Expenses of fund raising have to be below 30% of gross receipts

We thank Mr Woon Bee Chai for his letter (How much of donations actually go to charity?; Forum Online, May 26).

All charities and Institutions of a Public Character (IPCs) are required to keep their fund-raising efficiency ratio below 30 per cent.

This means that the total fund-raising expenses must stay below 30 per cent of the total gross receipts from fund raising and sponsorships of the charity or IPC for that financial year.

The fund-raising expenses would include payments made to commercial fund raisers engaged by the charity.

Should a commercial fund raiser be engaged for a charitable cause, the commercial fund raiser should ensure it has a written agreement with the beneficiary charity before beginning to solicit funds.

The agreement must contain, among other information, the fund-raising method, percentage of proceeds that will go to the charity and fees of the fund raiser.

Commercial fund raisers and commercial participants need to also meet the following obligations towards donors:

•Provide accurate information to donors or to the public

•Disclose the name of their organisation, intended use of funds raised (including the cause and/or beneficiaries) and whether any commercial fund raiser has been engaged in soliciting the donation

•Ensure that all solicitation and publicity materials are accompanied by a written statement containing the proportion of total proceeds that will go to charitable cause, a breakdown of proceeds to each charity (if funds are raised for more than one charity), the name of the commercial fund raiser or commercial participants and its status as a commercial entity, and how the fund raiser/participants remuneration is calculated

The principles of transparency and accountability are paramount. More information on fund raising as a commercial fund raiser can be found on the Charity Portal.

Members of the public should remain vigilant and be discerning in responding to public appeals, to avoid falling victim to improper fund-raising activities.

When in doubt, the public should find out more from the fund raisers before making a contribution. At no time should anyone feel pressured to give.

The public should report to the Office of the Commissioner of Charities if they have any reason to believe that a fund raiser may have violated the Fund-Raising Regulations. If fraud or scams are suspected, the public should make a police report immediately.

Ang Hak Seng (Dr)
Commissioner of Charities

A version of this article appeared in the print edition of The Straits Times on June 01, 2017, with the headline 'Expenses of fund raising have to be below 30% of gross receipts'. Print Edition | Subscribe