Yaan earthquake

Charity groups' efficiency analysis in the spotlight as HK$100m donation proposal stalled

Lawmakers' fears over possible misuse of funds delays quake relief as study shows HK charities are 'more efficient' than those on the mainland

PUBLISHED : Wednesday, 24 April, 2013, 1:56pm
UPDATED : Thursday, 29 August, 2013, 4:13am

Plans by the government to make a HK$100 million donation to the Sichuan earthquake relief effort were on hold yesterday after a legislators' meeting on the proposal ended without a vote.

The impasse came amid lawmakers' concerns of possible misuse of the funds.

No date has been set for resumption of the Finance Committee debate, which ended with several lawmakers still to speak and several motions seeking to divert the funds from mainland officials to non-government groups still left hanging.

It was the first time in recent years that such a funding request could not be passed in a single meeting.

The news came as a financial analysts' study showed Hong Kong charities tended to use their funds more efficiently than those on the mainland.

During the debate, pan-democratic lawmakers said the quake victims should be given aid but the Hong Kong government should hand the money to local relief groups rather than to Sichuan authorities to prevent its misuse.

"If we continue to donate money [to the government], corruption might become more rampant," legislator Leung Yiu-chung said.

Chief Secretary Carrie Lam Cheng Yuet-ngor said she was disappointed at the failure to vote and hoped "lawmakers do not make a mountain out of a molehill". She said the government would contact committee chairman Tommy Cheung Yu-yan to arrange another meeting.

A public report released on Sina Weibo this week found that most Hong Kong charities and non-profit organisations were able to keep more consistently balanced budgets compared to mainland ones.

Video: The Post takes to the streets to ask Hongkongers whether they think the government should donate money to the Sichuan aid effort

According to the analysis, the best performer was the Hong Kong-based Salvation Army. About five per cent of its expenditure went on administrative costs. Other Hong Kong charities - including World Vision International, the Amity Foundation and Oxfam - managed to keep their costs to between roughly seven per cent and 13 per cent.

An organisation on the mainland, the Smile Angel Foundation, spent just half its income on charitable programmes in 2009 before doubling the amount in 2010.

The report's authors - two analysts who requested anonymity - compiled data from the publicly available annual reports of charities from the mainland, Hong Kong and Taiwan.

"Any industry, regardless of whether it is not-for-profit or profit, should strive to provide complete information and transparency," one of them told the South China Morning Post.

A Hong Kong-based online platform, iDonate, has also compiled public financial information on charities. It showed that among those engaged in disaster relief work, World Vision Hong Kong was the best performer, scoring full marks in all five key areas - project expenses, fundraising, administration, salaries and fundraising efficiency.

"For those who wish to donate, they may want to wait and donate after organisations come up with relief plans after a disaster. They may also consider making continuous donations for on-going works afterwards," said Bonita Wang Ze-jin who founded the website in 2010. She works in the audit and financial field.

International organisations usually have lower administrative costs. Those within 15 per cent of the total expenses are considered reasonable, she said.