Chance to innovate the city's charity sector
The recently released consultation paper from the Law Reform Commission proposing a regulatory regime for charities, including the setting up of a charities commission, is long overdue.
If, however, the commission ends up primarily in the role of a regulatory watchdog, as proposed, Hong Kong would have missed a great opportunity to catch up with the other major financial centres like London and New York. Hong Kong's new charities commission must instead take the lead to introduce global best practices to local grant-giving organisations and encourage them to work more closely with the other players in the social sector.
The world's leading charitable foundations no longer just award grants to charities and non-governmental organisations; they use all available tools to further their aims. That often involves making grants to intermediaries that provide advisory and training to other charities, NGOs, social enterprises and entrepreneurs. And many foundations also make direct investments, through loans or equity, in for-profit social enterprises. This is known as impact investing.
Consequently, the skills required of effective trustees of a charitable foundation have evolved, as well. It is no longer sufficient for trustees to be just trained in matters relating to the social good. Increasingly, they are also expected to be able to invest the assets in their foundation to maximise both social and financial profit.
For the trustees of many Hong Kong charitable organisations, such a transition might be uncomfortable. Hong Kong's future charities commission, therefore, has a responsibility to guide trustees through these uncharted waters. The commission should also encourage the charity and private sectors to collaborate, given the growing importance of areas where they overlap, such as corporate social responsibility, social enterprises and impact investing.
Finally, the charities commission has an excellent opportunity to engage with Hong Kong's young people. The so-called post-1980s generation is no longer just interested in high-paying careers. They care about the problems facing our society and the environment. Many have taken on volunteer work and some have even started social enterprises in their spare time.
A charities commission that reaches beyond its regulatory role to harness this energy and encourage this group to pursue meaningful careers in business and philanthropy would transform Hong Kong into a leading global centre for social innovation.
Ming Wong is co-founder and vice-chair of the Social Investors Club in Hong Kong. Follow him on Twitter: @HKSocInvestor