Mr Shatter announced he would give his €70,000 golden handshake to the Jack & Jill Foundation just hours after its founder accused Taoiseach Enda Kenny of ignoring its pleas over medical card withdrawals.
Mr Shatter said the donation would help children with very short life spans and their families, who are “under enormous pressure”.
The Dublin South TD — who said he was not resigning his Dáil seat — revealed his plan at the front of Leinster House after Mr Kenny publicly urged him not to accept the lump sum funded through public taxes.
“The Taoiseach didn’t know,” said Mr Shatter.
“The Taoiseach, I think, will now be learning of it. None of my colleagues knew of the decision I was making.”
The only people who knew were Senator Mary O’Brien, her husband Jonathan Irwin, who founded the charity, “and two or three people very close to me”, said Mr Shatter.
Mr Irwin said the charity, which provides respite care and home nursing for infants with severe disabilities and brain damage, was “enormously grateful”.
“It’s probably the largest philanthropic gift we have had this year for our children and more importantly it’s equivalent to 3,125 hours of nursing for my 300 odd children,” he said.
Asked if there was a contradiction in the fact that the donation came from someone who agreed to €113m cuts through medical card “probity” in this year’s budget — a sum that was later reduced to €23m — Mr Irwin said that was a “group decision” by the Cabinet.
He insisted the donation would not stop the charity’s campaign against medical card cuts. “We are not going to stop... until seriously ill children have an automatic right to a medical card,” he told the Irish Examiner.
Speaking earlier, Mr Irwin said the treatment of children whose cards are being reviewed was “cruel” and “horrifying”.
Parents relying on Jack & Jill welcomed the donation but said it does not change the crisis.
“Enough is enough. We need to fight until it’s sorted,” said Catherine O’Leary, whose son Tom, 3, suffers from a rare chromosomal disorder which means he is visually impaired, developmentally delayed, non-verbal, peg-fed, and has poor muscle tone.
The Swords-based mother, who is married to former Dublin GAA goalkeeper John O’Leary, said: “I don’t think anything political about any of this. All we want and families like us want is the card.”
For the latest election news and analysis visit our special Election 2014 section.