In Singapore, an entity will need to register itself as a society under the Societies Act, incorporate itself as a company limited by guarantee under the Companies Act or form a trust under the Trustees Act before it can register as a charity. This is because the charity status is not a legal status in Singapore. Each of these legislations has its own regulatory obligations. On top of this, a charity could also apply for an Institution of a Public Character (IPC) status from the Inland Revenue Authority, so that donations to the IPCs would be granted double-tax deductions. The Inland Revenue Authority had delegated the approval of IPC status and of its regulation to 11 government agencies (known as Central Fund Administrators). Hence, there are IPC-charities and non-IPC charities, constituted as companies, societies or trusts which come under various agencies’ purview. In addition, charities typically organise fund-raising events for their programmes, which require permits from different authorities, e.g. the office of the Commissioner of Charities, Central Fund Administrator, Police etc.
Prior to the development of the online Charity Portal (the initiative), each of these regulators handled the registration and monitoring of the entities and the different permit applications independently. This had led to several problems. Firstly, the lack of a consistent regulatory strategy among the government agencies led to potential regulatory loopholes. For example, an organisation which failed to obtain IPC status from one agency could apply again from another agency with more flexible requirements. Secondly, the similar requests by different regulatory agencies had resulted in some duplication of efforts by the charities and IPCs and thus expending of resources to navigate through the myriad processes. Thirdly, as the applications and reporting have to be done sequentially/separately with the different regulatory agencies, the processes inevitably took a long time, sometimes up to 6 months. Fourthly, many people simply do not know where to start looking for information regarding charities and charitable activities in Singapore as information on charities was not centralised.
At the same time, around the middle of year 2005, a major charity scandal broke out in Singapore. This led the Government to recommend several measures to improve the governance standards of charities in Singapore.
However, the task of improving the regulation and governance standards of charities was challenging. There were close to 1,900 charities of different sizes, providing a wide scope of different activities such as promotion of health, education and religions, and managing a total annual income of about $4.5 billion. There was inadequate information on charities and the Government’s regulatory approach toward charities was also not coordinated. This was made more difficult by the complexity of the charity sector.
The impetus to streamline the regulatory structure and processes, and the need to improve transparency and accountability for public donations in the charity sector, led to the conception of the online Charity Portal.
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