SINGAPORE - As crowd fund-raising websites become a more popular way of raising funds, the Commissioner of Charities (COC) is working on a set of best practices for these platforms to follow to ensure a high level of trust and integrity in the charity sector.
The new Code of Practice will highlight the recommended practices for crowdfunding sites, such as conducting due diligence to ensure the legitimacy of fund-raising appeals and ensuring transparency by providing status updates on donations received, among other things.
The COC is in talks with 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 on Wednesday night (Nov 15).
Ms Fu, who noted that the public is calling for more regulation of these sites, said: "We hope by having an industry code of practice, we can strengthen the intermediaries so that they can be a trusted intermediary in the charity sector. 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 said. She also highlighted that the COC's office will amend the Charities Act, by introducing suspension orders for improper fund-raising appeals, among other amendments.
A handful of crowdfunding sites, such as Give.Asia and Simply Giving, have become more popular in the past few years with people facing tough times appealing to public generosity.
Some have raised six-figure sums from thousands of donors. They include the parents of Xie Yujia, three, who have raised more than $1 million since 2015 to help the girl born without part of her oesophagus to get specialist surgery in the United States.
But it has also emerged that some have given inaccurate or incomplete information about themselves to garner more donations, or abuse the system. In May, it was reported that Give.Asia found that a conman was raising funds for a dead baby when the parents were not seeking donations. It shut the fund-raising campaign and refunded the donations.
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, all fund-raisers, either online or offline, are subject to basic regulatory requirements, Ms Fu stressed. For example, fund-raisers have to be transparent about how funds raised are used.
Crowdfunding sites welcome the new code, as 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 already does as many checks as it can to ensure that appeals are legitimate, for example, by asking people for their hospital bills and medical records if they are raising funds to pay medical bills and getting details later of how the money was spent.
Mr Alfred Tan, chief executive of the Singapore Children's Society, a charity, said the new code is a good start to prevent potential abuse. He pointed out that charities have to get a permit from the authorities to, for example, hold a flag day to raise funds, but those appealing for money through crowdfunding do not need a licence to do so.
At Wednesday's awards at the Marriott Hotel, two charities received the Charity Governance Awards for achieving the highest standards in governance. They are Gardens by the Bay and New Hope Community Services, which runs shelters for the homeless.
New Hope's founder pastor Andrew Khoo said the charity has put in place conflict of interest and whistle-blowing policies, and all staff and board members declare yearly if there are any conflict of interest and related party transactions.
He said: "In the earlier years, there were many difficulties implementing strong governance policies, largely due to a lack of resources and know-how. We eventually overcame them. Good governance is a never-ending journey."