The recent reports on business units of charities raise two questions (Half of 10 biggest charities here have business units, July 21).

Why are educational institutions like the National University of Singapore and Nanyang Technological University still considered charities with Institutions of A Public Character (IPC) status?

How are the huge reserves accumulated by these top 10 charities being managed?

Traditionally, the setting up of educational institutions was championed by the early philanthropists as they saw that providing accessibility to basic education was important to uplifting the disadvantaged and poor.

Donations to such causes were quite spontaneous. The Government, in wanting to encourage more of such giving to the education sector, extended tax exemption benefit to such donations.

However, in today's context, how much of the work of such institutions can still be considered charitable in the traditional sense of the word?

Perhaps the relevant authorities need to consider more stringent criteria in granting IPC status to such educational charities.

If they have business subsidiaries set up and these are able to support the mission of the parent organisation, should they not be more accurately classified as social enterprises?

As for the reserves, I agree with the principle of saving for a rainy day. Healthy reserves will help ensure continuity of our charities if donations were to drop drastically. But what could be done better perhaps is to ensure that those reserves are sufficiently guarded, as well as making sure better returns can be achieved by responsibly investing those reserves to achieve long-term sustainability.

Can we consider an equivalent of a GIC for the charities sector to play this important role?

Gwee Chen Teck