Breen, Oonagh B. --- "Holding the Line: Regulatory Challenges in Ireland and England when Business and Charity Collide" [2010] ELECD 676; in McGregor-Lowndes, Myles; O’Halloran, Kerry (eds), "Modernising Charity Law" (Edward Elgar Publishing, 2010)

Book Title: Modernising Charity Law

Editor(s): McGregor-Lowndes, Myles; O’Halloran, Kerry

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781849802505

Section: Chapter 6

Section Title: Holding the Line: Regulatory Challenges in Ireland and England when Business and Charity Collide

Author(s): Breen, Oonagh B.

Number of pages: 28

Extract:

6. Holding the line: regulatory
challenges in Ireland and England
when business and charity collide
Oonagh B. Breen1

INTRODUCTION

The debate on the legitimacy of charity involvement in business activities
is not new. Regardless of legal jurisdiction, similar perennial concerns
regarding the mingling of the nonprofit and for-profit spheres predomi-
nate. There are advocates on both sides of the charity­business divide
who argue for a complete separation of the two spheres from one another.
Those concerned with the purity of charitable mission argue that forays
by charities into the world of commercial activity constitute an unwar-
ranted distraction from the focus on achievement of charitable purpose.2
Given the risk involved with any profit-maximising venture, unregulated
charitable trading has the ability to threaten the security of a charity's
assets. On the business side of the line, the ability of charities to compete
with for-profit entities also raises the ire of private firms. The argument is
made that charities engaged in trade enjoy an unfair advantage over their
for-profit counterparts because of the corporate and other tax exemptions
afforded to charities. Thus, it is said that charitable forays into the busi-
ness sector, if not prohibited or at least regulated, unfairly distort competi-
tion in the market place. The state, too, has an iron in this particular fire
since the loss of any revenue caused by such trading, particularly when it
is at the expense of tax-paying private enterprises, results in a net loss ...