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LCQ13: Fund-raising activities

     Following is a question by the Hon Wong Ting-kwong and a written reply by the Secretary for Labour and Welfare, Mr Matthew Cheung, in the Legislative Council today (November 25):


     Regarding the charitable fund-raising activities organised in Hong Kong, will the Government inform this Council:

(a) of the number of applications for organising fund-raising activities received by the authorities in each of the past two years and, among them, the number of applications rejected and their details (including the reasons for their rejection, the types of fund-raising activities, and the names of the organisations submitting the applications);

(b) whether the authorities had, in the past two years, received complaint cases in which fund-raising activities were suspected to have been used to defraud donors; if they had, of the number of such complaint cases and the details (including the types of fund-raising activities); and

(c) whether the authorities will consider further enhancing its efforts in monitoring fund-raising activities, particularly those conducted on the Internet (including those which specify that the appeal for donations is only made to the registered members of the web sites concerned or those which appeal to the public) by non-recognised charitable organisations; if they will, of the details; if not, the reasons for that?



     Legitimate fund-raising activities are an important income source to support the services and projects of charitable organisations.  While the Administration facilitates the conduct of charitable fund-raising activities, we also have to safeguard the interests of the donors and ensure that the activities do not create undue nuisance and inconvenience to the public.  For this purpose, Government bureaux and departments put in place various regulatory and administrative measures.

     Under section 88 of the Inland Revenue Ordinance (IRO) (Cap. 112), a charitable institution or trust of a public character is exempt from tax chargeable under the Ordinance.  Any institution or trust can apply to the Inland Revenue Department for recognition of its charitable status under the section.  Relevant Government departments take this tax-exempt status into account when considering applications involving fund-raising activities.

     At present, the Commissioner for Television and Entertainment Licensing is empowered by the Gambling Ordinance (Cap. 148) and the Gambling Regulations to grant lottery licences.  The Director of Social Welfare (DSW) may issue Public Subscription Permits (PSPs) under Section 4(17)(i) of the Summary Offences Ordinance (Cap. 228) for any collection of money or sale or exchange for donation of badges, tokens or similar articles for charitable purposes in public places.  For the sale of goods in public places for raising funds, temporary hawker licences (THLs) may be issued by the Director of Food and Environmental Hygiene under the Public Health and Municipal Services Ordinance (Cap. 132).

     Recognition of charitable status and control of the charitable fund raising activities straddle the programme areas of a number of bureaux and departments.  The Administration's co-ordinated reply to the three parts of the question is set out below:

(a) In the past two years, the number of applications for lottery licences, PSPs and THLs received and rejected by the Television and Entertainment Licensing Authority (TELA), the Social Welfare Department (SWD) and the Food and Environmental Hygiene Department (FEHD) respectively are as follows:

                     No. of    
                     received for       No. of
Calendar  Approval   lottery licences/  applications
Year      authority  PSPs/THLs          rejected   
--------  ---------  -----------------  ------------

2007      TELA           103                 1
          SWD            716                24
          FEHD           430               121

2008      TELA            94                 1
          SWD           1004                24
          FEHD           533               204

     (i) Applications for lottery licences
     Two applications were rejected by TELA in the past two years taking into account, among other things, the poor financial situation of the applicant organisations.  

     (ii) Applications for PSPs
     48 applications for PSPs were rejected by SWD in the past two years.  The reasons for the rejection were mainly the failure of applicant organisations to meet the eligibility criteria (such as inadequate track record of the applicants in organising charitable activities or previous non-compliance with PSP conditions).

     (iii) Applications for THLs
     325 THL applications were rejected by FEHD in the past two years.  The common reasons for rejection include prior approval already granted to other organisations for using the same location, and concerns over crowd control or traffic flow raised by other relevant departments.  

     As the information provided by the applicants was for the purpose of applying for the issue of relevant licences or permits under the respective Ordinance cited above, the Administration is not in a position to disclose the names of individual applicants whose applications were rejected in the past two years.  

(b) In the past two years, TELA and FEHD did not receive any complaint relating to suspected fraud in connection with the lotteries licences and THLs issued.  SWD received 36 and 61 complaints in 2007 and 2008 respectively in relation to alleged fund-raising activities without PSPs.  All the complaints were referred to the Police for follow-up action. Following investigation by the Police, most of the complaints were not substantiated.  In the past two years, only three persons in two cases were prosecuted with eventual conviction.

(c) Hong Kong is a caring society and the community is supportive of charitable causes.  The Administration strives to provide a friendly environment with administrative procedures kept to a minimum in order to facilitate charitable organisations to mobilise community resources for their fund-raising activities. At the same time, the Administration needs to ensure that such activities would not pose undue nuisance and inconvenience to the public, and that the interests of the donors are safeguarded.  We also combat fraudulent fund-raising activities vigorously.  

     We are stepping up our efforts to educate the public to be smart donors.  The Administration will continue to keep the regulatory regime and administrative measures under review.  In this regard, the Law and Reform Commission of Hong Kong is conducting a review on the law and regulatory framework relating to charities in Hong Kong.  The Administration will keep in view progress of the review and its recommendations.

Ends/Wednesday, November 25, 2009
Issued at HKT 15:58


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