To maintain and strengthen public trust and confidence, charities have to strive to be transparent, accountable and effective

Mrs Fang Ai Lian, Chairman of Charity Council

Members of Charity Council

Partners and Sponsors

Distinguished Guests

Ladies and Gentlemen

1. I am happy to join all of you this morning at the inaugural Charity Governance Conference. Today’s event is another key milestone in the Charity Council’s efforts to uphold governance standards in the charity sector.

2. I am grateful to our speakers for taking the time to be here, to share their knowledge and experiences. Let me also take the opportunity to thank our generous sponsors - Lee Foundation, Deloitte, PWC and KPMG - all of whom have helped to make this event possible.

3. As Ai Lian mentioned in her speech, good governance is not the work of the charities alone. It requires the people, private and public sectors coming together, to build a well-governed and thriving charity sector.

4. So I am very heartened to see so many participants here today. The overwhelming response reflects our charities’ support for the Council’s initiatives, and the strong commitment towards winning public trust with good governance, which is the theme for today’s conference raising governance standards.

Vibrant charity sector

5. Singapore’s charity sector is vibrant and dynamic, and I want to thank all of you for your commitment, hard work and passion in service. And for inspiring Singapore with your spirit of service. We may not always realise it, but every day, our lives are touched by the charity sector. We have more than 2,000 charities today. This number has been increasing over the years, and is expected to increase further, alongside an expanding social enterprise sector.

6. Almost all Singaporeans are engaged across the 2,000 different charities in direct ways: as employees, as volunteers, as donors, or as customers and clients. So the charity sector is in fact one of the anchors of Singapore life - its vast scope includes areas as diverse as arts, education, sports, healthcare, as well as support for the elderly and underprivileged. In short, it provides much of the cultural and social nourishment for our country.

7. Without a robust charity sector, all of these services would either cease, or would require direct government provision. I think we will certainly be worse off without these services if they were to cease.  And even if the government were to take over these functions, I think we will still be worse off, because no matter how well thought out the government schemes are, they cannot replace the warmth and personal touch of charitable organisations and of the volunteers who serve with you.

8. That’s why the government continues to provide significant support to charities in terms of for example income tax exemptions, direct grants to a wide range of charitable organisations, matching grants to match private donations, and tax deductions for IPCs donations. We want to build a partnership with the charity sector, where both sides work together to help individuals in need, and to provide public services that serve the common good. 

Transparency to gain public trust

9. Given the growing importance of charities in the provision of services that affect our lives, and the support provided by both citizens, taxpayers and private donors, we do need to address issues of accountability and effectiveness in charitable organisations. While the levels of trust in charities have remained high over the years, we have an increasingly sophisticated public that wants to see clearer reporting on the work done by charities. They want to make informed decisions about how to spend their charity dollars, and expect to be able to access such information quickly and easily.

10. To maintain and strengthen public trust and confidence, charities have to strive to be transparent, accountable and effective. Charities will need to show where donations are going, how they are being used, and how they are making a difference.

11. This trust and support is crucial for charities to succeed.
    
    a) Take the example of the Singapore Red Cross, a winner of the Charity Governance Award 2013. In their recent relief efforts, SRC successfully raised $9.4 million for areas of the Philippines which were devastated by Typhoon Haiyan. The successful fundraising was to a large extent made possible by the strong public trust in the organisation that it would use donations responsibly and wisely.
    
    b) One of our speakers today, Mr Tao Ze, from the China Foundation Centre, will also share on how transparency influenced the fundraising efforts by public foundations in China, for example during the Lushan earthquake in April 2013.

12. While we have charities like the Red Cross which uphold high standards of transparency, the practices on the ground are still uneven and I think we have to acknowledge that they still vary widely across organisations. A study by the Centre for Non-Profit Leadership which was published in September last year revealed that there is still much scope for improvements:
    
    a) Of the 577 charities surveyed, only two-thirds disclosed board members’ information on their websites, and only slightly more than one-third disclosed the information in their annual reports.
    
    b) And of those that provided the information, the information available was also less than comprehensive, being limited only to the board members’ names and gender.
    
    c) On top of this, less than half of the charities surveyed made their financial statements and annual reports available online.

13. The study shows that many charities still perceive transparency and accountability as something that is good to have, but not a must-have. This mindset needs to change. With more and more Singaporeans coming forward to give, charities must improve in the area of accountability and transparency.

Developing a system of charity transparency ratings

14. And I think this demand for greater transparency and accountability is not unique to Singapore. In fact there is increased public demand for greater transparency by charities around the world. Some countries even have transparency rating systems to facilitate informed giving, as well as to promote good governance, and you can see different examples in different countries.

15. For example in the US, a non-profit organisation called Charity Navigator puts up ratings of charities in two broad areas: their financial health, and their accountability and transparency. These ratings help donors to make informed giving decisions, and also help charities to improve their performance.

16. In fact, some groups in the US have even gone beyond the Charity Navigator rankings. One organisation called GiveWell provides in-depth evaluation reports, both on entire charitable sectors and on individual charities. They hope that by doing so, they can identify effective charities where donor money can be put to good use. 

17. There are many of these efforts we can see in the US and other countries. And I think in Singapore, we are still at a nascent stage as far as such evaluation efforts are concerned. I think we should look at the experience of other countries, learn from the examples and lessons, and adapt the useful ones into our context. And we should start thinking of ways to build new platforms that promote greater transparency, and to help create a conducive environment to informed giving.

18. So the Charity Council has been thinking about this for some time and I understand that they are in the early stages of a study with the NUS Business School, to conceptualise a transparency rating framework.

19. The aim of this framework is to help charities improve their performance and effectiveness, resulting in enhanced public support and confidence. The project team is consulting stakeholders to seek their preliminary views. The Council will be exploring the implementation of such a ratings system towards the end of this year. This will be introduced in phases covering different sectors and over a period of time. We look forward to consulting you when the framework is more developed.

Conclusion

20. As we work to build a caring and gracious Singapore, we must remember that good governance underpins charitable giving. So I hope we can continue to work together to do good well and do good right. Let us persist in upholding governance standards across the charity sector.

21. On this note, I would like thank all of you for being here today. Your presence shows your commitment to upholding good governance in the charitable sector in Singapore. And I wish you all a fruitful conference. With all hands on deck, I am confident we can realise our shared aspiration of a well-governed, robust and thriving charity sector, with strong and continued public support.

22. Thank you very much.