Charities can find balance between mission and business

A person making a donation in Yishun.
A person making a donation in Yishun.PHOTO: ST FILE

While I agree with the Commissioner of Charities' close monitoring of charities that venture into business, and the need to keep an arm's length between the business entity and the charity, there is no need for alarm as long as a balance can be found (Watchdog to keep an eye on charities that run businesses, June 19).

Financial sustainability continues to be a big question mark for charities, which need to be strong in their mission clarity, operational health and financial sustainability, and board governance.

Many charities struggle with one or more of these three key areas, in particular by being so mission-focused that they neglect operations and sustainability.

Charities need to look into other sources of revenue that are not limited to donations. One such plausible alternative is by setting up their own business entity.

The crux of the concern is in charities getting distracted from their primary social mission.

If revenue-producing activities are given disproportionate attention to boost self-sustainability, the Government and public good could take a back seat. This concern is understandable.

The best solution to the tension created from a dual commitment to social impact and financial self-sustainability seems to be to construct an integrated double bottom line.

Increased social impact can correlate to increased earned income.

While charities should fully leverage the grants and funds provided, setting a monthly or yearly percentage limit on the revenue allocated for charity objectives would give charities more financial flexibility.

Running a charity is no mean feat; it requires dedication, passion and hard work to achieve set goals. Charity organisations struggle to attract the right staff with the right heart and right skill set.

No matter their size, charities have two aims. One is to reach out to society in some way, be it big or small, and the other is to reduce their dependence on grants and donations.

They constantly ask themselves if there is a better way of generating surpluses, such as by improving fund-raising operations, and whether it is within the organisation's financial model to start a business subsidiary to sustain the cost of being a charity.

Keeping an arm's length between a charity and its business subsidiary is vital in safeguarding the charity's integrity. It is important for organisations and the Commissioner of Charities to weigh this policy, sustainability and conflicts of interest.

Delane Lim

A version of this article appeared in the print edition of The Straits Times on June 25, 2019, with the headline 'Charities can find balance between mission and business'. Print Edition | Subscribe