Summary of Regulatory System for Charities

For optimal readability, we highly recommend downloading the document PDF, which you can do below.

Document Information:

(September 2006)


Estimates on the size and economic value of the NGO sector:

There are 1,747 registered charities in Singapore as at 31 December 2004 . Charities
established for the advancement of religion remained the majority at 53%.

As at 31 December 2003, more than half of the 1,659 registered charities had annual income
(including donations and Government grants) of less than $250,000. Of these, 292 registered
charities had i ncome of $50,000 or below. 47 large charities had income exceeding $10
million and received more than 80% of the $5 billion of total income of all registered charities.
(Ref: Annual Report of the Commissioner of Charities for 2004)
Different types of NG Os that exist:
 Charities
 Voluntary Welfare Organisation s (VWO s)
 Institution s of a Public Character (IPC s)

Legal definition(s) of the different types of NGOs that exist:

Charities are organisations set up for any of the following charitable purposes :
 relief of poverty;
 advancement of education;
 advancement of religion; and
 other purposes beneficial to the community .
The charitable status is conferred by the Commissioner of Charities (COC) or by the Minister
(for exempt charities) .

A Voluntary Welfar e O rganisation (VWO), as defined by the National Council for Social
Services ( NCSS ), refers to an organisation that:
 is a voluntary set -up and governed by an elected volunteer board ;
 is non -profit making ;
 promotes and provides social and community servi ces in financial, emotional,
educational, health and social aid and support ;
 caters for those in need, distress or at -risk and helps the disadvantaged and disabled to
be independent ;
 is driven by a strong spirit of volunteerism ; and
 works with volunteer s, government authorities, public and private organisations and the

An approved Institution of a Public Character must either be a charity (as above) or an
institution or fund which is:
 a hospital not operated or conducted for profit;
 a publ ic or benevolent institution not operated or conducted for profit;
 a public authority or society not operated or conducted for profit and which is engaged
in research or other work connected with the causes, prevention or cure of disease in
human beings, where the gift is for such activities;
 a university or a public fund for the establishment, maintenance, enlargement or
improvement of a university;
 an educational institution not operated or conducted for profit, or a public fund for the

establishment, m aintenance, enlargement or improvement of such an educational
 a public or private fund for the provision, establishment or endowment of a scholarship,
exhibition or prize in a university, or an educational institution not operated or
conducte d for profit;
 a public fund established and maintained for the relief of distress among members of
the public;
 a charitable institution or a body of persons or a trust established for charitable
purposes only; or
 an organisation not operated or conducte d primarily for profit which is engaged in or
connected with the promotion of culture or the arts or with the promotion of sports.

In addition, its activities must be beneficial to the community in Singapore as a whole, and not
confined to sectional inte rests or group of persons based on race, creed, belief or religion,
unless otherwise approved by the Minister for Community Development Youth & Sports.

Requirements for creating an NGO:

To be registered as a charity, the organisation must be set up as a:
 Society (under Societies Act) ,
 Company limited by guarantee not having a share capital (under Companies Act) , or
 Trust under a trust deed .


NGOs which are required to register and details of the agencies they must register with
(including contact details) :

They may register with the following agencies:

 Registry of Societies (to register as societies)
 Accounting & Corporate Regulatory Authority (ACRA) (to register as companies)
 Law firms which are qualified to set up trusts unde r a trust deed.

Organisations are required to register as a society, a company limited by guarantee or a trust,
before they can register as a charity.

NGOs which may register voluntarily and details of the agencies they can register with
(including c on tact details) :


The registration process:

All charities set up in Singapore must apply for registration under the Charities Act within 3
months of its set -up unless they are exempted from doing so. It is the duty of charity trustees
to apply for registration. There are no fees payable for the registration.

There are altogether 6 sector administrators covering the social service, health, education,
sports, arts and heritage , community and youth sectors . The charity will apply for registration
directly with its Sector Administrator (SA).

To apply for registration as a charity, application form and the following documents have to be


 A set of the governing instrument (i.e. Memorandum and Articles of Association,
Constitution, Trus t Deed, etc.),
 Latest set of audited Statements of Accounts, (if available),
 Particulars (names, I.C No., address, position held in committee, date of appointment) of
the charity trustees /management committee,
 Information on activities carried out by t he organisation to attain its objectives, (For newly
established charities, detailed plans of activities to be carried out within the first two years
of establishment should be furnished.)
 Information on whether the activities or programs of the society ar e open to the public or
confined only to membe rs or sectional interest groups,
 Information on whether the society is affiliated to any organisation in Singapore or
overseas and the nature of the affiliation (if any),
 Information on whether fees will be cha rged for their activities ,
 Photographs (both internal and external views) of the charity premises, particularly for
faith -based cases. (This will give us an idea of the size of the faith -based organisation
and whether it is open for public worship.)

The Commissioner’s office provides charities with assistance in registrations by providing
information and guidance via hotlines, websites and brochures.


Requirements for governing documents:

The governance requirement s are as follow:
 A set of the governing instrument (i.e. Memorandum and Articles of Association,
Constitution, Trust Deed, etc.),
 Particulars (names, I.C No., address, position held in committee, date of appointment) of
the charity trustees / management co mmittee,
 Information on activities carried out by the organisation to attain its charitable objectives,
(For newly established charities, detailed plans of activities to be carried out within the
first two years of establishment should be furnished.)

The Commissioner’s office provides assistance to charities in meeting governance
requirements by providing information and guidance via hotlines, websites and brochures.

What responsibilities and/or liabilities are imposed upon governing bodies of NGOs?

“Charity trustees ” is defined in the Charities Act as persons having the general control and
management of the administration of a charity. Their duties under the Act are to:
 register the charity;
 notify the Commissioner of change in trust or particulars or if the charity ceases to exist;
 ensure accounting records are properly kept;
 preserve accounting records for at least 7 years;
 prepare annual report and statement of accounts within 6 months for the end of the
financial year;
 provide any interested person with a copy of the charity’s most recent accounts within 2
months of the request.

Regulations relating to payments and distribution of profits :

Remuneration & B enefits
According to the NCSS Code of Governance for VWOs, Board members and v olunteers shal l

serve without a remuneration for their voluntary service to the VWO so as to maintain the
integrity of serving for public trust and community good instead of personal gain. However,
VWOs may reimburse Board members or volunteers for out -of-pocket expense s directly
related to the service.

In addition, the Guide to Best Practices for IPCs states that the IPCs shall disclose to the
public the remuneration and/or benefits received by Board members for their voluntary
service to the IPC.

Distribution of pro fit/ surplus
Charities incorporated as c ompanies will generally have governing instruments and
memorandum of associations that restricts the distribution of their profit/ surplus to members.
Although there are no legal restrictions on registered societies , they may have their own
constitutional clauses on the distribution of their profit/ surplus.

All charities with an IPC status have to apply their tax -deductible donations for purposes in
line with the objectives which they have applied for. Hence, the distribution of the IPCs’
profit/surplus will generally not be allowed.


Collecting information:

All c harities are required by the Charities Act to submit their annual report to the
Commissioner of Charities every yea r. The annual report to be prepared by the charity
trustees of a charity shall contain —
(a) the following particulars:
(i) a description of the instrument setting up the charity;
(ii) the charity registration number;
(iii) where the charity is a socie ty registered under the Societies Act or a company, the
registration number of the society or the company;
(iv) the registered address of the charity;
(v) the names of the charity trustees and their dates of appointment;
(vi) the names, designations a nd dates of appointment of the members of the
management committee, advisory council or other similar body, if any; and
(vii) the names of the bankers, lawyers, auditors, investment advisers or other advisers of
the charity;
(b) a report by the charity tru stees containing —
(i) an explanation of the objectives of the charity and a description of the way in which
the charity is organised, and the policies adopted during the financial year in
pursuance of its objectives;
(ii) a review of the activities dur ing the financial year;
(iii) a review of the financial state of the charity and an explanation of all major financial
transactions and salient features of the statement of accounts; and
(iv) an explanation of the purposes for which the charity’s assets are held and an
indication of the charity’s future plans and commitments, with particular regard to on –
going items of expenditure, projects not yet completed and obligations not yet met;

(c) a statement of accounts or, if allowed, a receipts and payme nts account and a
statement of assets and liabilities.
The powers of Commissioner of Charities is such that any person who, without reasonable
excuse, is persistently in default in relation to any requirement imposed under the Charities
Act shall be guilty of an offence and shall be liable on conviction to a fine not exceeding

The Commissioner’ s office provides assistance to charities in their annual submissions by
providing information and guidance via hotlines, websites and brochures.

Analys is of information:

The Commissioner’s office examines the amendments to governing instruments, statement of
accounts, annual report and returns from charities. Staff will contact the charity if
clarifications and more information are required. Generally , verification of the accuracy of
accounts will be made by appointed external auditors if the Commissioner of Charities
institutes an investigation or inquiry on any particular charity.

Making information publicly available:

(1) Any annual report or o ther document kept by the Commissioner of Charities in pursuance
of the Charities Act shall be open to public inspection at all reasonable times —
(a) during the period for which it is so kept; or
(b) if the Commissioner so determines, during such lesser period as he may specify.

(2) Where any interested person —
(a) requests the charity trustees of a charity in writing to provide him with a copy of the
charity’s most recent accounts; and
(b) pays the charity trustees such reasonable fee (if any) as t hey may require in respect of the
costs of complying with the request,
those trustees shall comply with the request within the period of 2 months beginning with the
date on which the request is made.


Requirements and s tandards:

Please refer to Section 4 on collecting information above.

Charities have to comply with annual reporting requirements (Annual Returns, Annual
Reports, Audited Accounts). Charitie s are encouraged to put up key financial information on
the webs ite so that donors and the public can better assess if they want to support these
charitie s. Charitie s are to follow the requirements of the Financial Reporting Standards.

If charities fail to comply, their applications to issue tax exempt receipts and p ermits to do
fund -raising may be affected.

Analysis of information :

Charities are required to submit their annual financial accounts/statements to the COC and
ROS (for societies) or ACRA (for companies). Government agencies do routine checks on

the a ccounts. Complaints received by the authorities about financial irregularities are also
looked into seriously.

Government agencies usually rely on the external auditors’ reports. For large charities e.g.
income is more than $10m, separate audits may b e commissioned. The current legislation
allows for government agencies to have access to information on accounting, programme s
and activities if needed.


Regulatory intervention:

The legislation was recently amen ded giving investigative pow ers to all bodies monitoring
charitie s. W hen the monitoring bodies suspect mismanagement whether it has to do with the
service or the board, these bodies can initiate a preliminary investigation and have full access
to informat ion. The Commissioner of Charities has the power to remove and replace trustees ,
institute a scheme to administer the charity and manage the property of the charity if needed.

Right of appeal:

In th e event of an investigation, charities are given a fa ir hearing and asked to produce
evidence to substantiate their stand. The Commissioner of Charities can decide on how the
funds seized or received are distributed, in accordance with the constitution of the charity . In
the case where a charity is de -regis tered, it must provide the Commissioner with evidence
that remaining funds have been distributed in accordance with its governing instrument.


Tax exemptions:

Charities can enjoy income tax exemptions if they spend at least 80% of their total income
from the preceding year on charitable objects in Singapore . Charities which are IPCs can
also issue tax -exempt receipts for direct donations that are either in cash or in -kind. Charities
that are registered as Companies Lt d can invest in accordance with their constitutions.

Trading :

Although there are currently no special restrictions on trading by charities , they may have
their own constitutional clauses on the distribution of their profit/ surplus.

All charities with an IPC status have to apply their tax -deductible donations for purposes in
line with the objectives which they have applied for. Hence, the distribution of the IPCs’ profit/
surplus from trading will generally not be allowed.

Charities generally fund -raise via the following ways:
 Street collections (i.e. flag days)
 House to House collections
 Charity events (i.e. golf tournaments, runs, walkathon, dinners, sale of merchandise etc.)
 TV charity shows and telepolls (i.e. President’s Star Charity)

Fundra ising :

The b asic regulations on public f und -raising that apply to charities are as follow :


a) Ensure that the total expenses incurred on public fund -raising appeals in a financial year
should not be more than 30% of total donations collected through the pu blic appeals in
that year.
b) Have an independent examiner or auditor to certify whether the charities have met the
30/70 rule as part of their annual audits 1.
c) Submit an examiner or auditor’s report on the use of donation monies raised through
public appeals and whether such use is in accordance with the charity’s objectives to
COC no more than 6 months from the close of their financial year.
d) Ensure that information provided to donors, potential donors and the general public in
their public appeals does not c ontain any misrepresentation or material omission that
would lead to a conclusion of misrepresentation.
e) Disclose the name of their organisation, intended use of funds and use of commercial
third -party fund -raisers during their public appeals.
f) Disclose the total funds raised, fund -raising expenses incurred and planned use of funds
raised for each public fund -raising event that raises $1 million or more. The disclosure
should be done online at the end of each financial year (need not be audited or examined
se parately).
g) Maintain separate financial accounts for public fund -raising events that raise $1 million or
more. The accounts need not be audited or examined separately.
h) Ensure adequate control measures for all collection instruments used in public appeals,
e.g. serialise collection tins or pledge cards.
i) Ensure that funds and donations raised through public appeals are used in accordance
with donors’ intentions and the specific purpose as communicated when soliciting for
j) Respect donors’ confident iality e.g. not to transfer donor lists or records without the
donors’ prior approval, respecting wishes to remain anonymous and to be excluded from
contact lists etc.
k) In a commercial third party fund -raisers’ arrangement, all donations shall be made dire ctly
to the charity. Fees to the fund -raisers shall be separately paid.

Any organisation that wishes to conduct or participate in any fund -raising appeal for foreign
charitable purposes must apply for a permit from the Commissioner of Charities.

What assistance, advice or guidance is provided to NGOs to assist them in meeting
regulations relating to income?

The Commissioner’s office provides assistance to charities in meeting regulations relating to
income by providing information and guidance via hot lines, websites and brochures. Field
visits will also be conducted to convey regulatory expectations and help charities improve

1 For this computation the charity shall include sponsorships both as expenses and donations when receipts
have b een issued.