Charity and Religion – The issues in ‘godly giving’

By Lee Siew Hua & Jennani Durai, Straits Times, 21 Jul 2o12

SALES manager Benjamin Kong, 39, started giving to his Methodist church in his teens, putting a dollar or two into the offering bag on Sundays. He had simple notions then of how the collection was spent, figuring that ‘the church needs upkeep, the staff need salaries’.

Two decades later, he notices more. The church bulletin carries news about groups supported by his parish, so he senses that cash is worthily deployed. ‘We also get an annual report and I glance at that but don’t query the accounts,’ he says.

He would, however, expect fuller transparency from a charity. So if he donates to a specific cause such as buying walking aids for the disabled but the money is used for something else, he would be upset.

‘But for a church or other religious groups, because expenditure covers such a range of things, people believe the money is going to some good cause somewhere,’ he says. ‘People are less likely to question where exactly the money has gone.’

Across faith groups, this abiding trust in the goodness and wisdom of spiritual leaders seems pervasive.

It is not blind faith but recent charges against leaders of City Harvest Church, for alleged criminal breach of trust, have put back in the spotlight the sensitive issue of religious giving and how best to regulate it.

The sums involved are large. In 2010, religious charities received $1.6 billion.

That figure would be even higher if older institutions such as the Anglican and Catholic churches here, which are exempt from registering under the Charities Act, were included. The stakes are high because the monies being donated are tied to individuals’ faith in their spiritual leaders and God.

The challenge is complicated by the range of religious groups, which differ in size and vintage and leadership structures.

The task is perhaps beyond any one regulator. That is why the Commissioner of Charities (COC) makes plain in its 2011 annual report that it looks to the public to play its role, by ‘donating with generosity and discernment’.

Godly giving

SINGAPORE has in recent years seen the rise of new, rich spiritual players, such as mega-churches. Also, there is a trend of charities engaging in business.

In 2010, the charity sector had a total income of $10.7 billion. Of this sum, the ‘Religious and others’ sector received $1.6 billion (15 per cent) – from donations, government grants and fees for services.

Religion ranked second behind the mighty education sector, which topped the income league of charities by pulling in $6.8 billion (63.4 per cent).

The presence of religious groups is huge. In 2005, the ‘Religious and others’ category formed the lion’s share, or 51.4 per cent, of all registered charities. This figure climbed to 59.5 per cent last year – or 1,245 religious charities.

In all, there are 2,093 charities registered with the COC.

Religious groups may be in a happy place with surging income. But they now cautiously navigate a regulatory terrain that has changed significantly since 2004-2005, when the National Kidney Foundation scandal flared.

In swift response, the authorities set up a Charities Unit in the Ministry of Community Development, Youth and Sports in 2006.

The same year, the Charities Act was amended to empower the Commissioner of Charities to better regulate charities and Institutions of Public Character. A full-time commissioner, Mr Low Puk Yeong, was appointed.

As much as the COC is an enforcer that has initiated 10 inquiries, counting the City Harvest one, it has a gentler face. Indeed, its investigative role seems the exception as, much of the time, it promotes and advises on good governance.

This nurturing role is most visibly played out in its Charity Council. Set up in 2007, it is chaired by Mrs Fang Ai Lian and composed of representatives from the people sector. She points out that the council settled on the best way to build up the charity sector: Balance regulations with best practices for charities to strive for.

So the council introduced a Code of Governance, guidelines for charities that cover tricky issues from board responsibilities to internal financial controls. The code was refined last year and now, compliance is less onerous for smaller charities.

The council also rolled out a multi-million fund for charities to beef up governance through training and IT support, and reaches out to charities.

Room for questions

GIVING is integral to the beliefs of most worshippers. ‘I believe in giving. It is biblical to share your time, life and resources with others,’ says Mr Tong Hong Mun, 25, a director of an entertainment firm who goes to a mega-church.

Preschool teacher S. Nirmala, 48, donates to Hindu temples about six times a year. ‘I don’t think it’s necessary to look at the accounts to see exactly what it’s being used for,’ she says.

Match this personal conviction with the presumption of good – that spiritual leaders are divinely led to do what is right – and believers tend to open their wallets readily for their church, mosque or temple.

Singapore Buddhist Federation chief executive Kua Soon Khe says: ‘Most temple-goers are donating out of goodwill and support for the temple, and will give without asking questions about how the temple intends to spend their money.’

There are pitfalls to this approach. The first is that the faithful lose their ability to ask hard questions about the amounts of money being raised and how these are used.

Second, when someone does raise a challenge, the faithful feel duty-bound to defend any leader accused of wrongdoing

Christian theologian Daniel Koh believes donors should not shy away from asking questions, because it is their duty to be discerning in their giving.

The Trinity Theological College lecturer says: ‘If Christians desire to grow in their faith and be good stewards of God-given resources, they should not be afraid to ask hard but reasonable questions with regard to both faith and practice of the church, including how funds are allocated and managed.’

Mr Mark Sng, an executive committee member of the National Council of Churches of Singapore, says the spiritual leader ‘sets the tone’ when he lets people feel free to ask questions. ‘But if there is an aura of discouraging questions, then of course people feel they are challenging authority if they speak up.’

Mr Willie Cheng, a former partner at consulting firm Accenture, who now sits on the boards of commercial and non-profit organisations, believes there is a case to be made for religious charities to be regulated in a ‘differentiated’ way.

He wrote in a Straits Times commentary last Saturday that most believers give with a ‘blanket fiat’ for their leaders to do with the donation as deemed fit. Evangelisation and a leader’s influence are also issues.

This challenges regulators when they seek to implement a single approach across charities. ‘Perhaps it is time to review such differences so that a consistent yet differentiated approach can be devised for better charity governance and regulation, and greater harmony,’ he suggested.

But Professor Mak Yuen Teen, a National University of Singapore (NUS) don and governance advocate, does not fully agree. ‘I can tell you that every sector will say it has unique features,’ he says. And most believers will not give blanket fiat. ‘If they found their leaders driving around in a Ferrari, I think most would have a problem with it.’

Separation of roles

MRS Fang of the Charity Council is clear that ‘good governance should be the cornerstone of every organisation, whether religious or secular’.

She says: ‘The Charity Council is committed to work harder to demonstrate that good work and good governance are not mutually exclusive – in fact, good governance allows the charity to serve their beneficiaries even better in the long run.’

For religious charities, there arises an issue of how much say spiritual leaders should have in matters of finance. These leaders are often held in esteem by their flocks, so it can be difficult to question their actions unless they are blatantly wrong.

Healthier checks and balances between board and management are thus imperative. For religious groups, the board is usually controlled by lay spiritual leaders, while the management is composed of clergy who are full-time, paid religious leaders.

Says Associate Professor Ho Yew Kee, vice-dean of finance and administration at the NUS Business School: ‘There needs to be clear communication and transparency such that the clergies understand that the lay leaders are helping them to discharge their responsibilities and keep them on the straight and narrow path.’

Take the case of a church welfare fund, he says. With their ‘pastoral heart’, the clergy may dispense this fund without checking recipients’ identities. Lay leaders set up procedures to protect both clergy and organisation from accusations of poor governance or embezzlement.

To steer clear of such minefields, it seems best to aim for a separation of roles and powers. Let the clergy do what they excel in – spiritual teaching and ministry – he suggests. And let lay leaders manage the administration, finance, human resources and all non-religious matters.

The Anglicans, for example, have a structure of government with a ‘Synod’ composed of the the houses of the bishop, clergy and laity.

‘Ecclesiastical matters lie primarily with the clergy led by the Bishop, whereas temporal matters such as property and money matters are decided with maximum lay participation in the Synod and Standing Committee,’ says Mr Charles Leong, the Synod’s assistant secretary.

The Catholic Church has a different structure. Archbishop Nicholas Chia has personal oversight of finances. He chairs the Finance Committee of the Archdiocese and requires each church to send him a monthly financial statement.

The Archdiocese double-checks numbers before they are made available, at the parish’s discretion, to parishioners.

Vigilance lessens the likelihood of another Father Joachim Kang case. In 2004, he was sentenced to 71/2 years’ jail for misappropriating $5.1 million in church funds while serving as a parish priest at the Church of St Teresa. He was released in 2008 for good behaviour.

At the other end of the spectrum, the pastor of a small independent church whose board struggled with compliance issues, says: ‘We were faced with increased fees from auditors.’

Still, he thinks the COC has given ‘latitude’ to smaller religious charities like his.

This is where the regulator has tried to respond flexibly in an ever-diverse religious landscape. The guidelines in its Code of Governance are tiered according to the size of charities.

For example, charities with gross annual receipts of more than $50,000 are asked to meet this guideline: Staff should not comprise more than one-third of the board. Smaller charities are not asked to do so.

This enabling ethos may have helped improve governance standards. In 2010, 95 per cent of charities met at least 80 per cent of the Code of Governance guidelines. This is an improvement from a compliance rate of 80 per cent in 2008.

If groups focus on such compliance and self-regulation, perhaps there is little need for more regulations. Prof Ho of NUS, who helped refine the Code of Governance, says: ‘We can always have more rules. We need to ask: Will they be effective? What is the cost involved?’

The Charity Council itself likes self-regulation and Mrs Fang emphasises: ‘We should avoid a knee-jerk reaction to an isolated incident. The Charity Council wishes to encourage self-regulation in the sector as regulation alone will never be sufficient to prevent high-profile incidents from occurring.’

She highlights the principle of filling the board with the right people. ‘We also want to avoid strangling the sector with overly tightened regulations,’ she says. ‘Rather than rely solely on increased regulation, stakeholders can play their part to prompt charities to be more accountable and transparent.’

The faithful will have to step up to the plate as Singapore’s vibrant charity sector spurs a debate over governance and religion. And never more so than now, in an age of active citizenry, wealth and religious interest.

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