Charity donations have plummeted by up to 40 per cent in the wake of the top-up payments controversy, according to Fundraising Ireland.
The umbrella group for professional fundraisers said charities were receiving phone calls on an hourly basis from people looking to cancel donations.
Chief executive Anne Hanniffy said two weeks of ongoing revelations about donations being used to top up salaries at the Central Remedial Clinic (CRC) was having a devastating impact on the sector.
While the revelations were a “million miles” from the activities or experiences of most organisations, she said it seemed all charities were being tarred with the same brush.
“There is no denying but that this is one of the most serious periods faced by the Irish non-profit sector.”
“I have been on the phone constantly to organisations over the past two weeks and they are extremely concerned that the people least able to live without their support - sick children, people with disabilities, families in need - are the ones who will most affected by this crisis in both confidence and donations.”
Fundraising Ireland based its estimate of the losses to the charity sector on a straw poll and on conversations with fundraising teams across the country.
Ms Hanniffy called on charities to publish their accounts online “as a matter of urgent public duty”.
She said Fundraising Ireland supported the practice of people being paid “fair and reasonable salaries” in charities, commensurate with their expertise and the impact of their work.
She also called on the Government to establish the charity regulator within the first quarter of next year, as its establishment “was already six years overdue”.
The Charities Act, which would have established a regulator for the sector, was enacted – but not enforced – in 2009.
The legislation would have also forced the country’s 8,000 charities to make their financial information public for the first time.
Minister for Justice Alan Shatter deferred the implementation of the legislation in 2011 on the grounds of cost.
However, the recent controversy surrounding salaries at the CRC has triggered fresh calls for the legislation to be implemented.
The Department of Justice indicated last week it plans to establish a charities regulator, albeit in shadow format, in the first half of next year.
“This crisis has completely undermined the years of work that most charities have invested in ensuring openness, transparency and good governance,” Ms Hanniffy said.
“It has also shown us that perhaps the time has come for a charity rating system that is based on transparency, effectiveness and impact. That way donors can be fully aware about where their money is going but also be fully appraised about whether their donation is doing what it is meant to do.”
