Let me share my personal perspective of what I see as a matter of growing concern for the charity sector. Ethical (or non-ethical) behaviour of donors.
Generally, ethics as a matter of intellectual discourse is a challenging area as it involves recommending and defending concepts of right and wrong. It is not wrong for any person to donate his money to any charity as he wishes in whatever he wants, but will it be ethicallywrong for him not to question the person or charity asking for donations before giving his money, and not to follow up or check that his donations have been properly used? Not morally wrong, perhaps, as the donor can choose to simply place trust on the recipient of his donations, and rely on the accountability process (as provided by law) for the recipient to demonstrate to the relevant authority and stakeholders that the trust placed on him has been properly discharged. He can also rely on the work of auditors to provide him with reasonable assurance that his donations are properly accounted for.
There is however an important distinction between moral and ethical behaviour. I am not going to debate on this. Suffice to say that morals are often associated with one’s particular values (in accordance with his own guiding philosophy based on his religious beliefs or otherwise) concerning what is right and what is wrong. For example, “Afterall it is my money which I have donated, how the charity uses (abuses) it, is no concern of mine” (quote from Chairman, Charity Council) is a reflection of a certain value that the donor upholds. That value may be about how he defines his relationship with a charity that is also, for example, his religious authority. For him to inquire or question the religious authority is to show distrust, so to speak. Therein lies the growing concern or problem on ethics.
Ethics may broadly refer to moral principles such as honesty and fairness, but they are often applied to questions of correctbehaviour within a given context and tends to look into aspects of whether or not an action is responsible. If the donor is not concerned with how the charity uses his donations, what consequences may result from his “I don’t care” (unethical) attitude? Can the donor also be held responsible for partly contributing to the cause of undesirable incidents such as breach of trust or misuse of funds?
Ethical behaviour is basically about acting in ways consistent with what are considered by the society as good values for the well-being of the charities and their eco-system as whole. One case of unethical behaviour may be just too many as it may influence the behaviour of others to also act unethically. Like corruption where the Tone from the Top is not properly set to prevent or deter corrupt practices, it may spread like a social disease.
We often tend to focus on ethical behaviour of directors or governors and managers of charities such as whether they would avoid conflict of interest in their decision-making process, whether they would use the donations to effectively achieve the purpose of the donations received and whether they would use the money prudently (without waste and extravagance). The time has come for us to also focus on the ethical role or behaviour of donors. They should not just leave the charities alone without at least questioning how their moneys will be or have been spent. They should help to ensure that the charities are doing the right thing and they are doing it right. They should not hesitate to act as whistle blowers when they see things go wrong. Granted, they may have given their mandate to the charity’s board of directors to monitor such things on their behalf, but they should check on the proper discharge of the directors’ duties and responsibilities?
The accounting scandals or fraudulent practices in many charities have all something in common. The directors or managers who have control over the use of funds are often driven by greed and unethicalconsiderations when taking advantage of opportunities (for financial frauds or abuses) arising from inadequate system of internal controls. Donors can help to reduce the risks of such incidents to a certain extent by acting pro-actively as concerned stakeholders. For example, they should assess the risks carefully before giving donations to charities that do not comply with the Code of Governance for Charities and IPCs. They should also monitor how their donations have been used and diligently review the financial reports issued by the directors.
Singaporeans are known for their spirit of giving but they should always be aware of the risk that their money may not end up with the right recipients or the money may be used for unauthorised purposes. On 7 September 2018, the Commissioner of Charities launched a Safer Giving campaign to educate donors to “Ask, Check, Give” with a guideline on the three simple steps to making Singapore a safer place to donate. This is a step in the right direction to instil awareness of ethics in their role as donors, but it is just the beginning. After giving their donations, what else should they do as part of their ethical duty or obligation?
Abdul Hamid Bin Abdullah,
Board of Directors,
About The Author: Abdul Hamid Bin Abdullah
Abdul Hamid Bin Abdullah is Chairman, Board of Directors of AMP Singapore, a charity with IPC status that has won the Charity Transparency Award for three consecutive years (2016, 2017 and 2018).
He has retired from an audit director’s role in the Auditor-General’s Office Singapore after 38 years of auditing experience in the public sector.
He is a Certified Information Systems Auditor (CISA), a Chartered Accountant of Singapore (CA Singapore) and a Fellow of the Institute of Internal Auditors (FIIA) Singapore.