Stricter regulation of charities, online fund-raisers

Commissioner of Charities gets more powers, such as suspending fund-raisers under probe

The Commissioner of Charities will be able to suspend fund-raising appeals in which fund-raisers lie about beneficiaries' circumstances or about how donations will be used, for instance, under changes to the Charities Act passed yesterday.

Such appeals can be stopped even before investigations are complete, and for up to two years, as long as there are grounds to suggest they are improper.

These enhanced powers come as Parliament agreed to amend the laws and regulations governing charities, to keep up with an evolving charities landscape that has seen more fund-raising appeals done online.

Minister for Culture, Community and Youth Grace Fu cited a recent appeal that raised $1.2 million to pay for surgery for a baby girl who was born without part of her oesophagus.

She said such cases underscore the need for a regulatory regime that promotes greater transparency and accountability, adding that it is necessary to maintain a high level of trust and integrity in the sector.

Under the changes to the law and its subsidiary legislation, charities will have to comply with more stringent requirements, such as filing annual reports online and keeping documents like accounting records for at least five years.

The law also makes clear that all fund-raising appeals for charitable, benevolent or philanthropic purposes, whether big or small, online or offline, are subject to regulation.

 

The issue of online crowdfunding was raised by almost all of the nine MPs who spoke during the debate, with some like Mr Melvin Yong (Tanjong Pagar GRC) asking what the Government is doing to ensure that funds raised from such efforts go to the intended beneficiaries.

Ms Fu said the Government takes a "co-regulation" approach, and will nudge crowdfunding platforms to comply with an upcoming code of practice.

While the code is not mandatory, the Commissioner will publish a list of compliant platforms and encourage the public to donate through these sites, she said.

Nominated MP Chia Yong Yong and Ms Denise Phua (Jalan Besar GRC), both of whom are involved in non-profit organisations, raised concerns that the new requirements may be too onerous for smaller charities and could burden them with compliance costs.

Under regulations that will be introduced under the amended Act, all charities will have to file their annual reports and financial statements electronically.

They called for more support to be given to these charities, with Ms Phua suggesting an Industry Transformation Map that addresses the different needs and priorities of charities based on their areas of focus rather than the size of their budgets.

In response, Ms Fu said that only larger charities and Institutions of a Public Character (IPCs) will be expected to meet the more stringent disclosure requirements in line with accounting standards, for instance.

She added that the Commissioner is looking at how to simplify the process of preparing the annual reports, and is working with partners to set up shared services that charities can tap.

The debate on charities also touched on terrorism, with the law stating that people who are found to have participated in terrorism financing can be disqualified from leadership positions in charities.

Nominated MP K. Thanaletchimi asked if there was a real risk of this happening.

To this, Ms Fu said the intergovernmental Financial Action Task Force, of which Singapore is a member, had found over 100 cases worldwide of charities allegedly being abused for terrorism financing.

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A version of this article appeared in the print edition of The Straits Times on January 10, 2018, with the headline 'Stricter regulation of charities, online fund-raisers'. Print Edition | Subscribe