Commissioner of Charities gets more power to regulate fundraising appeals, sector

SINGAPORE – The Commissioner of Charities will receive new powers to regulate charities and fundraising appeals here, after the Charities (Amendment) Bill was passed in Parliament on Tuesday (Jan 9).

The changes are expected to take effect within the first half of the year.

Under the new laws, the Commissioner can permanently remove a governing board member or key officer of a charity who refuses to resign after he has been disqualified.

He can suspend improper fundraising appeals and also extend the suspension of unfit individuals from their positions in a charity.

If there is suspicion of misconduct or pending completion of investigations, the Commissioner will be able to suspend a fundraising appeal for up to two years.

Previously, such prohibition or restriction orders could only be imposed after investigations were completed.

The definition of “fundraising appeal” in the Act was also amended to reflect that all fundraising appeals, whether big or small, taking place online or offline, are subjected to regulation. The regulation includes providing clear and accurate information to donors, and managing and using donated monies responsibly.

Speaking during the debate on the Bill on Tuesday (Jan 9), Minister for Culture, Community and Youth Grace Fu said the Act was last amended in 2010, but the charity landscape has continued to evolve.

Nine Members of Parliament took part in the debate.

Some, such as Mr Melvin Yong (Tanjong Pagar) asked how the authorities would regulate online fundraising appeals while Ms Joan Pereira (Tanjong Pagar) called for a firmer stance on “soft deceptions”, or misleading information, provided.

Ms Fu said appeals conducted by individuals living overseas and that do not target Singaporean donors may not be regulated by the Commissioner.

Regulating online fundraising is “complex and difficult”, and her ministry will adopt a co-regulation approach with the sector. For instance, it is developing an Industry Code of Practice with major crowdfunding platforms here.

To counter money laundering and terrorism financing, persons convicted of an offence involving terrorism, terrorism financing or money-laundering will be disqualified from holding positions in a charity. MP Alex Yam (Marsiling-Yew Tee) asked if there have been such cases here.

Ms Fu said the authorities have not taken action against charities for such offences. But the Financial Action Task Force, an intergovernmental body, has seen over 100 cases worldwide of alleged abuse of charities for terrorism financing.

“The risk is therefore real and increasing and that is the reason for us to strengthen our legislation in this regard,” she said.

While the Act covers fundraising appeals from small bake sales to nationwide campaigns, the authorities are mindful to not stifle giving, said Ms Fu.

Her ministry is revising fundraising regulations and intends to exempt small-scale and private fundraising appeals from certain requirements, she said.

Responding to Nee Soon MP Louis Ng, she said the 80:20 collection rule for foreign charitable purposes will remain for now. The rule states that at least 80 per cent of the funds collected must go towards charitable purposes in Singapore, to ensure funds raised for overseas causes do not come at the expense of local needs.

The Commissioner, however, waives this rule on a case-by-case basis, such as for immediate humanitarian and disaster relief, she added.

The new laws will balance protection of charities with the rehabilitation of ex-offenders - a person will no longer be disqualified from holding a position in a charity once his conviction for a relevant offence is spent, or if he is granted a pardon.

But removals will be permanent. For example, a charity’s employee found to have mismanaged the charity’s assets will be permanently barred from returning as an employee and from holding key positions in any charity, said Ms Fu.

In her closing speech, Ms Fu also addressed calls by MP Denise Phua (Jalan Besar) and Nominated MP Chia Yong Yong to professionalise the sector.

For instance, the Commissioner works with the Centre for Non-profit Leadership to pair interested professionals with charities.