HOW IRISH NONPROFITS ARE FUNDED

The profile of nonprofits' funding is quite different from that of their counterparts in the private sector. Most are constituted in such a way as to serve the interests of their members or their beneficiaries, and their boards are accountable to these stakeholders, rather than to owners or investors.

Even where they provide full financial disclosures, nonprofits do not always report on all of the sources of their income which is why the biggest category here is "other".

In the main, Irish nonprofits reported revenues of €10.9b which came from fees and other income generated from their activities — including service fees from Government — from government grants, and from fundraising and donations^*.

^*Note that in 2015, more than a quarter of all nonprofits elected to publish abridged accounts, which provide no analysis of the sources of their income.

This income profile varies dramatically from sector to sector.

Note that in education, religion and sport there isn’t yet a published regulatory source for the financial statements of many of the nonprofits in these categories.

For now, only limited data on unincorporated charities is available

Today, charities form a substantial proportion (about 40%) of all nonprofits. In time this proportion will grow, as more nonprofits register with the Charities Regulator.

About 56% of these charities are incorporated as companies, which means that their constitutional and financial records are in the public domain because they are required to make an annual return to the Companies Registration Office, which publishes these documents under open data license terms.

Financial statements for unincorporated charities are not yet publicly available, and neither governance, employment nor financial data is yet released under open data license terms by the Charities Regulator. Any newly available data will inform Benefacts 2018 sector analysis report.

Government is the largest single source of funding to Irish nonprofits

In 2015, according to the reported receipts of 5,879 nonprofit companies, government committed €5.3b in current expenditure to the sector, which equated to 8% of current Exchequer spending in that year.

Most nonprofit companies receive no government funding at all. Of the 2,692 that report government funding, 66% rely on this for more than half of their income.

There is a trend towards providing Government funding by way of service agreement rather than grant

More than 60% of the €5.3b provided by government to nonprofits in Ireland now takes the form of contracts that are provided subject to the objective delivery of services under the terms of service level agreements.

The main sources of service contracts are the Health Services Executive (which has put all of its funding over €250,000 per annum to health and social care providers on this footing), the Department of Social Protection (in relation to employment creation) and Pobal (which is the administrator of many grant schemes on behalf of different government departments). These contracts are capable of being varied or substituted — this means potentially that they could be awarded to other nonprofits, or to for-profit providers.

Net assets amount to €10.4b

Based on balance sheet reports from 8,097 nonprofit companies, the sector’s reserves, or net assets (total assets less total liabilities) amount to €10.4b. (This number will increase when financial statements for religious and other non-incorporated charities become publicly available.) The growth in these reserves has been 6% in the period 2013 to 2015.

The main asset value is the universities and voluntary hospitals: 60% of the asset value is concentrated in 1% of organisations for which financial information is publicly available.

Liquid assets account for €3.7b, which is made up of cash, equities, bonds and investment properties. There are 392 nonprofits (mostly in professional and sector representative bodies, higher education and fundraising) where the value of their liquid assets is more than €1m.