Published on: March 21, 2012
Commissioner of Charities Annual Report 2010
COMMISSIONER OF CHARITIES ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2010
Message from the Commissioner 1
Vision and Strategies 2
Overview of the Charity Sector 3
Major Developments in 2010 4
Looking Ahead 5
MESSAGE FROM THE COMMISSIONER
2010 saw an encouraging rise in public donations as the economy recovers. Total tax deductible donations to Institutions of a Public Character (IPCs) amounted to $776 million in 2010, an increase of 13% over 2009.
In 2010, we also made amendments to the Charities Act, bearing in mind the need to provide a balanced regulatory framework to facilitate the good work of the sector and to enable the public to continue to donate with confidence. The amendments were made to serve three purposes:
1. To facilitate the work of charities and charity board members, by providing clarity on their roles and responsibilities and to protect them from personal liability if they have acted honestly and in good faith. It is our hope that this will encourage more good and capable individuals to step forward and serve in the sector.
2. To enhance the accountability and governance in the charity sector, by
establishing a broad legislative framework to put in place accounting and
reporting standards for charities and IPCs.
3. To strengthen charity regulations in order to better protect donating public and maintain public confidence in the charity sector. For instance, we introduced a new provision in the Charities Act to penalise those who misrepresent themselves as registered charities or IPCs to gain support from the public.
We continued our efforts to strengthen charities’ governance capabilities.
Together with the Sector Administrators, we carried out 60 governance reviews over the past year to help charities and IPCs identify governance gaps, and develop implementation plans to address them. These were well-received by the charities and IPCs, which took steps to implement the recommendations made. We also conducted 52 field visits, and held small-group dialogue sessions with charities in 2010, to promote good governance practices, and to better understand their charitable work and the issues they face on the ground.
We worked with the Charity Council to refine the Code of Governance,
making them clearer and more relevant to charities. The majority of charities have enhanced their board governance practices, with improvements in their internal controls and processes.
These changes and initiatives have helped charities to be more effective, transparent and accountable to their stakeholders, and enabled the public to continue to donate with confidence. I urge all charities to keep up their good work and I encourage donors to continue to exercise generosity and discernment in their giving. Together, we can create a thriving charity sector with strong public trust and support.
Low Puk Yeong
Commissioner of Charities
VISION AND STRATEGIES
2. Our Vision is “A well-governed and thriving charity sector with strong public
3. To achieve our vision, we adopt the following strategies:
(i): Promote Good Governance
We help build governance capabilities of charity board members so that they can exercise sound and responsible stewardship of public resources in fulfilling the objects of the charities.
(ii): Ensure Regulatory Relevance and Compliance
We regularly review our regulatory framework to ensure it is relevant and meets the evolving needs of the charity sector. Rules and regulations are also tiered according to the size of charities, with larger charities subjected to more stringent rules compared to smaller ones. The Commissioner of Charities and the Sector Administrators1 also work closely with charities and IPCs to ensure that they are able to fulfil their regulatory obligations.
(iii): Be a Proactive Charity Advisory
We strive to be a transparent and responsive regulator who actively advises the public and charities on issues affecting the charity sector. We aim to improve the access to information by the charities as well as the public, to facilitate their work and giving.
1 Five Sector Administrators assist the Commissioner of Charities to oversee the charities and IPCs in their various sectors i.e. The Ministry of Education, the Ministry of Health, the Ministry of Information, Communications and the Arts, People’s Association and the Singapore Sports Council oversee the charities and IPCs in the education, health, arts and heritage, community and sports sectors respectively.
OVERVIEW OF THE CHARITY SECTOR
4. Any organisation established for exclusively charitable purposes and carries out activities to achieve these purposes must apply for registration with the Commissioner of Charities. We recognise the following categories of charitable purposes:
a) the relief of poverty;
b) the advancement of education;
c) the advancement of religion; and
d) other purposes beneficial to the community. The following purposes are potentially charitable if they benefit the community:
i. the promotion of health;
ii. the advancement of citizenship or community development;
iii. the advancement of arts, heritage or science;
iv. the advancement of environmental protection or improvement;
v. the relief of those in need by reason of youth, age, ill-health,
disability, financial hardship or other disadvantages;
vi. the advancement of animal welfare; and
vii. the advancement of sport, where the sport promotes health
through physical skill and exertion.
5. In 2010, we registered a total of 73 new charities while de-registering 18 charities, bringing the number of registered charities as at 31 December 2010 to 2,028. The breakdown of registered charities in the different sectors is shown in Table 1 below.
Table 1: Registered Charities by Charitable Purposes
6. Based on financial statements submitted by ended for their financial years ended in 20092 , the total income of the charity sector (which includes fees for services rendered, donations and government grant) amount to $9.4 billion. There were 104 large charities with annual income above $10 million as compared to 98 in the previous year. These were mainly tertiary education institutions, health institution, voluntary welfare organizations and religious organizations. They collectively accounted for 84% of the total income of the charity sector. On the other hand, charities with annual income of less than $250,000 made up 42% of the charity population and accounted for less than 1% of the total income of the charity sector. Figures 1 and 2 show the distribution of charities by income level, and the distribution of total charity sector income by charity size respectively.
Figure 1: Distribution of Charities by Income Level (Annual Receipts in 20093)
Figure 2: Distribution of Total Income by Charity Size (Annual Receipts in 2009)
Institutions of a Public Character
7. The Institution of a Public Character (IPC) is a status conferred onto a not-for profit organisation serving the needs of local communities, which allows the issuance of tax-deductible receipts for donations made to it. To support greater charitable giving amidst the economic crisis, the tax deduction for donations made in 2009 was increased from 200% to 250%4. This increase was extended for another 5 years from 2011 to continue to encourage greater giving.
8. As of 31 December 2010, there were 5425 approved IPCs. Figure 3 shows the number of IPCs in the different sectors.
Figure 3: Number of IPCs by Sector
9. The total value of the tax deductible donations received in 2010 is about $776 million, which is approximately an increase of 13% from the amount received in 2009. These donations were all given in aid to local charitable causes.
10. Corporate and individual donations rose by 13% and 12% respectively, compared to the previous year. Figures 4 and 5 show the distribution of tax deductible donations received by source and by sector respectively. The education, social services and health sectors accounted for 86% of the donations. The health and social services sectors also experienced the highest increase in the amount of tax deductible donations received with an increase of 50% and 17% respectively. Details on the change in amount of tax deductible donations by sector are shown in Figure 6. Figure 7 shows the amount of tax deductible donations received over the past years.
Figure 4: Distribution of Tax Deductible Donations by Source
Figure 5: Distribution of Tax Deductible Donations by Sector (S$m)
Figure 6: Change in Amount of Tax Deductible Donations by Sectors
Figure 7: Trend of Tax Deductible Donations received by IPCs
Fund-Raising Appeals for Foreign Charitable Causes
11. In addition to the amount raised for local charitable causes, about $23.1 million was raised for foreign charitable purposes in 2010, slightly less than the amount of $25.6 million in 2009. A total of 80 foreign fund-raising permits were granted in 2010. 36 of them were granted for efforts in aid of victims of natural disasters e.g. the Haiti Earthquake and Flooding in Pakistan. Permits were also granted for foreign charitable causes such as the UN World Food Programme, environmental conservation efforts and humanitarian projects including the construction of hospitals and schools.
2 Financial year ends vary between charities. Figures from charities for financial years ended in 2009 were used as charities are given up to 6 months from the end of the financial year to submit their statement of accounts.
3 This refers to registered charities which had submitted their FY 2009 statement of accounts as at the time of this report.
4 This means for every $100 a donor gives to an IPC, $250 of his/her taxable income would not be taxed.
5 Figures exclude the schools under the Ministry of Education and individual building funds under the People’s Association Community Clubs Building Fund (PA CCBF).
MAJOR DEVELOPMENTS IN 2010
Promote Good Governance
Refinement of the Code of Governance
12. Over the past year, we worked with the Charity Council to refine the Code of Governance and Governance Evaluation Checklist. The refined Code and Checklist were published in January 2011, and came into effect on 1 April 2011. First developed in 2007, the Code serves as the benchmark of good governance for the charity sector. The refinement exercise was led by a Charity Council Sub-Committee and three workgroups comprising representatives from charities, grant-makers, professional bodies, auditors and academics. A dialogue session with charities was also held to consult them on the Code refinements. Overall, the refined Code is now clearer, more relevant and easier to understand. The requirements were also made simpler for small charities.
Shared Services for Charities and IPCs
13. In September 2009, the Charity Council launched a pilot Shared Services Programme called the Integrated Shared Services for Excellence (iServe) to deliver finance, accounting, payroll and procurement shared services to the charity sector. By outsourcing their finance and accounting functions to a professional provider6, charities can focus on building their governance capabilities and delivering their core programmes. As of March 2011, 28 organisations have signed up for iServe. We will continue to support the Charity Council in promoting shared services to the charity sector.
Engaging the Professional Community
14. We also continued our support to the Charity Council in its engagement of professional associations to encourage their members to volunteer in the charity sector. Since 2009, the Council has been partnering the Centre for Non-Profit Leadership (CNPL) and The Kind Exchange to match professionals interested to serve on charity boards or volunteer their pro-bono services. Through CNPL’s Board Match programme, 90 professionals have been matched to 42 charities that required volunteer board and committee members.
The VWOs-Charities Capability Fund
15. The VWOs-C