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Our charity sector : Uniquely Singapore – F1 or F9?

This is the first of a series of articles by Leong Sze Hian looking at 9 issues which should matter to Singaporeans. We start with the charity sector in Singapore.

The charity sector has taken a beating since the revelation of the dubious, some would say corrupt, happenings in the NKF under TT Durai.

The latest incident of ex-NKF chairman Richard Yong absconding has further fueled angry sentiments among Singaporeans.

Singaporeans, to their great credit, are a generous people. From donations to our neighbouring countries which were devastated by various disasters, to individual Singaporeans who give of themselves quietly and without fanfare, Singaporeans should be commended for their selfless spirit.

Perhaps it is precisely because Singaporeans are so selfless that the fall-out from the NKF incident has hit hard. Thus, it is time to look at (and re-look) some of the issues which may need some precautionary actions and address these so that the needy can be better helped.

Here are the first 3 issues on charity in Singapore.

F1. February 2006 More focused on raising money or helping needy?

The feedback group on health matters has suggested that a new central charity fund be set up to raise and distribute funds to medical charities, to allow 'staff to focus on helping the needy and not be distracted by having to raise money, as in the case of the NKF'.

The health minister said at the annual conference of feedback groups in January 2006, that Singapore has one of 'the best health-care financing in the world' which others are copying and that 'people in the lower-income group don't have to worry, although I know they worry'.

According to the Department of Statistics, expenditure on healthcare had the highest increase among all items of household expenditure.

The lowest 20 per cent of households by income spent 6.7 per cent in 2004 compared with 3.7 per cent in 1998. This is an increase of 81 per cent or 10.4 per cent per annum, compared with inflation of only 1.7 per cent.

Meanwhile, the increase among the highest 20 per cent of households was smaller, 55 per cent or 7.6 per cent per annum. Healthcare's share of spending went up to 4.8 per cent from 3.1 per cent.

Why is it that our healthcare policy and system have resulted in the poorest being burdened with paying 47 per cent (81 divided by 55) more relative to the rich?

On a per annum increase basis, this means that the poor have been paying 37 per cent (10.4 divided by 7.6) more a year, relative to the rich.

If this trend continues, the poor may be further stressed when they fall ill.

According to the Ministry of Health's website (as at 2005), total government health expenditure per person declined by 16 per cent to $491 in 2004 from $584 in 2003, recurrent health expenditure fell 16 per cent to $1.6 billion from $1.9 billion, and development health expenditure slipped by 6 per cent to $97 million from $103 million.

Healthcare's share of total government expenditure also fell, to 5.9 per cent from 7 per cent.

In this connection, the National Kidney Foundation report had revealed that the health ministry asked NKF to raise funds for cancer.

The more funds health charities raise may in effect mean less government spending on healthcare.

Has the above declining healthcare spending contributed to the increased healthcare spending among the poor?

As the rich would typically choose higher class hospital wards and more expensive outpatient treatment and medicine, this disparity is all the more glaring.

According to the Feedback Unit's publication, Shaping Our Home: Turning Ideas Into Reality, the Health Feedback Group urged that we 'consider new ways of distributing subsidies to the needy; subsidies for Singaporeans should be made available to those who need it'.

The above statistics clearly indicate that more may need to be done in this regard, to lessen the financial burden of healthcare on the needy relative to the rich.

I would like to suggest that our healthcare policies be reviewed to address the increasing imbalance between the poor and the rich in healthcare financing.


F2. December 2005 5 letters in 3 years about NKF - Nobody read newspapers?

On Dec 31, 2001, the National Council of Social Service (NCSS) revoked NKF's Institution of Public Character (IPC) status, which meant that the NKF could not issue tax-exemption receipts to donors.

But less than a month later, in January 2002, the Health Ministry restored NKF's IPC status, administered by the Ministry of Health Endowment Fund, despite the NCSS having informed the ministry of its observations of NKF.

Why was the above not disclosed, such that it was never reported in the media?
Is not the termination of IPC status of Singapore's largest charity - by amount of donations - a matter of interest and grave concern to the public?

Later, the ministry even asked NKF to raise funds for non-kidney related causes, such as cancer, sending the NKF fund-raising machinery into overdrive.

While all these 'red flags' about NKF were kept away from the public eye, questions were being asked in letters to various newspapers as far back as 2002:

'Tell us how donations to NKF are spent' (Streats, April 16, 2003).

'NKF's top 3 should reveal pay' (Streats, April 12, 2004).

'A discrepancy in charity fund-raising' (The Business Times, May 13, 2003).

'Stop profiting from charity' (The Business Times, Oct 29, 2002).

'Dump lucky draw or cut donation tax' (ST, Sept 10, 2002).

These issues were raised periodically over the years. Why was nothing done?

An NKF press statement on its website states that 'while some bodies have the power to initiate an investigation into the management of a charity, none did so in the case of the NKF, in the absence of formal complaint'.

If termination of IPC status is deemed not to be a 'formal complaint', what would qualify as one?

Ball passing?

I overheard some children talking about the National Kidney Foundation (NKF) saga, and was struck by their satirical take on the issue.

In gist, they were saying everyone seems to be passing the buck and making excuses.

'Durai pass to NKF board, board pass to patron,' they said.

In fact, the patron did not even know Mr T.T. Durai's remuneration, and did not 'know and endorse' it as alleged by the board.

'National Council of Social Service pass to Commissioner of Charities, COC pass to Health Ministry, ministry pass to auditors, auditors pass to..?'

Dr Loh, former president of NCSS, had clarified to the media that 'the revocation of NKF's Institution of Public Character status by itself would send a strong signal that something was not quite in order. The COC had to be informed of this action and why it was taken'.

Within less than a month of the NKF's IPC revocation, the Health Ministry restored it, relying on the assurance of past periodic routine audits by the auditors that the financial statements did not show any unusual transactions.

The auditors responded in a statement that 'our primary responsibility was to express an opinion on whether the NKF financial statements show a true and fair view. We believe we have discharged that responsibility'.

To echo Dr Loh's concerns, if regulators globally relied only on the cursory facade of routine audit reports, despite 'red flags' being raised periodically, financial scandals like Enron and now the NKF might never come to light.

It has been said many times that we must restore public confidence, otherwise at stake are the hundreds of thousands of needy Singaporeans who are the beneficiaries of the 1,700 charities and voluntary welfare organisations in Singapore.

My fear is that if the children's perception permeates through to the general population., public confidence may continue to slide.

In a sense, we need to reflect how many of us have to take part the blame for our gullibility in donating to glitzy TV charity shows in the hope of winning a $500,000 property we now know was not sponsored but paid for by our donations, and donating more in a year to the NKF with only 1,700 beneficiaries than the Community Chest with more than 300,000.

Perhaps we can learn a thing or two from countries like Japan, where, whenever there is a serious financial scandal, those responsible admit their mistakes, apologise and resign.

While I do not advocate this, what is at stake is so great - the future of the charity and volunteer sector in Singapore - we must move on. I would like to commend the Health Minister, as to date, I believe he is the only one who has apologised - not Mr Durai, the former NKF board, the auditors or anyone else.

To restore public confidence, perhaps we should listen to the children. We must stop passing the buck and making excuses.

F3. Waiting for ministers to donate?

It was announced in Parliament on April 13, 2007 that the PM will donate his salary increase for the next five years to charity.

He said that 'he does not expect other ministers to follow his example because although the salary increases were a Cabinet decision, it was he who had to carry the ultimate responsibility, and not the ministers individually. What individual ministers want to do, is up to them. What individual MPs want to do, is also up to you.'

Why increase ministerial and MPs' pay now, and then say that some might donate their increments to charity? What the poor need is to be helped now, instead of having to wait until pay increments are channeled to charities, which may take some time to reach them.