Commissioner Of Charities Proposes Tighter Rules For Charities
Posted on Friday, November 24, 2006 - 05:00 PM
Rules on registering charities are to be tightened with powers to the Commissioner of Charities (COC) to reject a new charity application and de-register existing ones. The proposals are open for public feedback at www.reach.gov.sg.
Details of the Proposals are as follows:-
TIGHTENING REGISTRATION OF CHARITIES
CURRENT CHARITY REGISTRATION REQUIREMENTS
1. Currently under the Charities Act, it is mandatory for an organisation which is set up exclusively for charitable purposes to be registered with the Commissioner of Charities (COC) within three months of its establishment. The organisation has to submit an application form which captures basic information on the organisation. This includes information on the charity's objects, activities and particulars (1) of the charity trustees. They will also have to submit their governing instrument (i.e. Memorandum and Articles of Association, Constitution, Trust Deed, etc.) and the latest set of audited Statements of Accounts (2) if available. If the governing instrument and the relevant documents are in order, the COC's office will proceed to approve the registration. Subsequently the charity trustee is notified of the application outcome along with the charity registration number.
2. To ensure only bona fide organisations are registered as charities, the COC's office is putting forth the following proposals to tighten the charity registration process. In making these proposals, the COC's office is mindful of the need to refrain from over-regulation so as not to stifle the charity sector.
PROPOSALS
Proposal 1: Increase the rigour of assessment of charity applications
Enhanced Registration Form Requirements (Currently on trial - refer to Annex A)
3. Currently an organisation provides only basic information at the point of registration. While this ensures ease of registration, it does not enable the COC's office to conduct a more thorough evaluation of the application. Hence it is proposed that the charity registration form be expanded to include the following additional information:
i. Declaration of trustees' age, occupation, previous experience in running a charity and relevant qualifications (e.g. highest academic qualification obtained) - As trustees have the general control and management of the administration of the charity, it is important to ascertain their general background to assess their suitability.
ii. Declaration of any remuneration or benefit received by the trustees directly or indirectly from the charity - Generally, charity trustees are not expected to receive any salary in respect of their voluntary services as trustees. However, they may be reimbursed reasonable and out-of-pocket expenses from the charity's income. A charity trustee should therefore declare this information if he/she is in a position where any personal interest may conflict with his/her role as a charity trustee.
iii. More information on the charity's activities (which also include their fund-raising plans) and disbursement plans for public funds raised - With charities becoming more complex, there is a need for the COC's office to understand in more detail the nature of their plans and activities. For example, charities planning to raise funds from the public should show how they intend to use the funds in accordance to their intended charitable purposes and not hoard them.
Developing guidelines on the use of names for new charities
4. Currently, the Registry of Societies (ROS) and Accounting and Corporate Regulatory Authority (ACRA) have guidelines on names of societies, companies and businesses. These include a list of words that cannot be used in the name of a society without the prior approval and support from the relevant authorities (refer to Annex B). These include "Singapore" and "National". The guidelines also disallow vulgar, undesirable names or names already in use by another business or organisation.
5. To prevent the misuse of certain words that will convey the wrong impression to the public, it is proposed that additional guidelines be developed to tighten the approval of names of new charities. They are as follows:
i. Allow the use of the word "Foundation" only if the organisation is financed by a donation or legacy to aid the organisation's intended charitable purposes or an endowment for such organisation; and
ii. Allow the use of word "International" only if the organisation has objects and activities serving beyond local geographical boundaries.
Alerting new charities of similar services or names with existing charities
6. To ensure more efficient use of charitable resources in the charity sector, it is proposed that the COC's office alert new applicants on possible overlaps in services or names with existing charities before assessing their applications. The COC's office will advise the applicant, for instance, to reconsider its governing instrument if the objects and activities are similar to that of an existing charity or to collaborate with other existing charities.
Assessing the trustees' capability before allowing multiple registrations
7. For multiple registration applications submitted by an individual trustee or a group of trustees, the COC's office will assess the trustees' experience based on the regulatory performance of their previous charity or charities if any. For trustees with no prior experience, the COC's office may interview them to seek further clarifications.
Proposal 2: Monitor newly registered charities more closely
8. It is proposed that newly registered charities be required to submit semi-annual reports during the first year of their operations. These reports are not full-scale financial reports but requests for information or clarifications by the COC specific to the charity.
Proposal 3: Specify conditions for registration and de-registration
9. Currently, any organisation set up for charitable purposes must register itself as a charity with the COC within three months of the charity's establishment. The COC cannot refuse registration of organisations set up exclusively for charitable purposes. This may inadvertently lead to suspect organisations getting registered.
10. Hence the COC will be given discretionary powers to refuse registration of applicants as charities and to de-register (3) existing charities. Annex C specifies the set of conditions by which the COC can refuse registration of an applicant and to de-register an existing charity.
CONCLUSION
11. The COC's office will like to seek public feedback on the above proposals, including Annex C, to tighten the registration of charities. Kindly provide your comments in the feedback form below.
Attachments (can be found at www.reach.gov.sg)
Annex A - Enhanced Charity Registration Form
Annex B - Guidelines on the use of names of societies by the Registry of Societies
Annex C - Proposed conditions by which the COC can refuse registration of a new charity or de-register an existing charity
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(1) Names, I.C No., address, position held in committee, date of appointment
(2) This is applicable only to organisation which have already been operating for some time.
(3) Under S5(3) of the current Charities Act, a charity can only be de-registered if there is a change in its purposes, or if it does not exist anymore, or if it has ceased to operate.
May 17, 2008 - 05:28 PM
Public Access
