Fund-Raisers Duties and Obligations
There are different requirements on starting a fund-raising campaign, depending on whether the fund-raising appeals are made in the capacity of a charity (including an Institutions of a Public Character (IPC)) or the general public. A charity may also engage commercial fund-raisers or participators for its fund-raising appeals. A commercial fund-raiser is anyone who is engaged at a fee to fund-raise for a charitable cause, and a commercial participator is anyone who carries on a business (of non-fund-raising nature) and in the course of the business raises fund for a charitable cause (such as retailers, banks, pharmaceutical companies etc).
- Duty to Donors
- Use of Donations
- Maintenance and Disclosure of Financial Information
- 30/70 Fund-Raising Efficiency Ratio
- Use of Commercial Fund-Raisers
A charity or IPC, commercial fund-raiser, commercial participant or person conducting a fund-raising appeal in Singapore shall ensure that:
- Any information provided to donors or to the general public is accurate and not misleading;
- To disclose the name of your organisation, intended use of funds raised (includes the cause and/or beneficiaries) and whether any commercial fund-raiser has been engaged in soliciting the donation;
- Information relating to donors is kept confidential. No information relating to a donor should be given to any other person without the consent of the donor;
- Arrangement to solicit donations must have adequate control measures and safeguards to ensure proper accountability and to prevent any loss or theft of donations; and
- If the fund-raising is done by commercial fund-raisers or commercial participators, all solicitation and publicity material must be accompanied by a written statement with the additional information :
- Proportion of total proceeds that will go to charitable causes;
- Breakdown of proceeds to each charity (if funds are raised for more than one charity);
- Name of the commercial fund-raiser or commercial participator, and its status as a commercial entity; and
- How the fund-raiser or participator’s remuneration is calculated.
The usage of donations should strictly adhere to the following requirements:
- All donations have to be used according to donors' intentions;
- If such intention is not specified, donations must be used according to the purpose communicated to the donors during solicitation;
- If such intention is not specified
and no purpose is communicated to the donors during solicitation, the donations may be used to fund any activity carried out by the charity that meets its purposes under its governing instrument or in the case of an IPC, the donations may be used to fund the activities carried out by the IPC.
- If a donation cannot be used, the charity or IPC must refund the donation or use the donation as may be approved by the Commissioner of Charities or Sector Administrators.
A charity or IPC, commercial fund-raiser, commercial participant or person conducting a fund-raising appeal must ensure that all accounting records relating to the fund-raising appeal must be maintained for a minimum period of 5 years from the end of the financial year.
A charity or IPC must disclose in their financial statements:
- the consolidated amount of donations received from the fund-raising appeals in the financial year; and
- the total amount of sponsorships if, and only if, receipts or other documentary evidence are available.
All charities and IPCs are expected to keep their fund-raising efficiency ratio
below 30%. This is commonly known as the 30/70 rule. The fund-raising efficiency ratio is the total fund-raising expenses to the total gross receipts from fund-raising and sponsorships of the charity or IPC for that financial year.
For fund-raising done via sale of merchandise, only the net proceeds (i.e. the gross amount received from sale of merchandise less cost of relevant goods), will be treated as receipts. The cost of merchandise need not be included as part of fund-raising expenses.
Formula for computing Fund-raising Efficiency Ratio:
"E” refers to the total expenses relating to fund-raising for the financial year, including:
- Direct and material indirect expenses of any kind; and
- Payments made to commercial fund-raisers engaged by the charity or IPC,
but excluding, in a case of the sale of goods by or on behalf of the charity or IPC for fund-raising (and not trading1), the cost of the goods sold.
“R” refers to
- the total receipts from such sale (after excluding only the cost of the goods sold), in the case of sale of goods by or on behalf of the charity or IPC for fund-raising (and not trading); and
- the total gross receipts from any other fund-raising for that financial year.
“S” refers to
- total amount of sponsorships2 in cash received by the charity or IPC relating to fund-raising for that financial year,conditioned upon the provision of direct or indirect commercial benefit to the sponsors; and
- total cost or value of sponsored property, goods and services for which tax deduction receipts are issued relating to fund-raising for that financial year (this applies to IPC only).
1 "Trading", for the purpose of computing the 30/70 fund-raising efficiency ratio, refers to the provision of goods and services (donated or otherwise) in return for a payment, carried out on a regular basis with a view of making profits to fund the charitable causes.
2 “Sponsorship” in the 30/70 fund-raising efficiency ratio refers only to cash sponsorships that are conditioned upon the provision of direct or indirect commercial benefit to the sponsors and in-kind sponsorships where tax deduction receipts are issued.
All organisations who wish to raise funds for a charity or an IPC must have a written agreement with the charity or IPC before soliciting funds. The agreement with the charity or IPC must contain the following information:
- Place and date of appeal and fund-raising method;
- Percentage of proceeds to the charity or IPC;
- Timeframe within which proceeds will go to the charity or IPC; and
- Fees of the fund-raiser.
Where commercial fund-raisers are engaged for any fund-raising appeals, all donations received must be made directly to the beneficiary charity or IPC. Any payment or reimbursement due to the commercial fund-raisers must be made by the charity or IPC separately.
The Commissioner of Charities has issued a
Code for Commercial Fund-raisers to strengthen fund-raising practices in Singapore. This Code was developed with inputs from key stakeholders of the sector, including the Singapore Police Force and commercial fund-raising companies. For more information on the above, please refer to the section on
Use of Online Fund-Raising Platforms and
Commercial Fund-Raisers.
