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Charity Portal - Charities

Charities are organisations set up exclusively for any of the following charitable objects:

(a)           the relief of poverty;
(b)           the advancement of education;
(c)           the advancement of religion; and
(d)           other purposes beneficial to the community. The following purposes are potentially
                  charitable if they benefit the community:
(i)              the promotion of health;
(ii)            the advancement of citizenship or community development;
(iii)           the advancement of arts, heritage or science;
(iv)           the advancement of environmental protection or improvement;
(v)             the relief of those in need by reason of youth, age, ill-health, disability, financial hardship or other disadvantages;
(vi)           the advancement of animal welfare; and
(vii)          the advancement of sport, where the sport promotes health through physical skill and exertion.
 
REGISTRATION OF CHARITIES
 
As long as your organisation/trust/foundation is set up exclusively for charitable purposes and carries out activities to achieve these purposes, your organisation/trust/foundation must apply to register as a charity within 3 months after its establishment.
  
Before the Year of Assessment 2008, all registered charities are required to spend at least 80% of their annual receipts on charitable objects in Singapore within two years in order to be free from paying income tax. With effect from the Year of Assessment 2008, all registered charities will enjoy automatic income tax exemption without having the need to meet the 80% spending rule. In other words, they do not need to file income tax returns effective from the Year of Assessment 2008.
 
For properties which are used for exclusively charitable purposes, property tax may be exempted in full or partially upon application and review by the Comptroller of Property Tax. For more information, please refer to IRAS website.
 
 
Conditions For Registration As A Charity
 
Under the Charities (Registration of Charities) Regulations, charities will have to comply with the following conditions for charity registration:
 
(a)       the purposes/objects of the institution must be exclusively charitable; 
 
(b)       the institution must have at least 3 governing board members, of whom at least two must be Singapore citizens or permanent residents; and 
 
(c)       the purposes/objects of the institution must be beneficial wholly or substantially to the community in Singapore.
 
ICO/Grantmaker/FCPT Schemes
 
If your organisation is unable to meet the above registration conditions, you may wish to consider applying to register as a charity under the following schemes where some of the charity registration conditions are waived:
  • International Charitable Organisations (ICO) Scheme
  • Grantmakers Scheme
  • Foreign Charitable Purpose Trusts (FCPT) Scheme
These schemes are formulated to develop Singapore into a premier philanthropic hub. The detailed guidance notes on the schemes are attached in the links below:
 
Other Registration Requirements:
 
(a) Names of Charities
 
In an effort to tighten the registration of charities, the following words can only be used in the names for new charities if the respective criteria are met. This is to prevent the misuse of certain words that will convey the wrong impression to the public. 
 
(a)       "Foundation" - Allowed only if the organisation is:
  • Self-funded by an individual, family or for-profit company to aid the organisation's intended charitable purposes; or
  • Financed by an endowment for such an organisation.
(b)       "International" - Allowed if the organisation has objects and activities serving beyond local geographical boundaries.
 
(c)       The use of the word "Singapore" in front of the name of the charity, e.g. Singapore ABC Charity, is prohibited. Instead, the word "Singapore" or its abbreviation can only be used within brackets at the end of the charity's name, e.g. ABC Charity (Singapore) to indicate the charity's place of registration.
 
(d)       The name of a charity cannot be wholly in foreign language. It must include an English term to differentiate the nature of the organisation (e.g. Temple, Church etc). 
 
 
 
 
 
REGISTRATION OF CHARITIES - GOVERNING INSTRUMENT
  
(b) Governing Instruments
 
The following are the different types of governing instruments:
  • Constitutions (for charities set up as Societies)
  • Memorandum and Articles of Association (for charities set up as Companies Limited by Guarantee)
  • Trust instrument (for charities set up as Trust). 
To meet the requirements for registration under the Charities Act, the governing instrument should include the following provisions:
 
(a)       Objectives of establishing the charity
The objects must be exclusively charitable and must also be clearly and concisely stated. Any power to carry out activities in support of the main objectives should be provided under an incidental clause.
 
(b)       Management
There should be at least 3 governing board members. These include Board Members, Management Committee Members, Directors and Trustees. The duties and terms of office of the governing board members should be specified. The Commissioner of Charities or the respective Sector Administrator should be notified of any change in the governing board members.
 
(c)       Conflict of Interest Policy
There should be proper procedures in place to mange conflict of interest. Whenever a member of the Management Board in any way, has an interest (either directly or indirectly) in a transaction, project or other matter to be discussed at a meeting, the member should disclose the nature of his interest before the discussion on the matter begins. In addition, the member concerned should not participate in the discussion or vote on the matter, and should also offer to withdraw from the meeting. The Management Board shall then decide if this should be accepted. 
 
(d)       Quorum
The number of governing board members present to form a quorum for any meetings should be clearly stated. In cases where the charity is incorporated as a company or set up by trust deeds, the minimum number to form a quorum should be three. For charities set up as societies, the quorum at the Annual General meeting should be 25% of the total voting membership or 30 voting members, whichever is the lesser. The quorum at the Committee Meeting should be at least 50% of the governing board members.
 
(e)       Trustee of immovable property (for charities incorporated in any form other than as Companies Limited by Guarantee)
The governing board members must inform the Commissioner of Charities or the respective Sector Administrator of the name of the Trustee and the address of each immovable property, as well as any subsequent changes. 
 
(f)         Amendments to the governing instrument
Any amendments to the governing instrument must be approved by the Commissioner of Charities or the respective Sector Administrator.
 
(g)       Dissolution
The circumstances under which the charity can be dissolved/wound-up should be clearly stated. Upon dissolution/winding-up or cessation to be a registered charity under the Charities Act, any remaining funds and assets (after settling all debts and liabilities) should be given to other registered charitable organisations or exempt charities with similar objectives. The Commissioner of Charities or the respective Sector Administrator must be notified upon the dissolution of the charity.
 
 
 
 
 
The organisation has to be a legal entity set up as either a Society or Company Limited by Guarantee before it can apply for charity status. A Trust can also apply to register as a charity. Applicants must apply through the Charity Portal and ensure that they have a valid Singpass Account before transacting with the Charity Portal. Please apply for your Singpass if you do not already have one.
 
Applicants are required to submit the following information/ documents through the Charity Portal:
(Click here for a checklist of the information required for charity registration)
  • Signed copy of the Governing Instrument;
  • Certified Statements of Accounts for the last 3 financial years (if applicable); and
  • 2-year activities and fund disbursement plan.
The application will be processed by the Office of the Commissioner of Charities (Charities Unit, Ministry of Community Development, Youth and Sports) or the Sector Administrator based on the following categorisation of the applicant organisation's primary activities:
 
There is no charge for registering a charity under the Charities Act.
 
 
The following factors are considered when assessing charity registration applications:
 
(a)       Whether the institution is related to any other institution which has been removed from the Charity register or refused registration as a charity;
 
(b)       Whether the governing board members are capable of proper administration of the institution;
 
(c)       Whether sufficient policies and plans are in place to ensure proper administration of the institution; and
 
(d)       Whether the activities planned by the institution are sufficient to further the charitable purposes of the institution.
 
 
 
MEETING THE REQUIREMENTS AS A CHARITY
 
 
Responsibilities of Governing Board Members
 
Governing board members are members of the governing board of a charity or trustees for a charity having the general control and management of the administration of the charity. The governing board members should be responsible for the charity's performance. 
 
The governing board members are responsible for ensuring that the charity is governed and managed responsibly and prudently such that the charity is solvent, well-run, and delivering the charitable outcomes for the benefit of the public for which it has been set up.  
 
Governing board members must:
 
(a)       be at least 18 years of age;
(b)       not be disqualified as a company director;
(c)       not convicted of an offence involving dishonesty or deception;
(d)       not be an undischarged bankrupt;
(e)       not have been disqualified from being a governing board member, key officer or trustee for a charity by an order made by the Commissioner.    
 
 
Duty Of Care And Prudence
 
Governing board members must:
 
(a)     act in the best interest of the charity and be actively involved in the management and decision making process, and jointly make decisions as a Board on policy matters;
 
(b)     exercise strict control over financial matters of the charity:
  • ensure the charity remains solvent;
  • ensure charitable funds and assets are used reasonably, and only for the furtherance of the charity’s objects; and Commissioner.
  • avoid undertaking activities that will place charity funds, assets and reputation at undue risks.
Compliance
 
Governing board members must:
 
(a)       ensure that the charity complies with the Charities Act and Regulations, and with the requirements of the Office of the Commissioner of Charities or Sector Administrators; 
 
(b)       stay true to the charitable purposes and objects, and abide by the rules set out in the charity’s governing instrument;
 
(c)       ensure proper management of the charity such that it is not open to abuse and avoid conflict of interests; and
 
(d)       comply with the other legislations which govern the charity’s activities such as the Trustees Act, Companies Act and Societies Act, if applicable.
 
The governing board members’ key duties under the Charities Act are as follows:
 
(a)       Charity Application: Apply for the charity to be registered within 3 months and to supply documents and information required for the purpose of the registration.
 
(b)       General Administrative Duty: Notify the Commissioner of Charities/Sector Administrator within 7 days if the charity ceases to exist or if there is any change in its trusts or in its particulars entered in the register.  This includes:
  • any removal of governing board members or appointment of new governing board members to fill a vacancy;
  • any change to the particulars entered in the register; and
  • any change to the address of each immovable property and name of each trustee.
                Governing board members should seek approval from the Commissioner of Charities/Sector
                Administrator before any amendment can be made to the governing instrument.
 
(c)       Accounting Records: Ensure that accounting and donation records are properly kept and preserve the accounting records for at least 5 years.
 
(d)       Annual Report: Prepare an annual report and statement of accounts of the charity in respect of each financial year.
 
(e)       Submission: Submit the annual report and statement of accounts to the Commissioner of Charities/ Sector Administrator within 6 months from the end of the financial year of the charity. In addition, all IPCs regardless of income are required to seek approval from the Commissioner of Charities/Sector Administrator for their auditor and change of auditor every 5 years.
 
For accounts with Financial Year ending before 1st March 2011:
  • Accounts of all IPCs have to be externally audited.
  • Charities which are companies limited by guarantee have to be audited based on the requirements under the Companies Act.
  • For the other charities, those with annual income or expenditure exceeding $250k are subject to external audit.

For accounts with Financial Year ending on or after 1st March 2011:
  • Accounts of all IPCs will continue to have to be externally audited.
  • Charities which are companies limited by guarantee will continue to be audited based on the requirements under the Companies Act.
  • To provide greater flexibility, the new audit thresholds for the other charities have been revised upwards, as shown in the table below:
     
    Income/Expenditure Requirement
    $250k or less Accounts can be examined by an independent person who the governing board members believe have the relevant ability and practical experience. No change.
    Between $250k and $500k Accounts can be examined by an independent person who is a member of the Institute of Certified Public Accountants of Singapore (ICPAS) or who possesses the necessary qualification to be a member of ICPAS.
    Above $500k Accounts have to be externally audited by a public accountant.

    Independent Examiners can refer to the Guidance for Independent Examination on how to carry out the independent examination. Independent Examiners can also refer to the sample Independent Examiner's Report to assist in the preparation of their report to accompany the financial statements.
Governing board members are encouraged to adopt the Code of Governance for Charities and IPCs, which sets out the principles and best practices on key areas of governance and management of charities and IPCs.  
 
 
 
Governing board members are required to file annual reports within six months from the end of the financial year to the Commissioner of Charities/ Sector Administrator.
 
Annual report of a charity should be prepared in accordance with the requirement set out in the Charities (Accounts and Annual Report) Regulations. The annual report should contain the following:
 
(a)   Information relating to the charity or its governing board members or officers:
 
  • Description of the instrument setting up the charity (e.g. society, company or trust deed);
  • Singapore Unique Entity Number of the charity;
  • Registered address of the charity;
  • Particulars of the governing board members/management committee; and
  • Names of advisers of the charity (e.g. bankers, lawyers, auditors, etc.).  
(b)   Report by the governing board members:
 
  • An explanation of the objectives of the charity;
  • The policies adopted during the financial year;
  • A review of the activities carried out by the charity during the financial year;
  • Review of financial state; and
  • Future plans and commitments.  
(c)   Statement of Accounts.
 
  • Click here to view the Charities Accounting Standard (CAS). An accounting template and explanatory notes is also available to assist charities in the preparation of your accounts according to the CAS.
  • For charities with gross income or total expenditure below $500k and needs to have their financial statements reviewed by an independent examiner, please refer to the Guidance on Independent Examination and a sample of the Independent Examiner's Report for Independent Examiner's adoption. This Guidance is applicable for the examination of financial statements of accounting periods ending on or after 1 March 2011.   
(d)   Charities with gross income or total expenditure exceeding $500k, please refer to the Charities (Accounts and Annual Report) Regulations for the additional annual report requirements to be fulfilled.
 
 
 
Large charities will have to comply with additional rules relating to governing board members and auditors.
 
A large charity refers to a charity with gross annual receipts of not less than $10 million in each of the last 2 financial years.
 
These additional rules include:
 
(a)       Having at least 10 governing board members
(b)       Financial statements to be audited by auditors approved by the Commissioner of Charities/Sector Administrator
(c)       Auditor to be changed every 5 years, with the Commissioner of Charities’Sector Administrator’s approval
 
Click here to download a copy of the auditor’s declaration.
 
 
 
All charities which are subject to external audit are required to post a summary of their financial information online. This includes all charities set up as companies, and all other charities with annual income/expenditure over $500,000.
   
The changes will apply for financial years ending or after 1 January 2013.
 
 
 
 
PUBLIC FUND-RAISING APPEALS
 
Charities, commercial fund-raisers, commercial participators and any other entity should comply with the following requirements when conducting public fund-raising appeals. A commercial fund-raiser is anyone who is engaged at a fee to fund-raise for a charitable cause and a commercial participator is anyone who carries on a business (of non fund-raising nature) and in the course of the business raises fund for a charitable cause. 
  1. Written Agreement with Beneficiary Charity
    1. All entities who wish to raise funds for a charity must have a written agreement with the charity before soliciting funds.
    2. The agreement with the charity must contain the following information:
    • Place and date of appeal and fund-raising method;
    • Percentage of proceeds to the charity;
    • Timeframe within which proceeds will go to the charity; and
    • Fees of the fund-raiser.

  2. Use of commercial fund-raisers: Where commercial fund-raisers are engaged in any public fund-raising appeals, all donations received must be made directly to the charities, individuals or organisations who engaged the commercial fund-raisers. Any payment to commercial fund-raisers must be made by the charities, individuals or organisations separately.

     
  3. Duty to Donors:
    1. Any information provided to donors or to the general public is accurate and not misleading.
    2. Disclose the name of their organisation, intended use of funds raised (including the cause and/or beneficiaries) and whether any commercial fund-raiser has been engaged in soliciting the donation.
    3. If the fund-raising is done by commercial fund-raisers or commercial participators, all solicitation and publicity material must be accompanied by a written statement with the additional information:
      • The proportion of total proceeds that will go to charitable causes;
      • The breakdown of proceeds to each charity (if funds are raised for more than one charity);
      • The name of the commercial fund-raiser/commercial participator and its status as a commercial entity;
      • How the fund-raiser/participator's remuneration is calculated.
    4. Information relating to donors is kept confidential. No information relating to a donor should be given to any other person without the consent of the donor.
    5. Arrangement to solicit donations must have adequate control measures and safeguards to ensure proper accountability and to prevent any loss or theft of donations.

  4. Use of Donations:
    1. All donations have to be used according to donors' intentions.
    2. If such intention is not specified, donation must be used according to the purpose communicated to the donor during solicitation.
    3. If such intention is not specified and no purpose is communicated to the donor during solicitation, the donation should be used to fund the charity's activities.
    4. If a donation cannot be used, the charity, individual or organisation must refund the donation or use the donation as may be approved by the Commissioner of Charities or Sector Administrators.

  5. Maintenance of accounting records: They must maintain every accounting record for a minimum period of 5 years from the end of the financial year.

    Additional requirements for charities and commercial fund-raisers conducting fund-raising appeals:
     
  6. 30/70 fund-raising rule: Total expenses incurred on public fund-raising appeals in a financial year must not exceed 30% of total donations collected through the public appeals in that year. (See section on “ The 30/70 Fund-Raising Efficiency Ratio ” below)
     
  7. Disclosure of information after fund-raising:
    1. For each public fund-raising exercise which raises $1 million or more, charities must disclose the total funds raised, fund-raising expenses incurred and planned use of funds raised. The disclosure is to be done online (on the charity's website, the Sector Administrator's website or the Charity Portal) at the end of the financial year.
    2. Charities must disclose in their financial statements the consolidated amount of donations received from the public fund-raising appeals in the financial year.
    3. For financial year ending on or after 1st April 2008 and subsequent financial years, the charity has to disclose in its financial statements the total amount of sponsorships if, and only if, receipts or other documentary evidence are available.

The 30/70 Fund-Raising Efficiency Ratio

The fund-raising efficiency ratio is the total fund-raising expenses of a charity to the total gross receipts from fund-raising and sponsorships of the charity for that financial year. All charities are expected to keep their fund-raising efficiency ratio below 30%, which is commonly known as the 30/70 rule.

For the purpose of computing the 30/70 efficiency ratio,

  • “Fund-raising” refers to the receipt of money or other property from any member of the public, which is given in whole or in part for any charitable purposes, solicited or unsolicited.
     
  • However, trading conducting by a charity has been specifically excluded from the meaning of fund-raising for this purpose. Trading, for the purpose of computing the 30/70 efficiency ratio, refers to the provision of goods and services (donated or otherwise) in return for a payment, carried out on a regular basis with a view of making profits to fund the charitable causes.
     
  • “Sponsorship” in the fund-raising efficiency ratio refers only to cash sponsorships that are conditioned upon the provision of direct or indirect commercial benefit to the sponsors.
     
  • For fund-raising done via sale of merchandise, only the net proceeds i.e. the gross amount received from sale of merchandise less cost of relevant goods, will be treated as receipts. The cost of merchandise need not be included as part of fund-raising expenses .

The Formula:

(E + S)
(R + S) 		x 100% < 30%

“E” refers to the total expenses relating to fund-raising for the financial year, including —

  • direct and material indirect expenses of any kind; and
  • payments made to commercial fund-raisers engaged by the charity,

but excluding, in a case of the sale of goods by or on behalf of the charity for fund-raising (and not trading), the cost of the goods sold;

“R” refers to

  • in a case of the sale of goods by or on behalf of the charity for fund-raising (and not trading), the total receipts from such sale (after excluding only the cost of the goods sold); and
  • the total gross receipts from any other fund-raising for that financial year.

“S” refers to total amount of sponsorships in cash received by the charity relating to fund-raising for that financial year that is conditioned upon the provision of direct or indirect commercial benefit to the sponsors.

Please refer to the FAQs section for examples of computing the 30/70 fund-raising efficiency ratio under the revised rule.
 
 
DEREGISTRATION
 
If the charity ceases to operate after it has been registered, i.e. it has wound-up or dissolved, the governing board members will have to inform the Commissioner of Charities/ Sector Administrator within 7 days of the passing of resolution to wind-up or dissolve the charity.
 
 
How to Deregister
 
Along with the notification, charities deregistering will have to submit the following documents to the Commissioner of Charities/ Sector Administrator:
1. Final set of accounts up to date of winding-up or dissolution;
2. Final copy of annual report;
3. Minutes of general meeting in which resolution was passed to dissolve the charity; and
4. Proof of distribution of remaining funds in accordance with the governing instrument.
    (e.g. receipts from organisation which donations have been made to)
 
 
LEGISLATION GOVERNING CHARITIES
 
Charities have to abide by the Charities Act and Regulations that outline the rules on registration, deregistration, submission of accounts, reports, and returns, fund-raising and others:
 
 
Legislation is reproduced on this website with the permission of the Government of Singapore. Acts of Parliament are available without charge at the Singapore Government Statutes.
 
 


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