Be an intelligent donor

Open the newspaper and you will frequently come across a charity fundraising event and it is the same on social media.

Requests for donations nowadays come pouring in through many channels.

Fundraising has become an important activity in our community over the years.

It helps to fulfill a very useful function. There are many worthy causes in our society that will always need support.

There are times and situations where the government is unable to reach out for various reasons and therefore fundraising activities fill these gaps.

Most of our NGOs and welfare charities are funded via public fundraising activities.

Various methods are used. Direct sponsorships, food fairs, appeals in newspapers and social media, runs, dinners etc. and even via dedicated charity funding sites on the web.

But have you ever stopped to consider a very important point?

Does your money ever reach the source? Meaning the publicised objective and even if it does, what proportion of your donation actually reaches the targeted objective?

Example, if you donate RM100, does all of it get to the publicised objective, or part of it or perhaps none?

Are there any deductions for cost incurred? In many situations, there are reasonable expenditures that need to be deducted from the donations.

So types of cost maybe, administration cost, retention percentage, appreciation dinner, publicity cost, T-shirt cost, refreshment cost, professional fees and in some situations, even nowadays there are professional fundraiser charges.

Assuming it is a legally registered organisation, the question arises, what are reasonable deductions and what percentage of the raised amount goes into expenditure?

Imagine that from the RM100 you donated, RM90 goes on expenditures. If you knew this in advance, would you have donated the RM100?

In years gone past, the Registrar of Societies (ROS) had guidelines that stated a maximum of only one-twelfth (1/12th) of the amount raised could be claimed as expenses.

However, nowadays these guidelines do not apply as the ROS does not issue fundraising permits anymore.

There are, I am sure, many variables which might be deemed acceptable depending on the type of charity and cause.

Let’s take as an example a very popular form of fundraising nowadays, the charity run.

File photo of a jogathon poster in aid of charity.

There are many of these runs taking place virtually every month.

Other than the entrance fees, there are usually corporate sponsors for placing their company names and logos on the T-shirts and publicity materials. A substantial amount can be raised.

If this event is organised by the charity itself, all funds raised belongs to the charity.

However, if another organisation takes on the role of the event organiser, then what happens to the balance of the funds after a charity receives its share of, say, RM5,000?

This scenario was put to me and it does beg some answers.

How many of the ‘runs’ or donation drives have licence permit numbers from the Resident’s Office printed on them?

Of course, if people are participating in the runs for the T-shirts and finisher medals or prize money, it might not matter to the individual.

Please be assured, I am not discouraging you from donating to organisations or participating in runs for charities.

As a person involved in numerous fundraising activities, I would say, please carry on supporting and giving.

We need all the help we can get.

In Sarawak, fundraising licence permits are under the purview of the Sarawak government via the Resident’s Office.

However, why is this licence permit important?

Well, firstly it ensures that the organisation is a legally registered organisation and was granted a permit by the Resident’s Office under the Public Collections Ordinance 1996 (Chapter 21) under the Licence Application Form (Section 4 (1) (b).

Secondly, a statement of account has to be submitted to the Resident’s Office one year later when you reapply for the permit.

This at least ensures an element of transparency of what happened to the funds raised.

It would be good if more effort is put in by the authorities concerned to remind organisers to apply for the requisite permits for fundraising.

I am sure we can visualise a situation where one day a newspaper headline exposes some scam or another related to some fundraising activities.

I am sure you have encountered someone with a guitar, singing songs from coffee table to coffee table with another person holding a donation box and pictures for some children’s charity.

If you are ‘clued up’, you would realise this is not legitimate.

My point I am raising here is, please be an intelligent giver.

It is always worthwhile doing some research on the organiser or the organisation.

The first step would be to authenticate the legitimacy of the organiser, charity or NGO.

Verify before giving.

If they are registered with the ROS, they will have a registration number.

Anyone can go onto the ROS website (http://www.ros.gov.my/semakan-status-pertubuhan/) and do a little digging.

Enquiries can also be made to Pejabat Pesuruhjaya Sukan Malaysia for those registered under the sports authorities.

If a parent-teacher association is doing a fundraiser, people can verify with the relevant school itself.

It is important to determine where your donation is going.

Perhaps eventually a ranking system for charities based on various criteria can be developed and put online.

Since the authority to issue permits is with the Sarawak government, a good template to adopt and adapt could be The Charity Commission UK (https://www.gov.uk/government/organisations/charity-commission). They provide a ranking system based on various statistics.

It would also be helpful if an online application system for the fundraising licence permits were introduced to make it convenient for all parties.

Ultimately, it is, of course, the choice of a donor where a donation would go.

But an informed and intelligent choice is good. They might, of course, be other relevant factors which also are important for an individual donor when they give.

Thanks for being a caring donor.

The views expressed are those of the author and do not necessarily reflect the official policy or position of the New Sarawak Tribune.