All for a common cause

PUBLISHED : Friday, 23 September, 2011, 12:00am
UPDATED : Friday, 23 September, 2011, 12:00am


All it took was a short summertime walk in Central for Bernard Chan to see that charity fund-raising - the cheerful appeals to buy raffle tickets, the guilt-laden entreaties to dig for change - had veered out of control.

'It was just a 15-minute walk, and I have come across three different groups asking for donations,' said Chan, chairman of the Law Reform Commission's charities subcommittee. That was on June 16, the day the commission launched a consultation aimed at bringing more oversight, transparency and accountability to groups seeking money for ostensibly good causes.

The consultation, originally supposed to end in mid-September, has been extended to the end of next month because of anxieties raised by most of the 6,300-odd charities across the city that raise about HK$8 billion a year.

The philanthropies are especially unnerved by the proposal for a new charity commission that would be empowered to process and grant licences for organisations that raise money and enjoy tax exemption. It would also be able to deregister charities and change their trustees or directors.

With powers like that, the charities fear, the new body could become a tool to suppress voices against the government.

'Even before the end of the consultation, chances are high that the proposal that hoped to fill the legal vacuum in regulating the surging number of fund-raising groups would never become legislation,' said Christine Fang Meng-sang, a member of the Law Reform Commission's charities sub-committee.

Fang is also chief executive of the Hong Kong Council of Social Service, an umbrella group for 320 non-government organisations. Since the consultation started, the council has held nine seminars for 450 charity representatives.

All of the charities recognise that more transparency is needed to ensure the public's trust, Fang said. Yet 'everyone is scared by the framework of the commission that is set in the proposal'.

'Many groups ask how the power of the charity commission, which appears to have so much power in the proposal, can be countered and be checked,' Fang said.

The answer so far has been that organisations aggrieved by the charity commission's decisions could appeal to the Court of First Instance.

'However, many charities are operating with a tight budget,' Fang said. 'How can they afford the legal fees?'

Charities were especially worried that the commission, rather than representing the public or the organisations, would speak for the government.

After all, the members of other Hong Kong commissions - including the Town Planning Board, Securities and Futures Commission, Minimum Wage Commission, Estate Agents Authority and even the Law Reform Commission - are appointed by the chief executive.

'Charities as well as members of the public have little trust and faith towards the government now,' Fang said.

'It is difficult for us to trust that the commission, whose members are all handpicked by the chief executive, will be a totally fair one.'

Hong Kong, known as a highly commercial society, is also a hub of philanthropy. The number of tax- exempt charities rose to 6,380 last year, from 4,162 in 2005. Tax-deductible donations rose to HK$8 billion in 2009, from HK$5 billion in 2003, according to the latest government figures.

Many Hong Kong people are willing to open their wallets for charities, Fang noted. 'But people began to regard the frequent sight of people raising funds for charity on the streets as a nuisance.'

Most approach passers-by with a smile and a polite request that they give to a worthy cause.

But some, often working in groups, can be overly enthusiastic. It was this that caused the Law Reform Commission in 2007 to start reviewing the regulation of charities at the request of then chief justice Andrew Li Kwok-nang and Secretary for Justice Wong Yan-lung.

But there have been no major scandals relating to charities. The Social Welfare Department this year has received 28 complaints about fund-raising activities. It received 57 last year. That's a small number, given the city's more than 6,300 charities.

So is this review even necessary?

Fang says yes.

'The public's trust for charities is a very fragile one,' she said, adding that organisations cannot wait until confidence is shattered to start looking for solutions. 'We all see the catastrophe in China brought about by Guo Meimei .'

She was referring to the furore sparked by a young woman on the mainland who claimed to be a manager affiliated with the Red Cross Society of China while flaunting her extravagant lifestyle. The recent saga seriously tarnished the reputation of the mainland's biggest charity, and it triggered allegations of corruption that spread, by association, to charities in general.

Charitable donations on the mainland plummeted to 840 million yuan (HK$1 billion) in the period from June to August 24, from 6.3 billion yuan from March to May.

'The creditability of charities is important,' Fang said. 'All NGOs agree that we have to do something to enhance regulation on fund-raising activities and transparency of how the donation is used.'

Hong Kong lacks a legal definition of what constitutes a charity. The Law Reform Commission proposes a legal regime that includes 'relief of poverty' and 'advancement of religion' as legitimate charitable purposes. It would be up to the public, however, to decide whether another purpose should be the 'advancement of human rights'.

Ho Hei-wah, director of the Society for Community Organisation, cautioned that even if human rights advocacy were included as a function of charities, many groups - including his - would fail to qualify.

'As far as we know, in all countries with a charity regulation regime, only Australia and the United States would recognise organisations which fight for change in government policies as charities,' Ho said.

If the proposal passes, his group - which mainly advocates for policy changes for new migrants, the homeless and other vulnerable groups, without offering many direct services for them - would no longer be allowed to enjoy charity status, he said.

The group, which spends about HK$5 million annually, depends heavily on fund-raising activities that bring in nearly HK$1.2 million a year.

'Hong Kong is still a developing society, in that many NGOs have to do the job of policy advocacy,' Ho said.

'It is very different from some developed overseas countries in which these advocacy works would be done by political groups.'

Nelson Chow Wing-sun, chair professor at the University of Hong Kong's social work and social administration department, said too much attention in the consultation was being focused on the charitable status of human rights advocacy.

'I think we should pinpoint more on how to regulate fund-raising activities on streets,' said Chow, adding that he is approached for donations almost every day in his Happy Valley neighbourhood.

'And I also receive many letters asking me to donate to their organisations. It is just too much,' he said.

Last month, the Social Welfare Department put into effect new guidelines for charity groups' behaviour on streets. They can have no more than eight people at each location, and those people may wander no farther than 10 metres from the table they set up.

Ho agreed that more regulation of fund-raising activities is needed. He said it would be helpful if the government took a 'one-stop' approach, instead of making charities answer to several departments, including Social Welfare, Food and Environmental Hygiene, and Inland Revenue.

But as the consultation continues, Ho has become more pessimistic about the chances for reform.

'There are simply too many charities voiced against it,' he said. 'And I do not see that the government has the heart and determination to really do something with the current political atmosphere.'

On the other hand, better regulations could be enacted by administrative fiat - such as the Social Welfare Department's new rules on street fund-raising - rather than new legislation, Ho noted.

Peter Cheung Kwok-che, social welfare lawmaker, also sees little hope for the Law Reform Commission's initiative.

'It is very likely that the proposal would not even be introduced to the Legislative Council, like many of the reports made by the Law Reform Commission over the past few years,' Cheung said.

The commission has handed in 10 reports since 2005 when Donald Tsang Yam-kuen became the chief executive. But only two ordinances - the Domicile Ordinance and the Interception of Communications and Surveillance Ordinance - have gone to the Legislative Council and been enacted.

Fang, too, is doubtful a consensus can be reached. 'But as I said earlier, we cannot stand still,' she said. 'Let's walk the first step. We have to draw the public's attention and start the debate now.'


The amount, in HK dollars, raised by 6,380 charitable organisations last year