Whistle-blowing policy among proposed changes for large charities
The Singapore Red Cross has welcomed the proposed refinements to be made to Charity Council’s code of governance. TODAY file photo
SINGAPORE — Large charities with gross annual receipts or a total expenditure of S$10 million or more will be required to set in place a whistle-blowing policy, if proposed revisions to the Charity Council’s code of governance are introduced early next year.
Such a policy, which must be disclosed in a charity’s annual report, is aimed at helping employees or outside parties make a report without the fear of adverse consequences, said the council in a press release on Monday (Sept 19).
Other proposed changes include refining the tiered guidelines for charities of different sizes, introducing a maximum term limit of 10 years for at least two-thirds of a large charity’s governing board members, and enhancing the disclosure of information of charity board members, such as their attendance at meetings and remuneration, among others.
The council announced its review of the code — introduced in 2007 — last year.
It has held four dialogue sessions with selected charities and Institutions of a Public Character (IPCs) this year, and is now seeking feedback from the public in a consultation exercise that opens today and closes on Oct 18. The code was last tweaked in 2010.
Charities and IPCs — the latter can receive tax-deductible donations — will need to apply the code’s new reporting requirements for financial years beginning on or after Jan 1, 2018.
Charities and IPCs are subject to different guidelines depending on their size — which is proposed to be determined by gross annual receipts or total expenditure, depending on which is higher — in order to subject charities with high expenditure to more “stringent governance standards”, said the council.
The council has also proposed changes to some of the tiers. For example, under the revised enhanced tier — which applies to large charities with gross annual receipts or total expenditures of S$10 million or more — the 10-year limit for governing board members will apply.
Members wishing to be re-appointed can be considered after a lapse of two years. The council said this would help encourage “steady renewal”, and new board members could bring in “fresh ideas and insights”.
Meanwhile, for all IPCs and charities with gross annual receipts above S$50,000, the council proposed that board members should not receive remuneration for their board services.
If remuneration is permitted, the charity should disclose this in its annual report.
Currently, this guideline only applies to large charities with gross annual receipts above S$10 million and IPCs with gross annual receipts above S$200,000.
Citing how such disclosures by charities are increasingly becoming a “norm” that is “expected” by the public, the council said: “Charities are also public interest entities and receive tax exemption on their income. Therefore, there is a greater need for transparency and accountability to the public.”
The council has also proposed a definition of volunteers — a person who willingly gives up time to serve a charity without the expectation of any remuneration — and that those involved in a charity’s day-to-day operations should abide by the code’s best practices for staff.
Singapore Association for Mental Health (SAMH) executive director Tan Li Li, said she was “heartened” to see the continued push for “good transparency and good governance” in the sector. SAMH is currently under the Basic II tier of the code, with total income and donations amounting to S$6.7 million.
But she was concerned about the proposed maximum term limit for board members. While it would be a good practice, there might also be “practical challenges” in implementing it, she said, noting it was already challenging to recruit volunteers for the mental-health sector.
“Are we able to attract enough new members to serve on the board? Some non-profits have causes that appeal to more volunteers, while others may not,” she said.
More than 60 per cent of SAMH’s 15 board members have served more than 10 years. If the new requirement is introduced, SAMH may have them serve on a sub-committee to “leverage” their knowledge, she said.
Mr Benjamin William, secretary general of the Singapore Red Cross, welcomed the proposed refinements. “As the charity sector grows in size and the amount of resources mobilised, it is important that accountability is strong,” he said, adding that structures to strengthen transparency and risk management in charities would be key.
The public can email their feedback via charity_council_sec [at] mccy.gov.sg.
