropies strives to bring about lasting change to the lives of disadvantaged and vulnerable people.
The foundation was incorporated in 1982 by Charles F. Feeney, whose wealth was created through the Duty Free
Shoppers Group (DFS). Mr. Feeney has left nearly his entire fortune to The Atlantic Philanthropies. In 2007 the
endowment amounted to about US$4 billion.
Atlantic opened an office in Ireland in 1990, and by 2004, Atlantic and Mr. Feeney had given grants of more than
US$1 billion in Ireland and Northern Ireland, much of it in support of higher education, but also on projects involving
the country’s older population and human rights issues.
Atlantic focuses the organisation’s grantmaking in four specific areas: ageing, disadvantaged children and youth,
population health and reconciliation and human rights. Mr. Feeney and the foundation’s board have committed to
spend all of its endowment by 2020 and to complete active grantmaking by 2016.
6
1
Why do I want to give?
There are many areas of need where philanthropy can
make a difference, and there are many ways in which
you can engage in philanthropy. Before considering
these choices, it is worthwhile thinking about your
own motivations, values, skills and experiences. Some
relevant questions may be:
■ Do you feel that your current charitable giving is
somewhat ad hoc, without any overall strategy,
and that, accordingly, it is very difficult to assess
its impact or effectiveness?
■ Do you feel that you are approached by numerous
good causes and fundraisers, but that you would
like to adopt a more selective and strategic
approach?
■ Are there members of your family that you would
like to remember through your philanthropy, eg, a
family member who suffered illness, or who had a
particular charitable interest?
■ Does your background, the community in which
you grew up, the journey of your own life and the
accumulation of your wealth give any inspiration?
■ Are you passionate about a particular cause, issue
or vulnerable group in society?
7
■ Do you wish to be a leader in philanthropic giving
and show an example to your peers, or would you
prefer to give privately?
■ Do you have particular skills or experience that
could enhance the impact of your giving?
■ Are there any public philanthropists, inspirational
figures or charitable foundations that you would
like to emulate or that you view as being
particularly successful?
■ Have you given any gifts to charitable
organisations that you found particularly
rewarding?
■ Have you volunteered or had any contact with
charitable organisations in the past that have
inspired you?
Profile: The Community Foundation for Ireland
The Community Foundation was established in 2000 as a donor services and grant-making organisation. It has grown
with the support of individuals, families, businesses, religious and others, enabling it to engage in effective
philanthropic activity by getting funds to the most deserving and effective local grassroots causes.
The Community Foundation pools contributions into an endowment fund so that the resulting income provides a
continuing and growing resource for the community. As Ireland's needs evolve and change, the Community Foundation
redirects its program to respond to the most pressing needs. The organisation also manages individual charitable
funds, each with their own purpose. Many are set up by donors to address a specific problem or area of concern or to
address evolving challenges.
For example, Harry Byrne (pictured above) a former senior Guinness Ireland executive, is a board member at The
Community Foundation for Ireland. His daughter, Alison – a doctor – tragically died in her thirties. Harry has
established The Dr Alison Byrne Fund in her memory, which now supports medically-related projects. "As a Director of
The Foundation I see the important contribution the endowment fund income makes for so many groups and this
inspired me to set up the fund."
8
2
What do I want
to give?
Money/Assets: Philanthropic giving is often considered
within the overall context of wealth management and
estate planning. There are many financial issues that you
may want to consider, together with your wealth advisors.
■ The amount of money and assets you and your family
will need for a comfortable lifestyle over the rest of
your life.
■ The amount of money you wish to leave to your
children and other family members.
■ The effect that tax may have on your estate, eg,
capital gains tax and estate tax.
It is important to note that the impact of an investment is
not determined merely by the actual amount of money,
but also by the manner in which it is invested. For
example, a targeted investment of €25,000 can achieve
significant impact through a donor-advised fund (How do I
want to give? section).
Time/Know-how: Many philanthropists emphasise the fact
that time spent engaging in philanthropy can be extremely
satisfying and rewarding. Often, their business and life
skills are just as valuable their financial giving.
9
Investing for the future: spending in perpetuity involves
leaving a specific amount of money and stipulating that
only the interest or earnings from the money may be
invested. This takes into account the fact that change in
society often takes a long time to happen, and offers a
chance to have a particular name remembered by future
generations, and to involve future generations of the same
family.
Giving while living: some philanthropists have chosen to
donate an amount of money within a specified period of
their life time. A time-limited investment period can be
useful to concentrate the mind and focus on achievable,
measurable change.
There are both time-limited and perpetual philanthropic
organisations in Ireland. The best way of finding out which
approach suits you best is to contact Philanthropy Ireland
which can connect you with either or both sorts of Irish
foundations to learn more about their structure and
governance.
Profile: The Ireland Funds
The mission of The Ireland Funds is to be the largest worldwide network of people of Irish ancestry and friends of
Ireland dedicated to raising funds to support programmes of peace and reconciliation, arts and culture, education and
community development throughout the island of Ireland.
Today, The Ireland Funds is a global philanthropic network. The Ireland Funds in Ireland, Australia, Canada, France,
Germany, Great Britain, New Zealand, Japan, Monaco, China and the United States are uniting the aspirations of the
Irish diaspora, a global community of more than 70 million people.
With over 100 events annually in 39 cities around the world attended by 40,000 people, The Ireland Funds is poised for
further growth in Ireland, the United States and elsewhere. Thus far, The Ireland Funds has raised over $300 million to
support its growing grants programme.
The Ireland Funds is currently planning a major capital campaign which will include the building of a permanent
endowment fund as well as increasing the number of individual donor-advised funds.
10
Pictured are participants in a project run by The Ark, A Cultural Centre for Children, an organisation funded by The Ireland Funds. Photo by Pat Redmond.
3
What causes do I want
to support?
There are many areas where philanthropy can make a
real difference. Philanthropy is a deeply personal
endeavour, and as such, will probably reflect your
personal convictions and values.
A list of examples (which is not exhaustive) where
philanthropy is making a real difference is given below:
■ tackling educational disadvantage;
■ promoting sustainable development and
safeguarding the environment;
■ breaking the cycle of crime by offering temporary
accommodation and work placements for people
leaving prison;
■ protecting and promoting Ireland’s artistic heritage
and investing in culture and the arts;
■ casting light on the hidden epidemic of suicide in
Ireland by carrying out appropriate research;
■ ensuring a knowledge-based future in Ireland by
investing in world-class universities;
■ assisting developing countries including rebuilding
South African townships and halting the spread of
the HIV/AIDS pandemic;
■ supporting civil society through investment in the
community and voluntary sector;
■ safeguarding fundamental human rights both in
Ireland and in other countries;
11
■ ensuring that older people are treated with dignity
and respect and are afforded the opportunity to
contribute to the good of society through their
experience and ability;
■ providing a voice for the marginalised in society;
■ supporting projects which provide all age groups
with the opportunity to engage in physical activity
and the involvement of disadvantaged young
people in sport.
Regardless of the particular cause, achieving
significant impact is at the core of philanthropic
giving.
Finding out more
There are many ways of finding out more about
particular causes. The internet is a useful resource. It
might also be useful to consult with existing
philanthropic organisations or individuals that have
experience in your area(s) of interest. Philanthropy
Ireland can assist you in this regard. Similarly, direct
contact can be made with charitable organisations.
Profile: Irish Youth Foundation
The Irish Youth Foundation (IYF) was established in 1985 to meet of the needs of young people experiencing poverty,
homelessness and drug abuse. Over 20 years later, the IYF continues to support groups working to achieve a better
life for vulnerable and marginalised children and young people.
The IYF strives to address the underlying causes of poverty, educational disadvantage, substance abuse and juvenile
crime. In partnership with donors and service providers, IYF identifies and builds opportunities that develop the
confidence, skills and capacities of children and young people through initiatives such as, after school clubs,
rehabilitation interventions, citizenship training, play and sports facilities and youth entrepreneurship programmes.
Over 10,000 participants benefit from IYF support each year.
Funds raised through IYF campaigns and events support work at local and community level. The IYF also engages
directly with companies to assist them in delivering their corporate responsibility programmes. Increasingly, IYF seeks
to match the interests of donors and high net worth individuals to the needs of vulnerable children and young people.
The guiding principle of the IYF is that achievement starts with opportunity.
12
4
How do I want to give?
Having identified the causes you want to support, it is
then time to investigate the vehicle that will help you
achieve your philanthropic aims. There are three main
ways to engage in philanthropic giving:
■ donating directly to charitable organisations;
■ spending through an existing philanthropic
organisation;
■ setting up your own philanthropic organisation.
It is of course possible to combine the above ways in
your giving.
Donating directly to charitable organisations
Through your life experience and research you may
have found one or more organisations, whose work
you value, to whom you wish to donate directly.
This approach works well where the organisation has a
strategic direction with which you agree and is
effective in the area. There may be a particular project
you are interested in assisting or alternatively you may
wish to contribute to the organisation's core costs.
13
Establishing a fund through an existing philanthropic
organisation
Many Irish philanthropic organisations have built up
significant expertise through their work. By working
closely with funded organisations they have a
detailed knowledge of issues affecting various areas
of need. Some philanthropic organisations offer specific donor-advised funds. A donor-advised fund is a
philanthropic fund run by a third party, where donors
can decide the areas that they want to support.
Foundations which offer such funds in Ireland include
The Community Foundation for Ireland, The Ireland
Funds and the Irish Youth Foundation. Other
foundations, while not actively seeking funds, have
accepted funds from donors where the objectives of
the donor and the philanthropic organisation are
closely aligned.
Advantages to this approach:
■ you can benefit from the expertise of an existing
philanthropic organisation;
■ you can save time and money by removing the
need to set up your own legal structures;
■ it is a great way to gain experience before setting
up your own philanthropic organisation.
Profile: Katharine Howard Foundation
The Katharine Howard Foundation was started in 1979 by Katharine Howard. Katharine spent all of her adult life in the
Gorey area of north Co. Wexford, and was involved in many local community activities throughout her life. As she had
no dependants and was the last of the family line, Katharine decided in 1979 to devote some of her wealth to a modest
charitable trust. This was added to during the following years. Upon her death in 1990, she left the residue of her
estate to this trust, together with the funds of a family trust established by her American grandmother, over which
she had power of appointment.
The then trustees were in a position to chart a serious programme which would give effect to the founder’s objectives
which were, specifically, the assistance of disadvantaged children and the elderly and the establishment of worthwhile
community initiatives.
14
Careful management of the fund and its investments by the trustees over the years helped its capital grow to a stage
where further reassessment was undertaken in 1998. Since then the Foundation has enlarged its board of trustees,
appointed a development director and an office manager. These appointments have allowed the foundation to add a
strategic role to its grant making programmes through working in partnership with other Foundations and statutory
and voluntary agencies.
The picture above was taken at the launch of The Whitaker Committee Report 20 years on - Lessons Learned or Lessons Forgotten? (on Irish penal reform).
4
Setting up your own philanthropic organisation
Philanthropic organisations (often called charitable
foundations or trusts) are organisations governed by
a document setting out the causes that it will support.
A group of people (often called trustees, officers or
directors) are responsible for overseeing the work of
the organisation and cannot receive payment for their
work.
Some key features of setting up your own
philanthropic organisation are listed below.
■ it allows maximum flexibility in choosing the areas
you want to support;
■ it offers full flexibility in the approaches taken to
philanthropic investment (see the Current trends
in philanthropy section of this guide);
■ it offers a way of shielding the donor from
individual approaches for money;
■ many philanthropic organisations employ staff to
maximise the impact of their investments,
although other organisations are run by voluntary
committees.
15
Establishing a separate organisation can be
appropriate where there is a significant amount of
money to be spent (although some philanthropic
organisations spend less than €50,000 a year, most
will spend above €200,000 a year), where the area of
focus is not covered by other philanthropic
organisations, or where a perpetual endowment is to
be made (especially if the endowment is of a form
other than cash). It is also an effective approach
where you would like to adopt your own unique
approach or you have a particular passion or project
that you wish to address through a different organisation.
Further details about the legal structure of
philanthropic organisations is given in the legal
insert to this guide.
Profile: Niall Mellon
There are currently 2.4 million families living in shacks or informal settlements across South Africa.
Niall Mellon (pictured) is an Irish property developer who runs a successful property development company,
Earthquake, which operates in Ireland and the UK. In 2002, Niall visited the Imizamo Yethu township in Cape Town,
South Africa. He was so moved by the horrendous living conditions he saw there, that he set up The Niall Mellon
Township Trust, in order to help alleviate the plight of its residents.
In a pioneering venture, Niall met with community leaders and undertook the extraordinary task of replacing 450
corrugated iron shacks with proper brick houses.
Through a combination of volunteers and local labour (unemployment runs at more than 40% in the township) who
worked year round on the project, the trust met its original target of completing 450 block houses in the township
and 1,500 volunteers have taken part in the annual one-week building programme.
16
Current trends in
philanthropy
A wide spectrum of approaches may be applied to
philanthropy. Some current trends have already been
discussed in the How do I want to give? section,
including donor-advised funds, giving while living, and
donations to charity. Explanations of some other
current trends are listed below.
Corporate philanthropy
Companies are increasingly aware of their
responsibilities to the communities in which they work.
Many are now engaging in corporate social responsibility
programmes, including setting up stand-alone charitable
foundations as an effective vehicle for corporate
philanthropy.
Grant-making philanthropy
Philanthropic organisations that adopt this approach will
typically have grant-rounds where organisations are
invited to submit proposals for funding, thus encouraging innovation and supporting the needs of charitable
organisations. Trustees or an advisory group decide
which proposals to fund, based on
pre-defined criteria and the potential impact.
Once-off philanthropic gifts
A visionary idea for change may not need ongoing
support, but rather a single donation to help realise that
vision. Although the benefits of a large-scale capital
project will be felt for years to come, the primary need
for funding may be at the start of that project.
17
Partnership-led philanthropy
Many philanthropic organisations choose to maximise
impact by using their expertise in co-operating with
charitable, other philanthropic organisations and the
Government in achieving their aims.
Social entrepreneurship
Some individuals use entrepreneurial principles to
tackle particular challenges in society. These social
entrepreneurs often take innovative approaches to
solving particular societal problems. Organisations
which support social entrepreneurship typically offer
financial support and access to a support network.
Social finance
Social finance involves lending money with the primary
purpose of achieving positive social change. Money is
lent to individuals or organisations where it is felt that
the money will achieve positive social impact. The
money is paid back, with affordable rates of interest.
Venture philanthropy
This area of philanthropy is undoubtedly the newest,
and has only come to prominence within the last
twenty years. Its name comes from applying
techniques more commonly associated with venture
capital to the task of philanthropy. Typically, this
involves supporting charitable organisations not only
with money but with business planning expertise.
Profile: The One Foundation
Set up in 2004 by Declan Ryan and Deirdre Mortell, the One Foundation is a privately-funded Irish foundation based in
Dublin. The organisation operates on the philanthropic principle of 'giving while living', with the founder being involved
in all decisions. Over the next ten years the One Foundation intends to fully distribute all the foundation's resources,
over a number of areas which it focuses on in Ireland including minority communities, disadvantaged children and
families, mental health, and social entrepreneurship. The organisation also has a programme in Vietnam.
An example of an organisation supported by the Foundation is the Migrants Rights Centre Ireland (MRCI), which was
established in 2001 as a national organisation to 'promote the conditions for social and economic inclusion of migrant
workers and their families who are in vulnerable situations in Ireland'.
The One Foundation's investment in MRCI followed the Foundation's venture philanthropy approach. Key aspects of the
investment are a performance-based approach, investing core funds over the lifetime of the business plan, and taking a
seat on the Board. The investment by the One Foundation (co-investing with Atlantic Philanthropies) has allowed MRCI to
significantly expand its combination of community work, direct service provision and advocacy work with migrant
workers and their families and its impact as a result.
18
Pictured are representatives from MRCI and migrant workers campaigning for positive change.
Profile: St. Stephen’s Green Trust
The trust was set up in Ireland in 1992 by a Dutch philanthropic family, which operates worldwide. Since 2003, the trust
has developed a structure which has attracted endowments and gifts from religious orders (which sold land for
development). These orders use the trust to develop grant-making schemes to suit their particular interests. To date,
partnerships have been established with the Daughters of the Cross, Discalced Carmelites and the Oblate
Congregation.
The current focus of the trust is to support voluntary and community organisations working with people with autism
and hearing impairment; older people in isolation, new communities, travellers, the homeless and offenders. The trust
also has a focus on work in the area of Christian values and social change. A new scheme has commenced in the past
year concentrating on a specific geographical area of Dublin, which, for decades, has experienced significant
socio-economic disadvantage. The trust aims to support the community and groups operating within it for the next 10
years.
Pictured are representatives from the Bedford Row Family Project in Limerick, who provide support and assistance to families of prisoners and ex-prisoners,
who are supported by the trust.
19
Profile: Vodafone Ireland Foundation
Vodafone has a unique family of 23 foundations and social investment programmes around the world, which are part
of Vodafone’s commitment to be a responsible global citizen and member of society.
Vodafone Ireland Foundation (VIF) was established in 2003 to help support Irish charities in responding to various
needs in Irish society. To date, the foundation has committed over €4.5m in funding to the sector. Following a strategic
review in 2006, the foundation looked to increase the positive impact of its funding by prioritising support for
programmes designed to help improve the lives of children, young people and families facing adversity in Ireland.
Vodafone Ireland Foundation also launched its 'World of Difference’ programme in 2007, an innovative new programme
offering up to four Irish residents who demonstrated the necessary passion, skills and commitment to make a real
difference the chance to spend a year working for their chosen registered Irish charity while having their salaries and
expenses paid for by the foundation.
Pictured above are the four winners from the 2007 World of Difference awards.
20
Legal issues
affecting
philanthropy
This document is intended as a broad overview of the legal issues surrounding
Irish charities. We are grateful to Paraic Madigan, Chairman of STEP (Society of
Trust and Estate Practitioners) and Partner at Matheson Ormsby Prentice, for
his input into this section.
We recommend that individuals seek legal advice from practitioners who are
experienced in the field of charity law.
philanthropy
1.
Last updated September 2007
Legal forms for Irish charities
Charitable organisations are not defined by a
specific legal form in Ireland, as is the case in
other countries. The legal form that charities take
is most commonly one of three types.
■ An unincorporated association
■ A company limited by guarantee having no
share capital
■ A trust.
Establishing your own philanthropic organisation
The majority of philanthropic organisations
establish as a charitable trust or a company
(limited by guarantee and not having a share
capital). Charitable trusts are governed by trust
law, and companies by company law. Both legal
forms are similar in that they are administered
according to a governing document (trust deed or
memorandum and articles of association), and are
overseen by unpaid officers (trustees or
directors), who may or may not recruit staff.
Table 1 gives the main characteristics of each legal form
Legal Form
Governing document
Limited liability for trustees/
officers /directors?
Legal context
Unincorporated
association
Constitution/Rules
No
Contract Law
Company limited
by guarantee
Memorandum and
articles of association
Yes
Company law
Trust
Trust deed or covenant
No
Trust law
Charities may also be co-operatives, although this legal form is rare within the sector.
Setting up a charitable trust
Charitable trusts are useful where there is a oneoff transfer of funds. The person transferring the
funds establishes a ‘deed of settlement’ where
funds are transferred to trustees. Alternatively, a
‘declaration of trust’ can be made by the trustees
themselves. The deed of settlement or declaration
of trust sets out the charitable purposes of the
trust.
Setting up a company limited by guarantee
Using a company limited by guarantee can be
useful where the donor may wish to change the
charitable purposes in the future, or where money
is to be spent for a limited time only. However, the
primary advantage in forming a company limited
by guarantee is to limit the liability of members –
typically if a philanthropic organisation is to own
land and buildings, hold events, employ staff, or
send people on trips overseas, then the limited
liability provided by a company limited by
guarantee make this legal form more appropriate.
The company is established by lodging the
Memorandum and Articles of Association with the
Companies Registration Office. These documents
should also set out the organisation’s charitable
purposes.
Steps in establishing a philanthropic organisation
The following are the main steps in establishing a
philanthropic organisation:
■ choice of legal form (trust or company);
■ drawing up of governing document defining
charitable purposes;
■ drawing up a Statement of Activities and a
Financial Statement;
■ appointment of trustees (trust) or directors
(company);
■ providing details of proposed activity,
including governing documents, Statement of
Activities and Financial Statement to the
Revenue Commissioners when seeking tax
exempt status;
■ in the case of a company, the company is
incorporated;
■ application for a tax registration number
which is then submitted to the Charities
Section of the Revenue Commissioners;
■ the Revenue Commissioners issue the
company or trust with its charity number (the
CHY number).
The role of the Revenue Commissioners
As described in the tax section of this guide, the
Revenue Commissioners are responsible for
deciding whether charitable organisations are
eligible for tax relief. If organisations are eligible
for relief, they receive a CHY number from the
Revenue. Some of the criteria that the Revenue
Commissioners use in granting tax exemption
status are given below:
■ the organisation’s purposes must be
exclusively charitable;
■ a majority of the trustees/directors are Irish
resident;
■ the organisation must be non-profit making or
distributing;
■ The charitable purposes must be for public
benefit (ie, not restricted to a very small
defined group of people) although the
Charities Act, 1961 provides that it shall be
conclusively presumed that a gift for the
advancement of religion will occasion public
benefit, (in this regard, the definition of
religion is tightly construed);
■ the requirement for public benefit may vary
considerably as between the different
categories of charities.
Charitable purposes are defined by Irish law as
including the following:
■
■
■
■
relief of poverty;
advancement of education;
advancement of religion;
other purposes of a charitable nature
beneficial to the community.
To gain a CHY number, a philanthropic
organisation must submit its governing document
(which can be in draft form) to the Revenue
Commissioners for approval.
The future of Irish charity law
In 2007, the government published a Charities Bill
to modernise charity law in Ireland. The bill
contained features such as:
■ a statutory definition of charitable purposes
for the first time;
■ the establishment of a Charities Regulatory
Authority and a Register of Charities;
■ qualification and disqualification of charity
trustees;
■ accounting and reporting requirements for
charities.
The Bill does not legislate for a new legal form for
charities.
The Charities Bill had not become law at the time
of writing of this guide. When the Bill is passed
into law, this document will be amended to reflect
the new legislation.
5 Foster Place, Dublin 2, Ireland
T/F: +353 (0)1 670 8939
E: [email protected]
W: philanthropy.ie
Tax-efficient
philanthropy
The Irish tax system recognises the value of charitable and philanthropic
giving to Irish society. This section seeks to explain some of the tax reliefs
available when engaging in philanthropy and we would like to thank
PricewaterhouseCoopers for their assistance in producing this section.
The information contained in this section is meant only to serve as a guide,
and to the best of our knowledge is correct at the time of going to print. We
recommend that individuals seek advice from an independent tax advisor,
especially as some of the tax reliefs on donations can affect other
non-charity-related tax reliefs, and given that tax reliefs are likely to be
amended in future.
philanthropy
2.
Last updated September 2007
Tax and philanthropic vehicles
The fourth part of the ‘framework for
philanthropic giving’ explained the options of:
■ donating directly to charity;
■ donating through an existing philanthropic
organisation;
■ setting up your own philanthropic
organisation.
The advice in this section applies equally to all
three philanthropic vehicles, assuming that the
Revenue Commissioners have approved them as
an eligible charity (explained at the end of this
section).
Donating an asset
When you sell an asset, you are normally liable for
Capital Gains Tax (CGT), which is applied on the
profit that you have made on the asset. If you
donate this asset to charity or to your
philanthropic organisation, you are treated as if
you did not make a profit or loss on the transfer
of the asset.
As long as the proceeds are used for charitable
purposes, the recipient charity will not have to
pay either CGT when it sells the asset, or any form
of Capital Acquisition Tax (ie, Gift or Inheritance
Tax) on the original gift of the asset.
Example: Anna bought 20 acres of investment
land in 1991 for €25,000. The land is now
worth €300,000. She donates it to her
charitable foundation which has gained
charitable tax exemption. Anna is not liable
for CGT in this instance, and the charity will
not be liable for Gift or Inheritance Tax. If the
foundation subsequently sells the asset and
uses the proceeds for charitable purposes, no
CGT will be payable.
Leaving money or assets in your will
As mentioned above, charities are not liable for
Gift/Inheritance Tax provided the gift or
inheritance is used for charitable purposes. If you
leave money or assets to a charity in your will,
the charity will not have to pay inheritance tax.
Example: Brendan leaves €1 million to a
previously established donor-advised fund in
his will. The organisation administering the
donor-advised fund will not have to pay
inheritance tax on Brendan’s bequest, as long
as it has charitable tax exemption status and
uses the funds for its charitable activities.
Income tax relief on donations
Donations of money to a charitable organisation
can attract income tax relief, as long as the
cumulative donation per charity is at least €250
in a tax year.
If you are a PAYE taxpayer, the charity claims the
income tax relief. If you are self-assessed for tax,
you claim the tax relief yourself.
There are two restrictions to the income tax relief
scheme:
1. If you are a member of a charity or closely
associated with it (eg, board member, employee),
income tax relief in any year will only be available
in respect of donations totalling a maximum of
10% of your income for that year.
2. Donations to charities are ‘specified reliefs’
and may, in certain circumstances, be subject to
the restriction which applies to such reliefs. For
example, if you earn over €500,000 a year, you
can only reduce your total taxable income by a
maximum of 50%. This restriction applies not
only to charitable donations, but to other reliefs
as well (eg, property-based reliefs): the total
reliefs under all the schemes cannot exceed 50%
of your income. You can carry over any excess in
reliefs to the following year. This restriction
applies only to donations made by individuals who
are self-assessed for tax purposes. If you fall into
this category you should take specific tax advice
to cover your particular circumstances.
Example: John is a higher-rate taxpayer.
He donates €30,000 to a donor-advised
fund. Assuming that he is paying the higher
41% rate of tax on more than €30,000 of his
income, the donation is worth €50,487
(€30,000 x (100/59)) to the donor-advised
fund. The donor-advised fund can claim
€20,487 (€50,487 - €30,000) from the
Revenue Commissioners
Example: Deirdre is self-assessed for tax. She
donates €10,000 directly to a charity. Deirdre
can then reduce her taxable income by
€10,000 when she completes her tax return.
Assuming that Deirdre pays the 41% higher
rate of tax on more than €10,000 of her
income, this represents a tax saving of €4,100
(€10,000 x 41%), and reduces the total cost of
the €10,000 donation to €5,900.
Donating shares
The donation of shares in a quoted PLC is a
special case, as donors can choose to either avail
of CGT relief, as with any other asset, or instead to
avail of income tax relief. If you avail of income
tax relief, the value of the donated shares when
they are sold is treated as a cash gift, as detailed
above. Note that you cannot avail of both CGT and
income tax relief on a donation of shares, you
must choose between the reliefs.
Example: Eoin buys shares in a quoted PLC for
€10,000 in 2003. They are now worth
€30,000, and he donates them to his family
charitable trust. He is self-assessed for tax.
Eoin chooses to avail of income tax relief on
his donation. He receives a letter from his
stockbroker indicating the market value of the
shares on the day he transferred them
(€30,000), and can then reduce his taxable
income by €30,000 – which, at a higher rate
of income tax, represents a saving of €12,600
(€30,000 x 41%). He is liable for CGT on the
increase in value of the shares at 20%: a
value of €4,000 (€20,000 x 20%). The total
saving for Eoin is therefore €8,600 (€12,600 €4,000).
Donating through your company
If a company donates to an approved charity, the
donation can be treated as a trading expense
(subject to a minimum donation per charity of
€250 as above), and so will be deductible for
corporation tax.
Example: Freda owns and operates her own
business through a company. The company
donates €1 million to a separate charitable
foundation. The company can then write this
donation off as a legitimate trading expense.
This will mean a corporation tax saving of
€125,000 (at a tax rate of 12.5%).
Special forms of tax relief
The tax code contains provisions for other types
of donations, details of which can be obtained
from the Revenue Commissioners. The list
includes:
■ donation of ‘heritage items’ to national
collections;
■ funding of scientific research.
How charitable organisations are taxed
A Revenue-approved charity is normally exempt
from the following taxes provided its income and
gains are applied for its approved charitable
purposes:
■ Income Tax (if trading activities carried on this
may require separate Revenue approval)
■ Corporation Tax (if trading activities carried
on this may require separate Revenue
approval)
■ Capital Gains Tax
■ Capital Acquisitions Tax
■ Deposit Interest Retention Tax (DIRT)
■ Stamp Duty (for gifts of land which will be
used for charitable purposes)
■ Dividend Withholding Tax
■ Discretionary Trust Tax
A charity is not exempt from the following taxes:
■ VAT (except in some specific circumstances)
■ PRSI and PAYE
The role of the Revenue Commissioners in tax
relief on donations for charities
The Revenue Commissioners are responsible for
deciding whether charitable organisations are
eligible for tax relief on donations.
The simple way of finding out whether a
charitable organisation is eligible for tax relief is
to check whether it has a CHY number. This
number is provided by the Revenue
Commissioners to organisations which are eligible
for tax relief, and the Revenue maintain a list of
all CHY numbers on their website. The Revenue
also maintain a list of ‘eligible charities’ which
contains the names of charities with approval for
the tax relief on donations scheme.
For individuals setting up their own philanthropic
organisation, it is important to note that the tax
relief on donations scheme does not apply until
two years after the Revenue Commissioners have
provided a CHY number and that a separate
application must be made to become an ‘eligible
charity’. The philanthropic organisation can
however, avail of other tax exemptions such as
those listed above, as soon as the CHY number is
granted.
Further information on the criteria applied in
granting a CHY number is detailed in the legal
section of this guide.
5 Foster Place, Dublin 2, Ireland
T/F: +353 (0)1 670 8939
E: [email protected]
W: philanthropy.ie
Introduction
What is philanthropy?
Philanthropy Ireland is the Association of Charitable Trusts,
Foundations and Corporations in Ireland. Philanthropy Ireland
is a company limited by guarantee, having no share capital,
company number 371896. Revenue Commissioners Charity
We are a generous nation. The Irish response to
“Philanthropy: an opportunity to make your mark” has
Philanthropy is the act of giving money, goods, time
disasters such as the Ethiopian famine and the Asian
been produced for donors, those who intend to give,
or effort to support a charitable cause, usually over
tsunami have shown that Ireland can mobilise its
wealth advisors and anyone with an interest in the
an extended period of time and in regard to a defined
wealth and its people to assist those in need. Our
area. It includes a framework for giving, discusses
objective. It can also be thought of as:
time commitment to charitable causes is also
current trends in philanthropy, as well as providing a
members). Support is also gratefully acknowledged from AIB
significant, with 23% of Irish people engaging in
snapshot on tax and legal issues relevant to
Group; Anglo-Irish Bank; The Atlantic Philanthropies; Charles
regular voluntary work. With the recent increase in
philanthropic giving in Ireland.
Stewart Mott Foundation; Department of Community, Rural
Number: CHY 14484.
the country’s economic wealth, there is a real
Philanthropy Ireland is funded by subscription fees from our
members (see philanthropy.ie/directory for full list of
and Gaeltacht Affairs; The Ireland Funds and RedQuartz.
opportunity to build on this generosity to address a
The mission of Philanthropy Ireland is to represent,
variety of challenges and opportunities in society.
develop and inspire an effective and robust
Support for this guide is gratefully acknowledged from
philanthropic sector in Ireland. More information,
AIB Group: however, AIB Group is not responsible for the
To date, many individuals and families have provided
resources and advice on giving are included on our
content of this publication, and the content does not
significant support to charitable organisations
website www.philanthropy.ie. The website also
constitute any advice whatsoever from AIB Group. AIB Group
through one-off donations or ad hoc support. Less
includes an Irish Directory of Philanthropy which has
shall not be liable for any loss whatsoever arising from your
frequent is planned giving or philanthropy where
been prepared in parallel to this guide and will be
giving is strategic, more structured and often on a
updated regularly. Please contact us at any stage if
longer term basis. We hope that this guide will help
you require additional information or would like to
you to find out more about the options for
learn more about any of the issues raised in this
philanthropic giving in Ireland. It has been produced
publication.
reliance on any information produced in this publication.
Nor are PricewaterhouseCoopers or Matheson Ormsby
Prentice/STEP responsible for the content for the tax and
legal sections respectively and the content does not
by Philanthropy Ireland, with generous support from
AIB Group.
Jackie Harrison
Chief Executive, Philanthropy Ireland
constitute any advice, whatsoever, from them.
About Philanthropy Ireland
Philanthropy Ireland was founded in 1998 by the Irish philanthropic
community. Our mission is to represent, develop and inspire an
effective and robust philanthropic sector in Ireland.
We offer training courses, seminars, plenary meetings and special
interest groups to support individuals and organisations already
operating in the philanthropy area, as well as offering a network of
support to individuals who are new to the area.
Additional information about Philanthropy Ireland can be found on our
website: philanthropy.ie
philanthropy
5 Foster Place, Dublin 2, Ireland
T/F: +353 (0)1 670 8939
E: [email protected]
an opportunity to make your mark
W: philanthropy.ie
First edition September 2007
The Directory can be found at: philanthropy.ie/directory
philanthropy and related issues.
organisations which provide further information about
Irish Directory of Philanthropy. The Directory profiles
To find out more: Philanthropy Ireland has produced the