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Charities Work Towards Self-Regulation
Posted on Saturday, September 24, 2005 - 12:00 AM

Charities under the Ministry of Community Development, Youth and Sports in discussions with the Minister agree to strengthen public trust.

The a press release:-

Central Fund Administrators to support Charities

Some 300 charity chiefs had a fruitful dialogue with the Minister for Community Development, Youth and Sports, Dr Vivian Balakrishnan last night.

The Institutions of Public Character (IPC) under MCYS discussed various issues related to the governance and management of IPCs and how the charities could rally public trust and support for the sector.

The IPCs from the social service, sports, grassroots and youth sectors were present at the dialogue as well as their respective Central Fund Administrators (CFAs) − National Council of Social Service (NCSS), Singapore Sports Council (SSC), People's Association (PA) and National Youth Council (NYC).

Public attention had been focused on the charities in the past few months but the Minister was heartened to note that many IPCs had been proactively reviewing their internal processes during this period. They appreciated the need to be accountable and transparent to the donating public. Donation to an IPC is tax deductible.

Challenges Faced by IPCs

''The causes that they champion are admirable and we should salute their hard work. They face many challenges in meeting the demands of their beneficiaries and donors. Tonight's dialogue is a good forum to for the IPCs to share some of these challenges, and discuss how best to address them,'' Dr Balakrishnan said.

The IPCs agreed that the charity sector needed to improve transparency and accountability. They acknowledged having strong and effective boards as a critical step in this process, even though a few IPCs were finding it difficult to recruit good board members. This meant getting board members that have the passion to serve, and the relevant expertise to contribute to the boards. Board members would also need to appreciate the significance of their responsibilities, discharge their duties professionally and ensure that proper processes are put in place within their organisations. Some IPCs also pointed out that greater diversity within the board would help to strengthen board governance.

IPCs also found it a challenge balancing between hiring professional staff and paying them adequately, while keeping operation costs low. This took into account the observation that some members of the public still preferred to donate funds that go directly to the beneficiaries but not towards the salaries of staff even though the latter is equally important in helping IPCs deliver good and professional services to the beneficiaries.

Some IPCs also raised concerns over fundraising issues including flag days. Given the limited number of flag days in a year, NCSS encouraged voluntary welfare organisations (VWOs) to pair up and have joint flag days. Some IPCs noted that charities could go beyond flag days and be more creative in their fundraising methods. A few IPCs have for example established collaborations and diversified their target donor groups.

How CFAs can help

To help improve the competency of staff of IPCs, the Social Service Training Institute (SSTI), which run courses on administrative matters, such as board governance, financial management and fund-raising, would make relevant training courses available to IPCs in the social service sector as well as other sectors.

MCYS will also explore with the CFAs on how CFAs can strengthen their support for IPCs under their purview in accordance with the needs of each sector.

The IPCs agreed that self-regulation within each organisation and each sector would be the best approach going forward. Dr Balakrishnan said, ''I would encourage charities to work towards effective self-regulation. That is the hallmark of professionalism. The Government will be there to support you''.

"We will work with the CFAs to help and facilitate our charitable organizations through various forms of support. At the same time, we will set the minimum standards for operating in the charity sector, to maintain public trust and support".

''We prefer not to intervene with a heavy hand and determine how each IPC or VWO ought to be run. This would undermine the spirit of volunteerism. It also runs counter to our ''many helping hands'' approach that harnesses the passion and participation of the people sector. The Government will only step in when necessary, when self-regulation fails'', said Dr Balakrishnan.

Feedback on Governance and Management Issues

During the session, the IPCs also gave their views and feedback on areas of public concern over governance and management issues. This included potential conflict of interests and the disclosure of salaries of top executives. On the latter, IPCs felt that each Board should be left to exercise due diligence in deciding the top executives? remuneration, taking into account their performance and contributions, so long as it was accountable to the donors, clients and stakeholders. Within this context, most IPCs felt that the disclosure of top executive' remuneration could be left as a best practice.

The IPCs did not support introducing a ranking or rating system for charities at this stage. They agreed that the more important task was to ensure that proper systems were put in place to ensure effective service delivery, governance and accountability. The IPCs also urged the Government to help simplify the reporting requirements for the charity sector, noting that several Government agencies were involved, each playing different roles and requiring different information from the charities.

MCYS and the CFAs under it will take these views and feedback into consideration when reviewing how they can better support the development of the charitable sector.

Issued by: MINISTRY OF COMMUNITY DEVELOPMENT, YOUTH AND SPORTS
24 September 2005

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