A regulatory oversight needed for charitable organisations

Lai Cheng April 25, 2024 0 Comments
Pic: The Star

Consumers Association of Penang (CAP) urges the government to seriously consider the call by the then-Deputy Prime Minister Datuk Seri Wan Azizah Wan Ismail in 2020 for the establishment of a Malaysian charities commission.

As of now, there is no single comprehensive statute in Malaysia to regulate NGOs, except for charities and charitable trusts and institutions outlined in the Ninth Schedule of the Federal Constitution. The Ninth Schedule only states that Islamic charities come under the state list but it does not provide for their administration.  We call for the state administration to provide for an oversight body for Islamic charities.

Over the years, numerous requests have been made to the public for funds to build mosques, tahfiz institutions, and various other charitable causes. Ensuring transparency and authenticity in fundraising is crucial to maintaining trust within the community and guaranteeing that donations are utilized for their intended purpose. Implementing mechanisms for verification can play a vital role in achieving these objectives.

It is imperative for Malaysia to enact legislation that addresses the following:

  • The registration of charities,
  • The administration and governance of charities,
  • The regulation of charities and institutions of public character,
  • Oversight of fundraising activities associated with charities and other institutions, including the conduct of fundraising appeals, and related matters, and
  • Establishing such legislation would provide a structured framework for the operation and oversight of NGOs, ensuring accountability, transparency, and effective management of charitable endeavors and public institutions.

This statute would regulate the governance of charities by addressing key areas such as their registration, deregistration, and enforcement measures for submission of accounts, reports, and other necessary returns. Additionally, it oversees fundraising activities, ensuring they adhere to prescribed guidelines and standards.

Besides overseeing the operations of charities, this statute needs to be empowered to disqualify individuals convicted of offenses involving dishonesty or deception from holding any position within the NGO. Furthermore, it should prohibit their involvement in other organizations to maintain the integrity and trustworthiness of the social financing sector.

Potential donors can browse through the charities commission website to find a list of registered charities that they may want to donate to. They can also read the annual reports of the charities. Such would ensure their accountability and transparency.

We emphasize our plea to the government to expedite the establishment of a Malaysian Charities Commission through dedicated legislation. This action is crucial to rebuilding public trust in donating to charities or NGOs, and it will serve to mitigate the risk of these organizations deceiving the public for funds or operating ineffectively due to poor organization.

 

 

Mohideen Abdul Kader
President
Consumers Association of Penang

Letter to the Editor, 25 April 2024