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With the rule eased, most charities will find it much easier to comply with fund-raising regulations.
The 30/70 rule, as it is commonly known, states that fundraising expenses cannot exceed 30 per cent of donations collected through fund-raisers in a year.
The rule keeps charities on their feet, so that the bulk of donations collected goes to beneficiaries, instead of paying off fund-raising bills.
However, some charities found it hard to meet this rule and took their concerns to the Charity Council, the panel of experts advising the Charities Commissioner.
Council chairman Fang Ai Lian on Tuesday said the 30/70 rule has been changed to make it 'fairer' for charities.
'We have even heard of charities rejecting donated items as these in-kind donations would bust their ability to follow the 30/70 rule,' she added.
The revised rule, which will apply to fund-raising events for charities and Institutions of Public Character (IPCs) whose financial year ends after March 31 excludes:
Take for example, charities selling cookies to raise funds. If the cost of a bag of cookies is $10, the charity has to sell the cookies for at least $35 to meet the 30/70 rule.
With the change, the cost of the cookies is not counted as fund-raising expenses, so charities will not have to raise prices to 'unrealistic' levels to meet the 30/70 rule, said the Commissioner of Charities' Office.
This will help them sell their fund-raising merchandise at more competitive rates and ring in more sales.
To ensure transparency and accountability, which the Council is actively promoting, charities must disclose all sponsorships received in their financial statements.
The Commissioner's Office also said that the change is not a relaxation in governance standards for charities, but to address charities' feedback on the practical difficulties they face in fund-raising.
