Deputy Speaker, Sir, I rise in support of the Charities (Amendment) Bill. I declare that I sit on the board member of two large-sized charities serving in the capacity of a volunteer. The Community Development Council (CDC) of which I am Mayor is also classified as an Institution of Public Character (IPC) governed by the Charities Act.

The charity landscape. There are almost 2,300 registered charities in Singapore in 2016. Registered charities are exempted from paying income taxes and property taxes pertaining to properties used for that charity.

The charity landscape is not homogeneous. Charities come in various shapes and sizes. Out of the registered charities in Singapore, about half or more than 1,000 are religious organisations, such as churches and temples. One in five – about 18% – support social and welfare causes; and others in health, healthcare, education, sports, animal welfare and others.

Let me give us a sense of the size of the charity sector. The overall annual receipt, that is, Government grants, donations and fees of the charity sector is $16.4 billion. Out of this, $2.7 billion are donations by the public. This $2.7 billion donation pie is larger than the size of the current budget of MSF, which I know is about $2.5 billion.

The importance of the charity sector cannot be under-stated. Many of them play a key role in our society. Some of them partner Government in providing essential services from education to health to social assistance. Some fill the gaps where public goods are lacking. The more organised and larger religious groups fill the spiritual needs of the lives of citizens; command influences over their congregations and play a role in religious harmony in a multi-racial, multi-religious society, such as ours.

There are several key trends that I have observed in the Singapore society that calls for higher involvement of and greater attention to the charity landscape. These key trends include:

(a) a rapidly ageing population resulting in higher demands for healthcare and other services, and fears of retirement inadequacy;

(b) the breaking down of the traditional assumption by both children and parents that family, questioning if family should be the first port of call when needs arise in a family;

(c) the rise in non-traditional family make-ups, such as transnational family members, single parents either widowed, divorced or unwed;

(d) the rise in mental health issues;

(e) rise in Technology and the prevalence of social media as a way of life, therefore online appeals and cashless transactions are some examples;

(f) higher societal expectations as a result of a better educated and vocal population; and

(g) the rise of religiousity, religious fundamentalism and risk of terrorism in a Singapore that is home to at least 10 religions.

Out of these societal shifts in Singapore arise new causes and areas of passion for which new charities support. There is also a notable rise in the number of large-sized charities with more than $10 million income and a rapid rise of the number of new charities seeking registration, both as charities and as IPCs.

Even traditional philanthropists have chosen to register their own charities to tap on public funding and tax-exempt benefits to further their own pet causes.

Along with the rise in the number of charities, are also high profile controversial cases starting from the 2005 National Kidney Foundation saga, Ren Ci and then City Harvest and recently the Bone Marrow Donor Programme. This has given rise to public concern and higher scrutiny by the charity watchdogs; and most likely contributed also to the review of the Charities (Amendment) Bill today.

Four focus areas. Now, after studying the provisions in the Bill, I would like to raise four areas for the Ministry to consider. One, an Industry Transformation Map; two, on enforcement; three, on the protection of those who acted in good faith; and fourth, the cost of governance.

First, on Industry Transformation Map. Sir, the rapid changes in Singapore's society place a greater onus on the Office of the Commissioner of Charity (COC) and its partners to beware of "conducting business as usual". In particular, I refer to the COC's aspiration to be a "proactive charity advisory" as stated in its Annual Report. So, more than tweaking the Charities Act, the charity "industry" needs a better landscape study and I think, an Industry Transformation Map is in order, much like what the Future Economy committees are doing to keep up with the times.

In developing this Map, we need a better differentiation of charities. The charities landscape is too diverse to segment the players based on the size of their budgets which is the current way by which the Charities Act is implemented through the Code of Governance. Charities should be differentiated and treated, even nurtured according to the different nature, priority, strengths and pitfalls in the different sectors in the charity landscape. Some charities, such as the step-down community hospitals and special schools, were set up to respond to the call of Government to meet the needs of target beneficiaries. Surely, the governance of and support of such healthcare and social charities which are developed to complement Government's efforts should be different from those, say, in the religious sector or charities which are just private endeavours.

A more empathic and nurturing hand and touch ought to be provided to those who are Government's partners, for example, in healthcare, education and other social challenges. It is too limiting to police these partners through stringent codes of governance only. Efforts ought to be made to help future-proof them; and ensure their skills and competencies are updated to survive or even thrive in a society that is affected by technological and other social disruptions.

The current code of governance applied to all charities according to the tier in which the size of their budgets fall, smacks of, to me, a bit simplistic cookie cutter perspective of charities and does not take into account the impact and contribution of different charities to society. So, there ought to be a better differentiation of charities and more should be done for those who are Government's partners in service delivery in the social landscape especially.

Secondly, an Industry Transformation Map, if developed should also provide better clarity and direction. As a "proactive charity advisory", the aspiration of the COC and its partners should also provide greater clarity and direction on the different sectors in the charity landscape. There ought to be published mini-blueprints of the state of the union in each sector's landscape, strengths, the concerns, areas of needs and strategies to plug any gaps that Government has not or will not step in. Potential charities can then be advised by the COC and its partners or even incentivise to direct and deploy resources to where the needs might be.

I can think of emerging and critical needs such as home-based healthcare services for the elderly, transnational family challenges; services for adults with disabilities and coordination of overlapping services in elderly support – areas of needs that I see are less than met. I can also think of instances by which the COC and its partners can more effectively advise on areas where there are already duplicate services or overlapping services to scale down fundraising appeals.

An Industry Transformation Map for the sector should also support the diversity of income generation. A "proactive charity advisory" should not only look at policing the authenticity of fundraising appeals. Effective charities have long been encouraged to be more self-reliant and diversify their income streams so that they do not become over-reliant on only donation appeals. Where they can, charities should develop and learn to develop relevant services that are needed by their beneficiaries and generate other income streams. This may come in the form of social enterprises or trading arms of the charities.

Hence, although policing of fundraising appeals is important in order to retain public trust in charities, future reviews of the Charities Act should look at how the COC might support, for example, new developments like social enterprises or other forms of income streams in the charities.

I would like to touch next on the enforcement of the Charities Act. It is well and good to set up a strict regime of governance for the charities. But it is another altogether, to effectively enforce it. It is not uncommon to hear of suspect fundraisers in public places touting for donations. It is also not uncommon to sight charities who were already put on, say, restrictive orders by the COC, to still carry on its activities per normal. In one of the shops selling religious artefacts in my constituency at Waterloo Mall, I have had complaints by constituents about a business owner collecting donations for themselves in a box next to legitimate donation boxes for the Community Chest.

As online fundraising appeals become more common, how does the COC plan to verify the authenticity of the appeals and how donations are disbursed? Sir, in order for the Charities Act to have teeth and in the midst of even more charity applications and fundraising appeals, ways must be found by which the COC and the Sector Administrators and other partners can effectively communicate to the public and work with the public to enforce the provisions of the Act.

Next, on protection of those who acted in good faith. The Charities (Amendment) Bill seeks to strengthen the regulatory framework of the COC and to further empower the Commissioner to bring any "Key Persons" to task – all this to make charities more accountable to the public and to its funders. The Bill proposes that section 2 of the Charities Act be amended to broaden the definition of "Key Persons" who can be brought to task should things go wrong. As a result, members of a charity who, I quote, "provides advice to the charity on the control and management of the administration of the charity" are now also made accountable.

Whereas section 46A of the Charities Act protects the Commissioner, his Deputy Commissioner, his Assistant Commissioner or any officers appointed by the Commissioner; or any Sector Administrator, by guaranteeing "no action, suit or other legal proceedings shall be taken" for anything done in good faith. There is no corresponding protection for the "Key Persons", some of whom are volunteers, which includes key staff and board members who have acted in good faith.

Sir, we should take care that the powers of the Commissioner must not make the participation of individuals so onerous so as to discourage the participation of potential contributors to the charities. Bearing in mind that many Board members are busy people, volunteers with their own day jobs and many key staff in charities do their best within the constraints of the charities, surely, the Ministry should provide some assurance in the Act that they would be protected from liability if they prove to have acted in good faith and also perhaps consider liability insurance as an industry practice for board members and key officers.

Next, on cost of governance. Both poor and good governance comes with a cost. Charities with poor governance standards often find themselves paying the ultimate price of not just having their key officers and board members taken to task by the law, but also the potential closure of the charities impacting lives of its beneficiaries. Good governance, on the other hand, does not come free either and in many cases, paid out of the funders or other donors of the charity.

The cost of governance includes internal and external audits, legal advice for both strategic and operational issues, costs to comply with constitutional and statutory requirements, and even risk management analysis which can take a lot of time and effort; not to mention the time expended by the staff, the management and board members of the charity.

In one of the larger sized charities that I am involved in, the cost of governance can rise to as high as more than $90,000 and that is not including the pro-bono legal services and secretariat services that it obtains from its board members and the time spent to work with the internal and external auditors or professionals. Each fundraising event also carries the cost of an audit of the financial statements of each event. There are also additional hidden costs when charities, for example, run services funded sometimes by more than one funder and then are obliged to produce multiple reports for one same programme as a condition for receiving the grants. All these items add to the operational cost of both large and small charities.

I therefore urge the COC to conduct a study of the different sectors under its Administrators to determine if the costs of governance in each of its sector is too low, just nice or too high and then to provide the necessary support and to rectify the situations as needed.

In conclusion, getting the governance just right. In the UK, Pilotlight Group helps UK charities and social enterprises thrive by harnessing the skills of business leaders. In 2015, the group offers yet another angle to measure the effectiveness of governance using a self-assessment thermometer to determine if governance might be too heavy or too light. The scale that it develops test if the board is too engaged, board members are too engaged or too unengaged. If the structures and procedures of the charities are too restrictive or too loose, if trustee skills are too narrow or too generic to be of use, and so forth. The COC may wish to study this simple tool to help getting governance just right, in addition to its "comply or explain", "yes/no" governance checklist.

Mr Deputy Speaker, Sir, there is more to charities than just keeping their operations solvent and in line with the Charity Commission's governance standards, especially in a time such as this and in view of the increasing significance of some charity players.

Over-governance is costly and stifling. Under-governance, on the other hand, puts the charity and its core mission at risk. The Charities (Amendment) Bill is a good attempt to update the governance regulations to keep up with the times. There is much more to do than to get the governance just right. I hope the COC and its partners will consider my suggestion for the development of an Industry Transformation Map and I hope that the next review of the Charities Act will be more transformational, more visionary and reflective of the vibrancy and the high potential charities can value-add to society.

I offer, in conclusion, the COC my fullest support and assistance if required and I fully support the Bill.