Singapore Charity Regulatory Framework. Modernising Charity Law Conference April 2009

Transcription

1 Singapore Charity Regulatory Framework Modernising Charity Law Conference April

2 Charities A charity is Defined under case law Advancement of religion Advancement of education Relief of poverty Other purposes beneficial to the community Meet other registration requirements About 1900 registered charities Benefits: Automatic income tax exemption & property tax exemption on premises used for exclusively charitable purposes 2

3 Institutions of a Public Character IPC is a status conferred onto a not-for-profit organisation of which donors will be granted income tax deductions for donations made to it. About 500 IPCs Generally IPCs have to be registered charities Beneficial to the community in Singapore as a whole & are not confined to sectional interests Benefit: 2.5 times tax deduction for cash donations & approved in-kind donations (i.e. computers, shares, artefacts, public sculptures, land & buildings) 3

4 Previous Regulatory Framework Ministry of Finance Commissioner of Charities (COC) Comptroller of Income Tax Assisted by 11 Central Fund Administrators - Have the industry knowledge to better evaluate IPC applications & assess the effectiveness of their services & programmes Regulate the charities under the Charities Act Regulate the Institutions of a Public Character under the Income Tax Act 4

5 Major Policy Change The COC, which earlier reported to the Minister for Finance, focused on tax issues related to charities & IPCs. Trend: Increasing number & diversity of charities, Greater public expectation towards charities being more transparent & accountable Need to ensure continued growth of the charitable sector & maintain public confidence Hence need to go beyond tax issues to focus on the governance of charities & IPCs 5

6 Major Policy Change Greater powers given to COC to act for protection of charities & public interest Make orders on the application of the property of a charity under certain circumstances Prohibit, stop or restrict public fund-raising by a charity or person so as to protect public interest Regulate the conduct of public fund-raising Tighten registration of charities Increase the composition sums 6

7 New Regulatory Model (from Sep 2006) Commissioner of Charities (COC) (Under the purview of Ministry of Community Development, Youth and Sports) 6 Sector Administrators (Overseeing charities and IPCs under their sectors purview) Charities & IPCs that do not fall under any of the 6 Sector Administrators Ministry of Information, Communications and the Arts : Arts and Heritage Ministry of Education : Education Ministry of Health: Healthcare National Council of Social Service : Social Service / Welfare People's Association : Community Singapore Sports Council : Sports Charity Council Led by people sector representatives Objectives Promoter Promote good governance standards & best practices in the charity sector Enabler Help build the capabilities of charities to enable them to comply with regulatory requirements & to be more accountable to the public Advisor Advise the COC on key regulatory issues & proposals that have broadranging impact on the charity sector 7

8 Guiding Principles Nurture a charitable sector that remains driven by the community; basic set of rules will not be onerous & stifle volunteerism, but will be enforced strictly to maintain public confidence. Boards of charities & IPCs are ultimately responsible for the charities & should take ownership to improve their governance. Self-regulation within the charity sector; greater disclosure to promote informed giving by the public. Regulatory framework should not be one-size-fits-all. 8

9 Vision & Strategies Vision A well-governed and thriving charity sector with strong public support Strategies (1) Ensure regulatory compliance (2) Promote good governance & best practices (3) Be a proactive charity advisory 9

10 Strategy 1: Ensure Regulatory Compliance COC will regulate charities & IPCs, with the help of Sector Administrators Monitor thru annual reports & financial statements Track the delivery of services/programmes/activities to ensure that the charities deliver benefits to achieve the charitable purposes Ensure resources are used for charitable purposes Conduct audit on large charities & IPCs Risk-based approach priority is to assess regulatory compliance of large charities & IPCs first Investigate into complaints 10

11 Strategy 1: Ensure Regulatory Compliance COC also regulates fund-raising in Singapore: Foreign charitable causes A permit is required Conditions imposed to ensure proper solicitation & usage of donations Local charitable causes Set of fund-raising guidelines for any persons conducting public fund-raising appeals Police permit for House-to-house & Street Collections; other permits if required 11

12 Strategy 2: Promote Good Governance & Best Practices Code of Governance Sets out the principles & best practices in key areas of governance & management Required online submission to regulators on extent of compliance with the Code Field Visits Helps regulators to understand the charities business & advise them on ways to improve their governance Funding Support $45m capability fund to co-fund cost of capability-building in charities through use of ICT, consultancy & training 12

13 Strategy 3: Be a Proactive Charity Advisory Charity Council Led by people sector to promote good governance & best practices Also advises the COC on key regulatory issues & proposals which may have broad-ranging impact on charity sector Released its inaugural Charity Governance Report in Feb 2009 Charity Portal One-stop online portal to facilitate e-registration of charities/ IPCs One-stop resource for charities, donors & general public to obtain information on charities, charity regulations, regulatory guidance, etc. 13

14 Positive Outcomes Achieved Governance Evaluation Checklist 81% (1,500) charities & IPCs have submitted Median governance evaluation score is 87% State of governance in charity sector is good, above expectations Public confidence in charities are rising Public Confidence Public confidence in charities has increased from 83% in 2006 to 90% in 2008 *Source: NVPC Individual Giving Survey

15 Upcoming Changes to Charities Act Provide clarity on the roles & responsibilities of board members & protect them from personal liability if they have acted honestly and in good faith Provide power to regulate IPCs more effectively Enhance regulatory oversight on fund-raising, including requiring any fundraisers, not just charities & IPCs, to furnish the COC with information necessary for the investigation into complaints pertaining to fund-raising Streamline accounting standards & reports to make them more relevant for charities to improve disclosure & transparency 15