So… you want to do good. Hold on.
It’s not that simple.
I hear you.
You want to do good. And maybe you’ve done good for the past decade, operating charitable activities to help others in need.
You’re ready to take that official.
Before that though, let’s see what Mr G says about charities.
What are charities?
Charities, as defined in the Charities Act, refer to organisations established for exclusively charitable purposes, and are subject to the control of the High Court in exercise of the Court’s jurisdiction with respect to charities.
In addition, your organisation must conduct activities in furtherance of its charitable purposes which benefit the public. If your organisation fulfils the requirements, it must apply to the Commissioner of Charities to be registered as a charity within 3 months of its establishment.
All registered charities will enjoy automatic income tax exemption. For properties which are used for exclusively charitable purposes, property tax may be exempted in full or partially upon application and reviewed by the Comptroller of Property Tax.
Charity Portal
You still want to go on.
Sure.
Rather than just being a ground up initiative that depends on the goodness of friends and family, you want to do something bigger.
When should you actually start a charity?
- When you want to solicit for tax donations
- When you want to grant tax exemption receipts (at the current rates of 250%, it gives companies a bigger reason why they should donate to you)
- It makes you look legit… which in Singapore, is a big thing
The government has introduced a greater slew of accountability measures following cases such as Durai and his gold taps at National Kidney Foundation, Reverend Ming Yi, and most recently City Harvest.
Step 1: Know what you want to do
But take a step back and think about what you want to do as a charity.
Your charity’s purposes need to first fit under the following.
Step 2: Check if other charities are doing similar things
Whilst you may have noble ideas, the Commissioner of Charities also wants to balance between a vibrant charity start up scene, but also ensuring that the charity sector also grows in a sustainable manner.
After all, you don’t want to be handing out charity licences, and end up seeing charities fail because of duplicate activities that result in increased competition for limited funding.
You will need to demonstrate that your charity is reasonably unique, and committed to what it’s doing.
Step 3: Know the different legal entities you can choose to be registered under Charity Portal
There are three basic types of entities you can set up to be registered as a Charity.
| Entity | Society | Company Limited by Guarantee | Charitable Trust |
|---|---|---|---|
| Number of people needed | A minimum of 10 persons are required to form a society, with 3 key office bearers, i.e. President, Secretary and Treasurer | At least 1 director, 1 member and a qualified Company Secretary | Must have a board of trustees |
| Accounting | File Annual Returns with Registrar of Societies. | File Annual Returns with ACRA | Filed under Charity Portal |
| Constitution | Must draft a Constitution that governs the society | Must draft a Memorandum & Articles of Association setting out the objectives of organisation | Must have a trust deed – the Constitution of the charitable trust, which sets out the framework within which the trustees must operate |
| Annual General Meetings | Should hold, though not a must | Must hold Annual General Meetings | Should hold, though not a must |
| Cost | $300 on Registry of Societies | Business name registration at $15, $300 for ACRA registration | No cost |
| Average processing time | 2 months (according to MHA) | Between 14 days to 2 months (according to ACRA) | 3 months, according to Charity Portal |
| Most ideal for | Volunteer led societies | Larger organisations | Scholarship funds or trusts |
Step 4: Choose the type of entity
Now the hard thing is choosing.
HCA Hospice, one of the largest hospices in Singapore, transitioned from a registered society to a Company Limited by Guarantee on 1 April 2022.
Part of the reason was because it had grown
from a volunteer-led society to a medium-size organisation with over 140 staff. Structurally and operationally, (they) have evolved to resemble a typical company.
But the second reason seems more important. Because it allowed for better compliance and a clearer organisational structure.
Whilst a society may be initially useful, as an organisation scales, the Company Limited by Guarantee makes more sense in the long run.
Step 5: Fill up the list of activities you will run
You will then need to list out the details of the programmes you plan to run.
Step 6: Wait
Now that you’ve placed your application, all you need to do is wait. How long?
According to the Charity Portal’s service commitment, 3 months.
The steps are as follows:
- Register your society/charitable trust/CLG under the respective Registry of Societies, Charity Portal, or ACRA
- Apply through the Charity Portal
Now that you’ve gotten everything sorted, it’s time for you to go through the final checklist again.
Mind you, starting is easy, running isn’t.
As someone who worked in the charity sector for 2 years, I saw how difficult it was for my bosses to run the charity. There were days when we would think about how to get more grants, or how to get more clients, or how to get more employees.
It is difficult.
But if you’re ready, it can be a noble cause.
Ready?