Replies to LegCo questions

LCQ19: Regulation of fund-raising activities

Following is a question by the Hon Paul Tse Wai-chun and a written reply by the Secretary for Food and Health, Dr York Chow, in the Legislative Council today (February 29):

Question:

It has been reported that an organisation in the name of "Hong Kong Society of Healthy Family" had been issued with 120 temporary hawker licences by the Food and Environmental Hygiene Department (FEHD) within a year, and on various occasions sold goods in public places for fund-raising purpose nearby the MTR Ngau Tau Kok Station, but the funds raised were not put into donation boxes. It has also been reported that neither the Companies Registry nor the Business Registration Office has any information on this organisation, no web page or means of contact of this organisation can be found on the Internet, and the person-in-charge of this organisation has also refused to disclose its financial report and address. In this connection, will the Government inform this Council:

(a) whether it has investigated how the aforesaid organisation handles the funds raised;

(b) of the policies and measures (including verification of financial reports) in place to prevent charitable organisations selling goods in public places for fund-raising purpose from embezzling the funds raised and ensure that such funds are used for charitable purpose; whether there is any co-operation and co-ordination among government departments to prevent any organisation from obtaining money fraudulently by false charity sales; and

(c) of the number of temporary hawker licences issued to charitable organisations by FEHD in each of the past three years; and the criteria for vetting and approving the applications?

Reply:

President,

As far as fund-raising activities are concerned, currently there is no statutory definition of what constitutes a charity or a charitable purpose, nor is there a single piece of legislation for governing charities in Hong Kong and the use of donations. A charity can be established in different forms, including a trust body, a society established under the Societies Ordinance (Cap. 151), a corporate registered under the Companies Ordinance (Cap. 32), an organisation established under a Hong Kong statute, etc. 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 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 do not cause nuisance or inconvenience to the public, and that the interests of the donors are safeguarded.

The Administration's consolidated reply to the three parts of the question is set out below.

For any collection of money or sale of badges, tokens or similar articles for charitable purposes in public places, an organisation has to apply in advance for a permit from the Social Welfare Department (SWD) under the Summary Offences Ordinance (Cap. 228). Organisations issued with the permit are required to submit an audited report of their activities to SWD within 90 days upon completion of the activities. The audited report should state, among others, the purpose as well as the income and expenditure of the fund-raising activities. The organisations are also required to publicise the audited report and retain the relevant documents for public inspection. If any organisation is found to have seriously breached the permit conditions or been involved in illegal acts in the past, SWD will not approve the permit application of that organisation and will inform relevant departments, with a view to preventing and combating fraudulent fund-raising activities.

If it involves the sale of goods in public places for raising funds, a charity or non-profit-making organisation also has to submit an application to the Food and Environmental Hygiene Department (FEHD). FEHD will consider issuing a temporary hawker licence (THL) with validity not exceeding one month under the Hawker Regulation (Cap. 132AI) to allow the licensee to conduct selling activities in public places. Upon receipt of an application for THL for sale of goods for fund-raising purpose, FEHD will consider the nature of the organisation and consult relevant departments. The THL will be issued only if the relevant departments do not raise any objection. Generally speaking, FEHD only issues THLs to charitable or non-profit-making organisations only, namely:

(i) charitable institutions which are exempted from tax under section 88 of the Inland Revenue Ordinance (Cap. 112); or

(ii) registered/enrolled non-profit-making organisations under the Laws of Hong Kong, e.g. companies registered under the Companies Ordinance (Cap. 32), societies registered under the Societies Ordinance (Cap. 151) and trade unions registered under the Trade Unions Ordinance (Cap. 332), of which FEHD will verify the Memorandum and Articles of Association to ascertain that the organisation is non-profit-making in nature.

As far as THLs are concerned, FEHD is mainly responsible for monitoring hawking activities and environmental hygiene issues to ensure that the licencees comply with the Hawker Regulation (Cap. 132AI) and licensing conditions while conducting the relevant activities. Since the applicants are charitable or non-profit-making organisations, FEHD currently does not prescribe any requirement on the use of the funds raised or the submission of reports to FEHD.

Nevertheless, upon receipt of complaints or if the selling activities are suspected to be incompatible with the charitable/non-profit-making nature, FEHD will liaise with the departments concerned and take follow up actions. The organisation mentioned in this question is registered under the Societies Ordinance (Cap. 151) and is also a charitable institution exempted from tax under section 88 of the Inland Revenue Ordinance (Cap. 112). FEHD is now following up on the fund-raising activities of the Hong Kong Society of Healthy Family in relation to the THLs granted, and has referred the case to the Hong Kong Police Force and the Inland Revenue Department for follow-up actions.

The numbers of THLs issued by FEHD to charitable/non-profit-making organisations in 2009, 2010 and 2011 are 909, 724 and 1 184 respectively.

After reviewing the applications for THLs in recent years, FEHD will strengthen co-operation with the relevant departments and study whether in future applicant organisations should be required to submit financial reports of the funds raised, etc. to the Government within a specified period of time after completion of the fund-raising activities, and to allow public inspection of such reports, with a view to increasing the transparency of their fund-raising activities.


Ends/Wednesday, February 29, 2012
Issued at HKT 12:34

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