Thursday, July 08, 2010

Introduction to Charities (Part 2)

This is a continuation to my earlier post on Charities. And if you haven’t read it yet, it would be a good starting point.

Firstly, thanks for your many kind words of encouragement over that last blog entry! Haha! Some asked me how long I took to craft the article out. Erm, I think it took me a little more than an hour. Most of the information, I already knew and was pretty familiar with, so it was just to pen it down in as coherent a way as I knew how to.

My tirade started when I read a particular blog that claimed that since City Harvest Church only gives $2.9 million to local and community work, it cannot be called a charity. Oh. My. Goodness. If you think so too, please read this. :)

Hey, I respect the blogger, and he is sure talented and writes very well, but this is a fallacy. But of course, I cannot just blame this one blogger. There are after all, many well-meaning but not-too-well-informed people like him. So rather than just fuming, I decided to blog.

Here’re some more of my thoughts on this topics. Do note that most of what I share is applicable to the Singapore context. I do not claim to have perfect knowledge on this topic, but this is as factual as I can muster. :)

Is a charity a society or a company or something else?

There are many terms bandied around, and I don’t blame the general public for feeling a bit confused with these terms.

“Charity” is, simply put, a status that is conferred to an organization (be it a society or a company), and it is conferred based on the purposes that it is set up for. The types of acceptable charitable objects has been discussed in detail in my earlier post, and also readily available online.

However, there are various entities that an organization can opt to be set up as - a company, a society, a partnership or even a sole proprietorship.

Sole proprietors enjoy the simplest and least complex business structures. And on the opposite end of the spectrum lies the companies. In the context of religious organizations, some choose to be set up as a company limited by guarantee, and some as societies.

So whether the organization is set up as a society or a company limited by guarantee, it is a matter of the initial set-up process. Thereafter, it is governed by the respective government department (ACRA for companies, Registry of Societies for societies). However, in essence, no matter the kind of set-up, each organization will still have their governing instruments. For societies, this would be the Constitution. For companies, it would be the Memorandum & the Articles of Association. The format of these two governing instruments may differ in presentation, the Charities Unit requires that they should minimally contain certain information such as charity objectives, management duties and terms, quorum for conducting an AGM etc. Both a society and company would also need approval from both ACRA/ROS as well as the Charities Unit for any changes to their governing instrument.

Spending of the charity

I have read about certain charities accused of spending “too much” and how the money “should be used to help the poor”.




Would you ask the Badminton Association to get cheaper rackets or save on their rentals so that they can donate more to another charity? If there are $2 rackets in the market, what is the rationale for spending so much on $200 ones? Mind you, it is asking one charity to save for the sole purpose of donating to another charity. This isn’t called financial prudency, it is plain silly.

Or should they go for a cheaper quality of paper for its office use, in a bid to not just go green but also to manage costs?

I hope you see the difference. One is that society’s core business (advancing the sport of badminton, improving the quality of badminton players in the nation), and which it will not and should not scrimp on. The other is merely an expense which can and should be looked into to be reduced.


loyal reader said...

hi! i used to be from chc and i read ur blog regularly. though i don't go to church anymore, i couldn't agree more with all you have written, especially with regard to charities. people out there just really do enjoy picking on chc. so thanks for enlightening them and putting some sense in all this nonsense they have created :) i know chc will definitely weather this well and emerge victorious :)

San said...

Hi Loyal Reader... Thanks for your kind words!