Monday January 25, 2010

Are Malaysia's charities transparent enough?

Monday Starters - By Soo Ewe Jin

A FRIEND sent me a list of the 10 most fiscally responsible charities as published in the latest edition of Worth, a global wealth management magazine.
Other than World Vision, which was listed at No. 10, the other charities are probably not familiar to Malaysian readers.
But the list makes interesting reading because it outlines why these charities have got it right and also provides useful lessons on how we should gauge the worth of a charity.
Founded in 1992 in the United States, Worth is read mainly by high net-worth individuals.
It focuses on topics related to both wealth creation and wealth management, including philanthropy and passion investments.
So, obviously, the charities named in this list can expect more donations from such individuals who do not simply give their money away, but only to those that practise fiscal responsibility.
In Malaysia, we are always happy to give to one cause or another, or even direct to individuals facing some kind of hardship if they are featured in the media.
Dr Rafick Khan Abdul Rahman did a wonderful job to raise RM8,467 in just four days for the Metro Tabernacle Church following the arson attack.
He raised the issue in his blog, gave an account number for people to bank in their donations, and then published the bank statement after the drive was over.
That’s accountability and transparency.
Gone are the days when charities hold flag days or fun fairs to raise money.
Many prefer to get supporters to issue a standing order to the bank or credit card company to ensure prompt and regular donations.
But have you ever wondered how your money is being used?
Are you sure that the bulk of the money has gone into the programmes and not into administrative costs?
In perusing the Worth list, it is clear that the charities cited are responsible with the money given to them.
Give Kids The World, at No. 1, uses 93 cents of every US dollar on its programmes.
At No. 2 is the Environmental Defence Fund which spends 9 cents to raise a dollar in contributions.
In the United States, the typical charity spends 13 cents to raise a dollar.
The Michael J. Fox Foundation set up to study Parkinson’s disease was cited for spending less than 3% of its budget on administrative costs, well below the average 15% that most charities spend.
I hope by now you have started thinking about where your donation is going to and how your money is being used.
From the three examples cited, a good charity is one that spends most of its money on the cause; uses the least amount of money to raise funds; and spends the least on administration.
So, if you see the head of a charity driving around in an expensive car, you should ask to see the books.
I know it is not easy for some charities to raise funds.
The formula seems to be to hold a lavish fund-raising dinner at a five-star hotel, preferably with a VVIP in attendance, with some entertainment thrown in.
People who show up may wonder how much of the money raised has gone to the hotel and how much actually goes to the charity.
I am thankful that we are a charitable people, otherwise many charities will not be able to function and help those truly in need.
But it is just as important that we hold the charities to account, whether they are big or small.
I am glad that World Vision spends only 8.5% of its budget, globally, on fund-raising and for subscribing to various accountability and code of conduct standards and protocols, including the International NGO Accountability Charter and the Code of Conduct for the International Red Cross.
World Vision Malaysia CEO Liew Tong Ngan put it this way: “Accountability and transparency have and will always be the cornerstones of World Vision, globally and within the different countries in which we serve.
“As a responsible steward of our donors’ and supporters’ hard-earned money, we are constantly looking at ways to achieve greater efficiency and effectiveness so that the maximum amount of funds is channelled to those in need.”
l Deputy executive editor Soo Ewe Jin believes that philanthrophy will grow if charities are transparent and held accountable for the money they receive and spend.