The Straits Times says

Holding charities to high standards

The guidelines proposed to improve the governance of charities ought to be welcomed as the sector handles vast sums of money. Tax-deductible donations came to about $1.4 billion last year, propelled by the 300 per cent tax deduction allowed for the Golden Jubilee. Total annual receipts (including government grants) amounted to $14.6 billion.

With a steadily growing pool of registered charities (now over 2,200) one cannot rely on a sense of responsibility alone to ensure that the duty of care is exercised diligently and office holders are faithful to the charity's mission. At a basic level, for example, one would expect those at the helm to refrain from paying themselves excessively. That was an issue in Britain when the Charity Commission's chief called into question "disproportionate salaries", while others asserted "charities shouldn't be ashamed of paying people what they are worth". In America, it is said there are "too many charities" chasing the same pool of donors, leading to higher costs of fund raising that might not be fully disclosed.

It is to avert these and other risks in the charity sector that its code of governance deserves to be tightened. Excessive red tape, of course, could weigh down organisations but high standards of governance should never be compromised. Risks can abound when management is weak or dominated by a few individuals, there is no ceiling on how long board members can remain in office, and no transparency on how they are performing their duties.

Public views are being sought for the latest refinements to the code. Whatever views are expressed about the nature of the new guidelines, few would contest the objectives of the code. These are to help charities become more efficient and effective by sharing good practices, ensure board members conduct themselves properly, and boost public confidence in charitable bodies.

Given the diversity within the sector, the guidelines are applied differentially across groups. Over half of charities are relatively small and almost as many have a religious character, which might make internal and external oversight difficult. Whatever their characteristics, it is incumbent on all charities to abide by the spirit of the entire code. Alongside the attention given to their strategic direction, financial planning, compensation policies and fund-raising practices, there should also be adequate disclosure of all dealings. Public generosity calls for a high standard of integrity to be demonstrated by all charities to ensure that donors' good intentions are delivered upon. According to the World Giving Index, almost six in 10 Singaporean donate to good causes. However, fewer than three in 10 serve as volunteers. By raising their game, charities could inspire more to contribute and play an active role in them.

A version of this article appeared in the print edition of The Straits Times on September 21, 2016, with the headline 'Holding charities to high standards'. Print Edition | Subscribe