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Crowdfunding by recipients of social assistance

11 September 2016

Question

Assoc Prof Daniel Goh Pei Siong
Non-Constituency Member of Parliament

To ask the Minister for Social and Family Development (a) how many cases have there been in the past three years where social assistance or medical subsidies were stopped or applications rejected because the recipients raised money through online crowdfunding; (b) whether the Ministry inquired into the reasons for the recipients turning to online crowdfunding and, if so, what were the reasons; and (c) whether online crowdfunding is threatening to disrupt the charity sector.

Answer

1.   We are aware of two cases where clients raised money through online crowdfunding, and their applications for social or healthcare assistance were turned down because the applicants' households were assessed to have sufficient resources after taking into account the donations raised. In both cases, the applicants had received government assistance before.

2.All individuals and households applying for assistance are treated equally. Applications are assessed holistically, taking into account the financial, social and health circumstances of the household. Government assistance is available for all persons and families who are vulnerable and need help. We are not aware of the reasons why the two individuals chose to raise funds through online crowdfunding.

3.   Crowdfunding enables those who need help to actively reach out to, and seek assistance from a wider public. While we are heartened to see many Singaporeans stepping forward to help others in need, we also have some concerns with certain online crowdfunding practices.

4.   For instance, there have been cases where individuals present inaccurate information online to raise funds, including denying that they have received Government assistance. Should there be more crowdfunding cases discovered to have exploited the generosity of donors, the public may become sceptical towards worthy fund-raising initiatives. This may dampen the charitable spirit, and would run counter to our goal to nurture a gracious and compassionate society.

5.   As crowdfunding platforms enable fund-raisers to reach a much wider audience within a shorter time-span, it is not surprising that online fund-raising has been gaining traction. The benefits of technology will definitely be accompanied with certain pitfalls. With crowdfunding platforms becoming more popular, the charity sector will also need to evolve and adapt accordingly.

6.   It is paramount that the principles of transparency and accountability are adhered to in crowdfunding. The Office of the Commissioner of Charities has highlighted that fund-raisers are obliged to provide clear and accurate information to the public about the beneficiaries and the purpose of these fund-raising appeals. They should keep proper records of donations received and disbursed, and ensure that donations are used in accordance with the intent communicated to the public. In the case of online crowdfunding platforms, information should be disclosed to the public about their status as commercial entities, the proportion of donations which will be given to the intended beneficiaries, and how their fees are computed such as details of transaction charges, if any.

7.   It is encouraging to know that some online crowdfunding platforms have shown efforts to ensure that the causes for which they are fund-raising are legitimate, and taken more effort to conduct due diligence checks to help donors discern the credibility of beneficiaries as part of their duty to donors. However, not all crowdfunding platforms conduct such checks. I strongly urge all crowdfunding platforms to put in place measures to validate the legitimacy of beneficiaries and ensure that donations are used responsibly. This will certainly enhance public confidence in donors to such online fund-raising appeals.

8.   At the same time, donors also have an important role to play. Donors should remain vigilant and discerning in responding to online fund-raising appeals, so as to avoid falling victim to improper fund-raising activities. How will the donations be used? How are records of donations received and funds disbursed maintained? How are unused funds being accounted for? Will the fund-raiser be receiving any commission from my donation? These are some important questions that donors should ask. When in doubt, donors should find out more from the fund-raisers before making a donation. At no time should anyone feel pressured to give. If donors have concerns regarding any improper fund-raising activities, they should report the matter to the Office of the Commissioner of Charities. If fraud or scams are suspected, donors should file a Police report immediately.

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Published On Mon, Sep 11, 2017
Last Reviewed On Mon, Sep 11, 2017

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