HK needs charity watchdog like UK's, says fund-raiser

PUBLISHED : Tuesday, 18 December, 2007, 12:00am
UPDATED : Tuesday, 18 December, 2007, 12:00am

A body similar to Britain's Charity Commission should be set up in Hong Kong to curb the growing problem of questionable charities raising funds from the public, a veteran fund-raiser said.

The call for a charity commission follows a South China Morning Post report yesterday that revealed a loophole in the monitoring of charities.

The report said there was a growing number of new groups with names similar to established charities, raising fears they were confusing donors and depriving long-standing groups of funds.

A group registered with the Inland Revenue Department as the Hong Kong Community Services Association has a Chinese name almost identical to a well-known advocacy group for the poor, the Society for Community Organisation, or Soco.

Ho Wai-chi, a former executive director of Greenpeace and a member of the US-based Association of Fund Raising Professionals, suggested that the British-style charity commission be established in Hong Kong to solve the problem of possible scams.

'The UK commission registers and investigates complaints, and a similar commission should be set up in Hong Kong,' Mr Ho said.

He said the system of letting two different departments approve an organiation's charitable status and its fund-raising activities, and the lack of co-ordination between the two was causing the monitoring loophole.

Under section 88 of the Inland Revenue Ordinance, groups can set up as a charity if they register to get a tax exemption.

All 4,832 Inland Revenue Department-registered charitable groups and 22,144 police-registered societies are allowed to raise funds on the street, as long as they submit an application for a public subscription permit to the Director of Social Welfare.

Neither the Inland Revenue Department nor the Social Welfare Department investigated how money raised by charities is spent.

Oxfam's Albert Chan Ka-ming said a commission was not needed because it might make things bureaucratic and not cost-effective.

He instead suggested the Inland Revenue Department cancel charity status of groups with bad records.

But both Mr Chan and business director Cliff Choi Kim-wah of the Hong Kong Council of Social Service (HKCSS) warned that the monitoring of charities could not be too tight or it would kill small groups. Both said people should not rely on the government departments to check on the charities. Mr Ho said another option was an accreditation system similar to BBB Wise Giving Alliance in the US, which gives a 'trust mark' to trustworthy charities.

HKCSS spokesman Eddie Tsang Chi-hong said accreditation could be the next step but there had been no discussion on which organisation would issue the accreditation.

Meanwhile, the HKCSS has launched a website,, on which only charities meeting five criteria, including transparency, are listed.

Tips for donors Against fraud

1 Check if the street fund-raiser has a Social Welfare Department public subscription permit. Check the date listed on the permit.

2 Ask the group about its work and its beneficiaries. Ask to see its income and expenditure account. Ask if it has joined the Hong Kong Council of Social Services' Pledge on Donors' Rights, which guarantees accountability. If they fail to give an answer, go away.

3 If you are suspicious, do not donate. Ask for their telephone number and call to ask for their audit reports. Look at their administration costs. Generally, those with costs below 10 per cent are good.

4 Make a decision after viewing the information. You may ask for references from friends and charitable groups in the same field.

5 Ask to visit the group and see their activities.

6 Report any suspicious groups to police and the Social Welfare Department.

Source: Oxfam fund-raising director Albert Chan Ka-ming