Peter McVerry Trust problems ‘eminently salvageable’, says charity rescue expert
Fr Peter McVerry said on local radio on Thursday that the financial problems at the PMVT have come about because his charity had tried to help too many people, too fast. Picture: Gareth Chaney/ Collins Photos
Charities in Ireland have suffered a distinctly bruised reputation over the past seven years, but the latest story of financial irregularity at a major housing charity appears to be a tale of too much expansion, too fast.
Scandals at charities such as Console damaged public confidence in the sector over the past decade, while ensuring stricter controls and regulation were introduced via heightened powers for the charities regulator.
The latest non-profit body beset by difficulties is one of the most trusted names in the homeless sector.
The financial troubles facing the Peter McVerry Trust first came to public attention when, in July, the charity informed the Department of Housing that it was facing serious cashflow problems, with big-five consultancy PWC then appointed to carry out a financial and governance review of the trust.
The Approved Housing Bodies Regulatory Authority (AHBRA) proceeded to launch a statutory investigation into the charity. An inspector was appointed to carry out a separate investigation, with the findings of this to be placed before the authority when it is complete.
All the signs indicate that the problems at the PMVT are a case of financial mismanagement rather than any malfeasance or unacceptable behaviour in high places.
But good intentions won’t make any difference if the reviews currently under way don’t go the way the charity would like.
A multi-million tax debt obligation owed to Revenue appears to be at the heart of the charity’s quandary, with the organisation confirming late last week that it currently owes the Commissioners some €8.3m in back taxes.
The trust said it had entered a phased payment arrangement with the tax authority, commencing in September of last year, and that it has yet to miss a payment.
Such a large debt could certainly give rise to the “cashflow problem”, as Fr McVerry described it on the same day, which is currently bedevilling the trust’s operations.
He insists that there is no evidence of fraud at the charity bearing his name.
Newry-born 79-year-old McVerry has worked for more than 40 years with the homeless and disadvantaged of Dublin. He has become a household name in recent years with the spiralling rates of inequality and homelessness seen in the capital in particular. He is secretary of the charity's board but draws no salary, expenses, or allowances from it.
From humble beginnings with a single property in 1983, the PMVT now employs 771 people and manages more than 600 properties, providing some 2,000 residential placements each night.
There are perhaps some indications of what has recently transpired in the charity’s most recently available accounts, those for 2021.
Income at the PMVT was down by roughly €7m on the year from €60.3m to €53.2m, primarily driven by a drop in undefined ‘other income’ of €7.2m.
At the same time, expenditure jumped by €3.5m for the year, creating a deficit of nearly €11m to start 2022.
In terms of staff salaries, the charity is not profligate. Of its 771 staff complement, just 12 senior managers earn more than €60,000 per year. One of them earns more than €110,000, the only employee to break the €100,000 salary mark. That list of relatively high earners remains unchanged from 2020.
Some 54 staff were added in 2021, with staff costs moving to €33m per year from €30.6m, giving an average salary at the organisation of just under €43,000, which is hardly extortionate.
Queries from the to the trust regarding the nature of its current cashflow, the timelines for its payment deal with Revenue, and how the charity’s cashflow issues had been allowed to snowball in the manner they have, were not answered last week.
Fr McVerry said on local radio on Thursday that the financial problems have come about because his charity had tried to help too many people, too fast.
He said the pandemic saw much of the trust's fundraising events cancelled and its income drop "substantially".
"So now we are having to pay back taxes along with our monthly tax liability for PAYE and PRSI for over 500 employees," he said in an interview with South East Radio.
One man seems to be the go-to problem-solver for charities in trouble in Ireland — David Hall, co-founder of the Irish Mortgage Holders Organisation.
Mr Hall was drafted in to oversee the winding-down of Console in 2016, and was chairman of Inner City Helping Homeless before stepping down in August 2021 amid the fallout from the allegations of sexual impropriety against its then-CEO Anthony Flynn.
He was posited by Francis Doherty as a possible addition to the board of PMVT who could help the charity to weather the current storm. Mr Hall indicated he would help, but the board said no.
"This situation is different, the services are very important, with an exceptionally dedicated and qualified staff,” Mr Hall told the .
“Whatever cashflow issues they have, they’re fine, they’re being dealt with, they’ve changed all that.
“These services must be protected at all costs.
“I just know that it would be an absolute tragedy and a travesty if this service and its users weren’t protected. Because, in the end, it’s vulnerable people being helped by those who actually give a fiddler’s about them.
“The whole thing is eminently salvageable with proper intervention.”
The Peter McVerry Trust may have become a household name in the context of Ireland’s seemingly endless housing crisis, but the charity is far from the only one providing aid to the homeless and destitute here.
The latest figures in emergency accommodation for August nationwide included 8,796 adults and 3,895 children, a new record high for the number of homeless children. Some €215m was allocated by the Government to fund homeless services in 2023.
The HSE lists almost 40 housing and outreach bodies it works with.
Those services are spread across the country, with the PMVT one of few operating on a national basis.
Among the better-known names in the sector are Focus Ireland; the eight separate Simon Communities; DePaul (which operates in both the North and South); and St Vincent De Paul, the largest charitable organisation on the island.
In Dublin, the Capuchin Centre, based in Smithfield, whose Cork-born founder Brother Kevin Crowley retired at the age of 87 last year, is renowned for the services it provides to the marginalised, including food parcels, clothing, and other supports, while Merchants Quay is one of the best-known services providing homeless and drugs supports.
Cork Foyer, Good Shepherd Cork, Cork Simon Community, Edel House, Cuanlee Refuge, and Penny Dinners Cork are amongst the services based on Leeside.
The McVerry Trust is not the only such charity to experience financial hardship in the current time of significant strain on the system, with Cork Simon reporting an “unprecedented” deficit of €750,000, in the words of its CEO Dermot Kavanagh, last year amid a surge in demand for its services.
“Sadly... things are going to get a little bit worse before they get better,” Mr Kavanagh said late last month.
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