Charity or not Charity ? Profit or Non-Profit ?

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It is time for GIIS+GIF to have whistleblower protection
F.A.Q

1. Is GIF (Foundation) a charity ? Ans. Yes. GIF is registered as a charity.
2. Is GIIS (School) a charity ? Ans. No. GIIS, as registered under company registration laws, is not a charity.
3. Is GIF (Foundation) a non-profit ? Ans: Yes. GIF has sufficiently high expenditure (!) and does not pay out dividends, so as to maintain non-profit status.
4. Is GIIS (School) a non-profit ? Ans: No. GIIS makes profit and is legally permitted to do so.

But: These facts above do not give GIF (exact words are: any charity that is "doing good"), "the license to operate in anyway convenient", if we go by Mr Gerard Ee, current Chairman of NKF (Straits Times 19/07/2008).

Many Singapore charities are under the scanner. Last week, the former Chairman of Ren Ci was "charged with forgery, conspiracy and misuse of funds". Report of 16 July Channel NewsAsia:

Former Chairman of Ren Ci has been charged with forgery, conspiracy and misuse of funds.

The ex-Chairman faces charges for alleged criminal breach of trust, one count of forgery for the purpose of cheating, and one count of abetment for allegedly falsifying accounts.

He also faces six charges under the Charities Act for allegedly providing false information over a decade.

Two of his associates, Raymond Yeung and Phua Seow Hua, were also alleged to have gone into conspiracy with the venerable and were also charged in court on Tuesday.

This is the second case in Singapore where a large charity and its leaders have been charged with mismanaging funds. The first was the National Kidney Foundation and its ex—CEO, TT Durai.
(SPH report by cheekin@sph.com.sg)

The Straits Times report on charities [by Radha Basu, radhab@sph.com.sg] "Back on their feet again" should ease all worry of us parents who are shocked by documents on GIIS and GIF regarding fees and funds collected. [Refer to our earlier articles on 2005 accounts, 2006 accounts, fee rise analysis -Ed].

Singapore being not a 'noisy' place (as compared to India), means that most of us expat Indian parents will just stay silent. [as long as they wanted to continue in the school without undue pressure. -Ed] Anyway, if this was in India, parents could have screamed aloud but managements would still go scot free, with all their money and connections to pull ! In Singapore you don't scream, you have to show patience, but ultimately there is faith in the system that those who do wrongs will not go free. It is a matter of time.

NKF saga dragged on for 3 years. Ultimately law and order prevailed. Parents should be happy, how swiftly cleanup was initiated with minimum disturbance to NKF patients. Which means, in the event of a probe on GIIS+GIF, students, teachers and parents have nothing to fear or worry about. We can expect the authorities to haul up those who did wrongs, or abetted wrongs or neglected their duty to prevent wrongs, but day to day operation will continue smoothly.

From the ST report:
"July 2005. NKF CEO T.T. Durai's lawsuit against Singapore Press Holdings leads to revelations that he has a $600,000 annual salary and travels first-class.

The NKF is also found to have inflated patient figures. Further scrutiny reveals that only 10 cents in every donation dollar go to patients.

In a culmination of court proceedings that drag on for three years, Durai goes to jail to serve a three-month corruption sentence in June 2008, nearly three years after the scandal erupted."
NKF's new Chairman Mr Gerard Ee said:
'Often charities forget that they are enterprises with a social mission. Just because they are doing good is not licence to operate in any way convenient.'

Whistleblower Protection

Other ST reports [Not on website. 'Road to Recovery', 19/07/2008 Radha Basu radhab@sph.com.sg & Janice Heng janiceh@sph.com.sg] mentioned Whistleblower Protection: A policy which protects employees who report wrongdoing. Prof Mak Yuen Teen (expert in governance and ethics at NUS, who also helped to clean up NKF and SATA) said that whistleblower protection "is especially important for charities", and "routine internal audits don't always pick the problems". SATA's previous CEO was found guilty and asked to go after a scandal in 2005 (a private company registered by the CEO came to light), but now, the "new" SATA protects whistleblowers.

NKF ans SATA are stronger as a result.

As well meaning parents, we suggest GIIS and GIF authorities, principals, board, management, auditors, finance professionals, and all advisors (whether inactive or active) to take note of the above and do the right thing. It is never too late.

[If you are interested in knowing about legally protected whistleblowing, governance and ethics, please read this article by Prof Mak Yuen Teen. Highly recommended. -Ed]

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READER COMMENTS removed on 14/4/2009:
1. eyeopener 'Magnum' comment 10 Dec 2008 11:52 PM Ref #28
2. Anonymous comment February 8, 2009 12:01 PM