TAKEAWAYS
Charities are an important component of a society. In fact, they are so important that the United Nations has proclaimed September 5 each year as the International Day of Charity. Charities help to support vulnerable groups and can foster greater cohesion among different groups of people to contribute to social good. Charities in Singapore are no exception. According to the Commissioner of Charities Annual Report 2022 (released in December 2023), there were 2,379 charities as at 31 December 2022. In addition, total donations raised in the financial year 2021 amounted to $2.95 billion.
Notwithstanding the difference in nature, running a charity (or a non-governmental organisation) is no different from running a company. The applicable management principles are the same. For example, risk management is quintessential, focusing on the “What could go wrong”. In the current day and age, digitalisation is another area of emphasis as organisations continuously explore ways to do things more efficiently to enhance productivity.
Given the purpose of charities and the huge amounts of monies involved, it is imperative that charities have a strong board of directors to set the right tone in terms of corporate governance, just like companies. The board should have the right dynamics to engage in pertinent conversations and work in concert to achieve a common goal for the charity.
The topic of diversity has been much talked about and warrants special mention in the context of board dynamics in charities. Not only does diversity in skill sets help charities in tackling aspects such as risk management and digitalisation, the significance of diversity in gender, age and experience cannot be over-emphasised. Will an all-male board be able to adequately comprehend, discuss and address women’s rights issues? Will a board comprising only silver-haired seniors fully understand the challenges faced by youths in today’s society where social media is ubiquitous? For charities supporting minorities in the community, will it work if there are no representatives from these groups? The answer is clear – without the appropriate diversity in charity boards, there will be a severe dearth of empathy to effectively champion the causes of charities.
Another notable critical success factor for charities is systems thinking. Simply put, systems thinking is an approach for examining problems more completely and accurately before acting. The crux is to develop a holistic thought process to connect all the dots of an issue so that missing pieces can be identified along the way. As an illustration, in order to help delinquent students from dysfunctional families, the approach should not only concentrate around keeping these students in school during school hours. To more proactively help to keep them out of trouble, their well-being after school should be considered as well, not to mention weekends and school holidays. These may include establishing student care programmes after school to help these students catch up on their schoolwork (with meals provided), organising weekend camps and holiday activities to keep them occupied, etc. Charities will find systems thinking a useful strategy to adopt in achieving their desired outcomes.
Before jumping at the first charity board opportunity that comes our way, it is paramount that we take a step back and self-reflect. While we want to “do good” and contribute to society, what does that truly mean for us individually? If we know where our passion lies in charitable work, we will be more motivated to put our best foot forward. For instance, if we have a friend, relative or family member with special needs, we will have the empathy and the heart to give our utmost in this aspect. Without a sustained interest or passion, we may be easily susceptible to burnout.
The next key step is to identify the right charity to join. It is necessary to perform due diligence on the charity, for a more informed decision-making process. For example, check if the latest annual reports are available; check the charity’s website for any conflicting information with the annual reports; conduct a physical site visit and walk around the premises to experience and see for ourselves how the charity is being run, especially if it is a nursing home or one that caters to the elderly; be sceptical and ask probing questions of the charity’s management.
Moreover, since we will be dedicating our time and effort, we should ensure that we resonate with the charity’s vision and mission so that there is a shared objective. We need to be certain of what we hope to achieve in helping the charity or what differences we are trying to make. Also, the charity should allow us to leverage our skill sets and experiences in a meaningful manner. Then there is a good chance that we will be able to contribute good ideas to support the charity.
Before we take up a charity board position, we also need to be mindful that we are personally liable as individuals. Being an inactive board member or resigning from the board does not absolve us of our responsibility as directors if an incident occurred during our tenure. Therefore, the onus is on us to make sure that our positions, especially dissenting views from the rest of the board, are accurately reflected in board meeting minutes. Otherwise, silence may be construed as acceptance. Once we accept a charity board position, we must not be afraid to insist on doing the correct thing. If required, we may even have to be a whistleblower in order to discharge our duties as directors.
As professional accountants, we should not be involved in charities merely as bookkeepers. We are in a privileged position to do more for them, and we should aspire to contribute at a more significant level to address more critical issues. Our competencies equip us with the ability to think through and analyse for charities what their real issues are. This is the best way that we can give back to them.
Dr Gerard Ee, FCA (Singapore), is an ISCA Distinguished Lifetime Member and Chairman, Agency for Integrated Care.
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