Crowdfunding websites to get code on best practices

Move comes as such sites get more popular; code will require sites to check legitimacy of any appeals for funds

Minister for Culture, Community and Youth Grace Fu addressing the guests at the Charity and Transparency Awards at the Marriott Hotel on Nov 15, 2017.
Minister for Culture, Community and Youth Grace Fu addressing the guests at the Charity and Transparency Awards at the Marriott Hotel on Nov 15, 2017. ST PHOTO: DESMOND FOO

As crowd fund-raising websites gain popularity, the Commissioner of Charities (COC) is planning to produce a set of best practices for these platforms, to ensure a high level of trust and integrity in the charity sector.

The new Code of Practice will require the sites, among other things, to do due diligence to ensure the legitimacy of fund-raising appeals as well as ensure transparency by giving updates on donations received.

Talks are under way between the COC and key players to develop the code, which is likely to be ready in "a couple of months' time", said Minister for Culture, Community and Youth Grace Fu at the Charity Transparency and Governance Awards yesterday.

Ms Fu, noting people's call for greater regulation of these sites, said: "We would like to work with the industry on the level of regulation, so as not to impede the growth of this online sector but at the same time ensure the risks are managed."

The COC is not likely to make the code mandatory, she added.

She also said the COC's office will amend the Charities Act, including introducing suspension orders for improper fund-raising appeals.

Crowdfunding sites, such as Give.Asia and Simply Giving, have become more popular in the past few years, with people in dire straits appealing to the generosity of people.

Some have raised six-figure sums from thousands of donors. In one instance, the parents of three-year-old Xie Yujia, who was born with only part of her oesophagus, raised more than $1 million from 2015 to help her get specialist surgery in the United States.

However, there are some who have given inaccurate or incomplete information about themselves to get more donations or to abuse the system.

In May, a conman was reportedly raising funds on Give.Asia for a dead baby when the parents are not seeking donations. Give.Asia shut down the campaign and returned the money to the donors.

In July, the authorities said they would set the record straight - by sharing information about particular cases - should people give misleading or one-sided accounts when asking for help.

But even without the new code, fund-raisers, whether online or offline, are subject to basic regulatory requirements, Ms Fu said.

For example, they have to be transparent about how the money raised is used.

Crowdfunding sites welcome the new code, saying it provides a common set of best practices that industry players should adopt in an evolving charity landscape.

Ms Nikki Kinloch, chief executive of Simply Giving, said: "It can only be good for the public that they can trust and believe in the sector, as we will have common guidelines to follow.

"It also makes things very clear and open."

She said Simply Giving does as many checks as it can to ensure appeals are legitimate. For instance, it asks people for their hospital bills and medical records if they are raising funds to pay medical bills and gets details later of how the money was spent.

Mr Alfred Tan, chief executive of charity Singapore Children's Society, said the new code is a good start to prevent potential abuse.

He noted charities have to get an official permit to, for example, hold a flag day to raise funds. But those appealing on a crowdfunding site do not need a licence to do so.

At last night's event, two charities received the Charity Governance Awards for achieving the highest standards in governance: Gardens by the Bay and New Hope Community Services, which runs shelters for the homeless.

New Hope's founder pastor Andrew Khoo said it now has conflict of interest and whistle-blowing policies. Also, staff and board members declare yearly any conflict of interest and related party transactions.

In its earlier years, it did not have enough resources and the know-how to do it, he added.

•Additional reporting by Jose Hong

A version of this article appeared in the print edition of The Straits Times on November 16, 2017, with the headline 'Crowdfunding websites to get code on best practices'. Subscribe