What happens to your charity dollar

New Council to get Institutions of A Public Character to be more transparent

A new Council has been set up to work at getting Institutions of a Public Character (IPCs) to be more transparent and better governed.

2 Generous donations in 2002 saw over $380 million raised for the IPCs. Donors to these IPCs enjoy double tax deductions.

3 To support the growth of charitable giving, it is important that IPCs have in place good governance and best practices, and are transparent in fund raising as well as in managing the charity dollar.

4 The Council on Governance of IPCs, which was launched today, will work with the Ministry of Community Development and Sports (MCDS) and the Ministry of Finance (MOF) to improve the regulatory framework for IPCs.

5 It will look into minimum standards of governance as well as promote good governance for IPCs.

6 There are some 900 IPCs in Singapore, covering diverse community interests, including social welfare, arts and heritage, sports and environmental protection.

Terms of reference

7 The Council's Terms of Reference are as follows:

(i) To set up and promote minimum standards of governance for IPCs
(ii) To identify strategies and promote best practices in transparency, accountability and governance among IPCs
(iii) To identify obstacles that may hinder donations to IPCs, and strategies to overcome them
(iv) To grow a culture of informed giving among donors

Good governance and donor education

8 The Council is encouraged to note that donors today do seek accountability for the funds raised by the charities they support. The establishment of a Code of Best Practices for IPCs will better enable the donating public to enlarge the charity pie in Singapore.

9 "A high level of accountability and transparency will give confidence to donors," said Ms Lim Soo Hoon, Chairman of the Council.

10 "While the Council will look into standards of governance of IPCs, ultimately it falls on the donor to assess and decide which are the worthy charitable causes they wish to support", Ms Lim added. The Council will work with the National Volunteer and Philanthropy Centre, whose Chairman is also on the Council, to promote informed giving and encourage donor education by the IPCs.

11 The Council will seek public feedback as well as learn from countries such as the United States and the United Kingdom which have a stronger culture of giving. The Council will also learn from the social service sector which already has a code of governance in place.

Encouraging Donations to IPCs

12 Today, Government agencies are already working together to facilitate donations. For example, donors to IPCs do not need to retain their tax deduction receipts as the donations are already automatically captured in their tax returns, thanks to the Inland Revenue Authority of Singapore (IRAS).

13 Another example of an inter-agency initiative, which involved the Ministry of Finance, and supported by MCDS, IRAS and NCSS. is the posting of pertinent information on-line. IPCs and members of the public were consulted on the proposal to require IPCs to post their key financial and non-financial information on-line. Today, such information is available at IRAS' website. With more transparency on the use of charitable funds, the government hopes that donors will be more forthcoming with their donations to IPCs.

14 There are other possible areas of improvement. Today, organisations which would like to conduct fundraising events in public areas, for instance, have to apply for permits from several agencies. This is an area which the Council could provide its recommendations on how application processes could be streamlined for the convenience of IPCs.

Council composition

THE MINISTRY OF COMMUNITY DEVELOPMENT AND SPORTS & THE MINISTRY OF FINANCE