Singapore

Transparency and Accountability in NPOs

In the article, “Unlocking the power of Singapore's non-profits”, the Charity Council documented that 48 per cent of the NPOs surveyed openly share their financial statements or annual reports. To strengthen the relationships between NPOs and their donors, it is advisable that financial information is made public.

There are many ready resources available to help NPOs improve transparency and accountability.  One of the ready tools available is the Visibility Guide.  

Ready Resource

The Visibility Guide was developed by the Charity Council. It was rolled out in 2018 and it has since benefitted many NPOs in Singapore.

“This Guide is a framework for charities to effectively communicate impact, governance, and accountability to their donors. By adopting it, charities can help build trust in our giving sector, by promoting transparency and responsible practices.” Ang Hak Seng, Commissioner of Charities

This Guide aims to achieve the following objectives:

  • Helps charities put out key information to their stakeholders in a simple manner
  • Guides donors on each charity’s causes and impacts
  • Encourages transparency, responsible practices, and accountability in an expanding charity landscape that has seen the number of charities increase by more than 20 per cent in a decade

The PARENT framework is an integral part of the Visibility Guide that helps NPOs enhance transparency and accountability:

parent.pngSource: Ministry of Culture, Community & Youth

Putting Ready Resources to Good Use

Methodist Welfare Services is one of the many companies that puts the Visibility Guide to good use. The Guide illustrated key statistics on the number of clients and beneficiaries, as well as programme outcomes. It uses illustrations and infographics to show their fundraising income and operating expenditure for the financial year. This helps readers to identify relevant and important information readily.

Similarly, SATA CommHealth (“SATA”) adopted the PARENT framework to enhance their level of transparency. It allows SATA to share their future plans with their stakeholders. Some of these plans include expansion of community services outreach to various parts of Singapore, collaborations with other organisations to provide integrated care to the community, and growth and improvements of their internal capacity and capability.  

Develop Healthy NPO-donor Relationships

To strengthen NPO-donor confidence, NPOs need to put in place widely accepted corporate governance policies. That means they have to regularly update donors with well-documented information about their contributions, the impact of these contributions, and the organisation’s progress. It is also critical to shore up support for NPOs leadership teams by sharing the teams’ backgrounds and qualifications.

Both the Children’s Cancer Foundation (“CCF”) and the Food from the Heart routinely communicate with their donors and share financial information. For example, at CCF, fundraising partners are regularly updated with fundraising drives’ policies. Non-profits are fully accountable to all their donors with high level of corporate governance and financial management. These have proven to help boost donors’ confidence.

Likewise, longstanding commitment to transparency has enabled Food from the Heart to boost its fundraising activities as well as recruit more volunteers. An annual summary of activities and independent audit, detailed in its annual reports, ensure reliable financial accounting and documentation for tax deductions, all of which build trust with its large, diverse and growing number of stakeholders.

Advice for Small Charities

It is imperative that small charities, who often have limited budgets, can compete with larger organisations especially on individual donors as the source of donations. By focusing on the PARENT framework, smaller charities must have three main goals to give them an edge:

1. Corporate Governance Disclosures

Smaller charities do not need professional outsourced investor relations or public relations’ help to create simple disclosures on how the Board of Independent Directors are supervising the operations and managing risks of the organisation. Details such as the composition and the roles and responsibilities of the Board, finance committee, audit and risk committee, governance committee, nominating committee, human resources committee, programmes committees, etc.; selection, appointment and renewal of Board members, frequency and attendance of Board meetings, and whether Board members receive any remunerations, etc. can easily be obtained from internal records. Individual donors want to know whether there are sufficient oversight to ensure that their money is being put to good use.

2. Emphasise the Impact of the Organisation

The main reason people prefer to donate to smaller charities is due to the increased relative impact of their donations, with the contrast of staff overspending being a major deterrent for donating. Smaller charities with lean manpower can use this to their advantage by emphasising to donors how their donations have been spent and the direct impact they have had on the cause. Sharing of statistics, such as the number of beneficiaries benefitted and the magnitude of outreach created through a website, is a great way where smaller charities can increase their competitiveness.

3. Outsource IT to a Managed Services Provider

Small charities can also leverage cloud technologies to offload non-core but critical functions. With the lack of in-house IT experts, small charities can choose to engage a reliable IT managed service provider that allows them to have different IT domain expertise at a competitive cost. By outsourcing IT functions like ERP or CRM business applications, cybersecurity, data protection or even Microsoft 365 management, these charities can free up their time and resources for other business critical matters. 

To find out more and how our NPO team can assist you, please consult our specialists:

Woo E-Sah 
Partner & Industry Lead 
[email protected]
T: +65 6594 7843

Sovann Giang 
Senior Director & Deputy Industry Lead 
[email protected]
T: +65 6594 7892