Ireland’s charity crisis

From their modest base in Limerick city centre, Karen McHugh and the rest of the Doras Luimní team are helping new migrants integrate into Irish society.

Founded in 2000 in response to the establishment of the direct-provision system for asylum seekers, the organisation provides direct support services and information programmes to those in need of assistance. But times are tough.

Having taken up a full-time role as chief executive more than six years ago, McHugh has seen her official working week drop to one day, so she must carry out many of the commitments of her role on a voluntary basis. “It definitely wasn’t my choice to do this. I find it emotionally really, really difficult,” she says.

Her main concern is not her reduced employment but the future of her organisation. Although Doras Luimní’s work has broadened in recent years, funding has become ever more scarce, and closure remains a constant worry.

“That’s the worst possible scenario, and we’re obviously not wanting to go down that route. The situation is we’ve cut back and cut back and cut back . . . We’re not planning to close our doors, but we won’t provide a service that’s not professional, either,” McHugh says.

One of the staples of Doras Luimní's survival has been a string of generous grants from Atlantic Philanthropies. Sustained by the altruistic Irish-American billionaire Chuck Feeney for the past three decades, the foundation has provided almost €2 million since 2006 for the work of McHugh and her colleagues.

But, after donating a staggering €1 billion to charities, universities and NGOs in the Republic of Ireland, Atlantic will be handing out no grants beyond 2016. Doras Luimní received a final allocation of just over €140,000 in 2013, money that is designed to last until the end of 2017.

“The Atlantic exit is just a huge crisis, because that provides core funding and it also supports match funding. Without that, really you’re running on a shoestring,” McHugh says.

The Atlantic wind-down, precipitated by Feeney’s aim to dispense with the entire $7.5 billion he amassed from his duty-free business, is but one of a succession of blows to Irish charities.

The recession, coupled with the crisis in public confidence caused by last year’s salary “top-ups” controversy, saw public donations plummet. Government cuts have seen budget allocations for many of the country’s 8,500 registered charities fall by between 8 and 10 per cent a year since 2010. Some have seen their revenue slashed to less than half what it was before the economic collapse.

According to figures from 2012, the State provided about €6 billion of the not-for-profit sector's total income of €10.4 billion that year; €1.14 billion came from organisations such as Atlantic Philanthropies and the now-defunct One Foundation. Set up by Declan Ryan, son of the Ryanair founder Tony Ryan, the One Foundation donated €40 million to charities helping children and young people between 2004 and 2013.

Whereas the One Foundation reserved its Irish funding for the four key areas of integration – mental health, social entrepreneurship, children and families – Atlantic Philanthropies has tended to direct its most generous grants to research and third-level institutions.

Shaking a bucket

The closure of the two groups was foreseen, and some key service providers have developed other revenue models to see them past Atlantic’s cut-off date next year.

But for others, especially rights and advocacy groups whose contributions to society aren’t as immediately obvious as Alzheimer’s or arthritis care, for example, the specialised and often low-profile nature of their work means that going out and shaking a bucket to make up for the shortfall simply isn’t a solution.

"For the overall sector as a complete whole, the significance is nowhere near as big. For those organisations which are funded by [Atlantic], it's obviously very important. The withdrawal of Atlantic funding is going to present an extremely difficult challenge for them," Ivan Cooper, director of advocacy with the charities representative group the Wheel, says.

“What the State is not interested in, generally speaking, and doesn’t fund to the same degree, is advocacy work by organisations that are looking to work with disadvantaged communities or minority perspectives.”

With “60 to 70 per cent” of revenue streams for some groups set to evaporate following the Atlantic wind-down, he says there is a feeling of inevitability that some will have to radically curtail the work they do and that others will close down altogether.

“It’s definitely a worry,” says Ian Power, director of SpunOut.ie, a website that offers advice on civic, social and health issues to young people. “I think it’s always a worry when you run an organisation that is small and is reliant on a couple of major funders. It’s not a worry that’s been to the front of people’s minds.”

As with so many other groups that were founded with or significantly aided by Atlantic’s monetary assistance, the dependable income stream put financial concerns at ease and allowed them to concentrate on the task at hand.

But it also meant that some organisations did not develop alternative sources of funding.

“It’s definitely evident in the sector that boards of organisations did not anticipate or begin to address this challenge as early as they should have, and I think that would be true in our case. I think that we all could have managed the transition a little bit better,” Power says. “The succession planning should almost have been part of the initial grant phase, and that should have been up to the boards to do.”

Between 2007 and 2013 the Older & Bolder campaign project saw eight elderly information and rights organisations come together to form a collective advocacy and lobbying group. Its demise two years ago is one of the few highly publicised closures that came as a direct result of a withdrawal of Atlantic Philanthropies funding.

Funding cliff “In terms of the end, what I was left with myself was a strong sense of concern for older people, and that continues.

While good work goes on in the charitable sector in Ireland, in terms of older people I still see a gap for a collective voice,” says Patricia Conboy, Older & Bolder’s former director, who has since emigrated to work with the British Geriatric Society.

Atlantic Philanthropies’ director in Ireland, Mary Sutton, says that since as far back as 2002, when the prospect of a funding wind-down was first mentioned, the foundation has been liaising with organisations it supports in order to avoid them facing a “funding cliff” beyond 2016. She says that a range of groups, particularly those concerned with rights and advocacy, have received training, briefing and consultation for this. Sutton adds that helping organisations develop funding beyond Atlantic was always a key part of the winding-down process.

As with Older & Bolder, which was “not sustainable at the level it was operating” after Atlantic pulled out, Sutton acknowledges that closures and consolidations lie ahead.

“There were some entities that we had established that were always, in our minds, of limited life,” she says; in one case, the functions of six existing groups are being restructured into two new organisations.

For Sutton, it is neither practical nor desirable for the State to plug holes left by Atlantic’s departure in the funding of certain civil-liberties and civil-rights campaigning groups, which often oppose Government policies or existing legislation.

But it’s far from a consensus view. “I think it’s absolutely disgraceful that our Government doesn’t provide any funding for this sector at all,” Karen McHugh of Doras Luimní syas. Others in the area make similar criticisms.

The Department of the Environment, Community and Local Government, which co-ordinates much of the Government’s grant aid for the community and voluntary sector, declined to comment for this article.

Key players

Pobal, the State body that administers funding to community organisations, says that last year it handed out “€337.2 million, which benefitted 2,110 groups”, including youth initiatives, early-years services and social enterprises, and that it “guides community organisations that are applying for and receiving funding”.

Tusla, the State’s recently established child and family agency, helps a wide range of not-for-profit groups, and it has more money than it used to, as it received a 2 per cent bump in exchequer revenue, according to the Wheel’s report on Budget 2015. But the organisation has altered its approach, relegating the funding of advisory or advocacy groups that have a limited physical presence in the community in favour of “frontline” intervention services, including healthcare assistance and helplines.

The Wheel also criticises the Department of Justice and Equality for not funding equality and human-rights groups, even though, the Wheel says, this is part of the department’s remit.

So the question remains: who or what will fill an Atlantic-sized hole in Irish charities’ finances? Some see European funding as forming part of an alternative model. Irish charities made a minimal dent in the €186 million Europe for Citizens initiative offered to EU states, for example. But Ivan Cooper of the Wheel isn’t convinced that this route can stem the erosion of charities’ incomes.

“Yes, there is undoubtedly potential there in relation to securing European funding, but I don’t think it is going to go anywhere near, for the organisations that are affected, making up the full gap between what they’ve been securing from Atlantic and what they could seek to secure from those programmes.”

Others, including Mary Sutton and Jackie Harrison of the Community Foundation Ireland, believe there is huge potential to develop philanthropy in Ireland – a point illustrated by the mere handful of grant-making foundations that operate here compared with the thousands that operate in Britain.

A confluence of factors has led to the current uncertain outlook: swingeing cuts from State sources, a punishing economic climate for fundraising, a markedly lower level of corporate donation than in the US and UK, a cultural aversion to establishing foundations.

And, unfortunately, the solution is anything but straightforward for our beleaguered charities.