Tan Kin Lian / Senior Writer
During the past two years, several high profile charities in Singapore have come under the spotlight. They were involved in financial and administrative irregularities. These notable cases are the National Kidney Foundation, Youth Challenge and the Ren Ci Hospital.
People wonder, “What is happening here? Why are we facing these irregularities in a clean, corruption-free place like Singapore?”
Perhaps, it suggests some major weaknesses in the Singapore system.
Welfare
The problem starts with the Government’s view that welfare is bad and can be abused. The Government restricts the funds that can be used for welfare. There is a belief that the voluntary and charitable sector can take better care of the needy and poor and provide the assistance in a more efficient manner.
The actual experience has been disappointing. The facts have been glaring in our faces for so many years. Yet, Singaporeans, including our leaders, have been quite naïve.
In 2005, the National Kidney Foundation raised $98 million in funds. After deducting direct fund raising expenses of $19 million, the net proceeds were $78 million. It took care of 2,300 patients on dialysis. The funds raised works out to $33,000 per patient.
However, the patients are not given free treatment and still had to pay a fairly significant share of the cost of dialysis. The NKF had an accumulated fund of $262 million at end of 2005.
Ren Ci raised $30 million in 2007. The direct fund raising expense was $1.5 million, giving a net income of $28.5 million. It took care of 413 beneficiaries in their chronic sick wards and nursing home. This works out to $69,000 per resident.
In both cases, the amounts raised are excessive in relation to the number of beneficiaries.
Structural weaknesses
These charities have an independent board of directors, comprising of respectable members from the business community and society. The board is expected to exercise governance over the funds and management of the charities.
In practice, it is difficult for the non-executive members of the board to exercise these functions. Most board members have been approached mainly on their ability to help in the fund raising activities of the charity.
They are now required to shoulder the additional burden of providing close supervision over the investments of the surplus funds, use of the funds and the day to day operations of the management.
Some of these board members may find their job descriptions to be too onerous and the rewards too unattractive, that it is better to leave this thankless task.
A business organisation can employ highly paid accountants and senior managers to carry out the functions of internal control, checks and balances. This is not possible with the limited budget of a charity.
Community Chest
Let us look at the work of the Community Chest of Singapore, an organisation that is not tainted by these irregularities. The Community Chest raised $47 million in 2007 to take care of 350,000 beneficiaries. The average amount raised per beneficiary is $134.
It seems that the aggressive fundraising by NKF and Ren Ci might have siphoned charity dollars that could have gone to the Community Chest to take care of a larger number of beneficiaries.
Every dollar of donation raised is made available for the social service programmes run by the charities funded by the Community Chest. The fundraising costs are sponsored by the Totalisator Board and Singapore Pools.
I have always held the view that it is better for fundraising to be centralised under the Community Chest, instead of allowing individual charities to compete for the charity dollars.
This will avoid unnecessary competition and waste and reduce the fundraising cost. It will ensure that more of the money raised will be available for the social programmes, instead of being spent on marketing and administrative expenses.
However, there was a fear in the past that the Community Chest would not be able to raise sufficient funds to meet the needs of the larger charities like NKF and Ren Ci. This was the reason for their exclusion from the ambit of the Community Chest. As events turned out, the independent fundraising approach has raised other problems.
Schools to raise funds
The fundraising efforts have spilled over to the schools and their students.
Over the years, there have been many complaints from parents that their children are asked to raise funds for the schools and for charity. The students have to approach their parents and relatives for the donations.
Many schools carry out these fundraising activities throughout the year. The parents felt compelled to donate to these causes to support the requests of their children, relatives and friends.
Children from poor families are put at a disadvantage. They are unnecessarily embarrassed by their inability to meet the fundraising target.
Teachers have complained that they are required to spend time to collect and account for the donations raised, and to co-ordinate the students in this effort. It is an added burden to their heavy workload.
We should stop these wasteful activities. If funds have to be raised, let it be done in a coordinated manner once a year, where all the schools can take part together.
A New Strategy
I wish to suggest this approach towards funding charities for the future:
1. Set up an alternative centralised fund raising organisation to take care of the specific needs of the larger charities, such as NKF and Ren Ci.
2. Allow donors to make specific donations to these charities, instead of going to a common pool, which is the approach adopted by the Community Chest
3. Set a limit to the annual amount that can be raised for each charity, including the total amount that can be accumulated in their reserves.
4. The funds raised should be managed by a trustee organisation and released to the charity to fund their services, based on an approved budget.
5. The specific charity can set up a fundraising committee to work under the ambit of the centralised body.
I hope that these suggestions can help towards a charitable cause.
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