Ireland’s Growing Prosperity Sparks Increasing Philanthropic Efforts

Resource type: News

The Chronicle of Philanthropy |

By Ian Wilhelm

In the last 10 years, the Republic of Ireland has earned the nickname the Celtic Tiger for its rapid economic growth.

Today, that tiger is changing its stripes — a growing number of Irish entrepreneurs are becoming as passionate about donating money as they are about making it.

“Generosity and capacity are already very much present in Ireland. Philanthropic infrastructure is developing rapidly,” Thomas C. Foley, the American ambassador to Ireland, said at a philanthropy symposium he organized here last month.

To foster the nation’s burgeoning charity activities — or as one participant put it, “to bring philanthropy out of the closet” — Mr. Foley brought together 100 or so nonprofit leaders, well-heeled donors, and government officials from both sides of the Atlantic.

The ambassador’s efforts received high-level support from the Irish government, with the country’s president, Mary McAleese, hosting a formal dinner for participants at her 18th-century residence in Dublin’s Phoenix Park.

Participants at the meeting said that Ireland is facing a unique opportunity in history to use its newfound wealth to heal religious rifts, fight child poverty, and solve other social problems.

But they also complained that Irish donors are hindered by tax policies and that the public is somewhat wary of philanthropists.

As Mr. Foley said: “Some even question whether private philanthropy is a good thing at all, believing that support of charities should be solely in the government domain.”

Tax Rules

While data on Irish giving are scarce, in 2006 the Charities Aid Foundation, in Britain, reported that Irish people donated a greater share of their country’s economic output to charity than did residents of Germany, France, or the Netherlands.

However, strict tax rules often hobble philanthropic impulses, said people at the symposium.

The toughest obstacles include a limit of 250,000 Euros — about $365,000 — on the amount of money that can be claimed in tax breaks for charitable gifts; a rule that allows deductions only for gifts of cash or marketable securities, investments that can be quickly sold to generate cash; and restrictions on how much income-tax benefit a charity trustee can receive when giving to the group.

Last year, the government proposed a bill that would set up a charity regulatory agency and rules governing nonprofit accounting requirements.

But the legislation, which has yet to be approved, does not remove any of the tax obstacles, said Jackie Harrison, chief executive of Philanthropy Ireland, a research organization.

The government is “well intentioned, but not sure if it’s ready to take the leap,” she said.

Another challenge to philanthropy’s emergence here is that the Irish public is skeptical of the motivations of wealthy donors.

“People thinks there’s a [tax] dodge there,” said Kingsley Aikens, president of the Ireland Funds, a nonprofit group that raises money for Irish causes.

Secrecy and Confusion

There is also some confusion about what constitutes a philanthropic gift. This month Denis O’Brien, one of Ireland’s richest businessmen, pledged to help pay the salary of the new coach for the national soccer team.

The payment was characterized as a “charitable contribution.” But some sports fans complained that it seemed like a self-serving act.

Given such examples, participants at the symposium said better philanthropic role models are needed.

Indeed, attendees pointed out that the philanthropist who has probably given the most to Ireland, Charles F. Feeney, was notoriously secretive about his charity work and only in recent years has been willing to discuss it publicly.

Mr. Feeney, an Irish-American, founded the
Atlantic Philanthropies, which is estimated to have provided more than $1-billion to education in Ireland.
To inspire others, some of the island’s newly minted millionaires are being more vocal about their humanitarian efforts.

Niall Mellon, a real-estate mogul, has contributed $15-million to a charity he set up in 2002 to build houses in the dilapidated townships that surround Cape Town.

“I went on a holiday to South Africa. I was appalled at the living conditions and I decided I was going to do something about it,” Mr. Mellon told The Chronicle in an interview.

But Mr. Mellon, 40, emphasizes that his philanthropy is small compared with big givers in America. “To be a big businessperson in Ireland only makes you a shopkeeper in the U.S.A.,” he quipped.

But regardless of the size of his gifts, he said, his ultimate goal is to convince more Irish people to embrace giving and volunteering.

In November, he and about 2,000 of his countrymen will fly to Africa with the goal of building 250 homes in an impoverished African town.

Such efforts can help create fertile ground for Irish charity to grow, he said. “Philanthropy is a gradual occurrence for people,” he said. “They have to be slowly introduced to the concept and the rest follows.”

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