HONG KONG: A non-legally binding checklist of best practices to serve as guidelines to prevent corruption by charity fundraisers was set out yesterday.

Timothy Tong Hin-ming, the commissioner of the Independent Commission Against Corruption, said there are risks of corruption in fund-raising activities, but it may not be reflected in the number of complaints it has received.

"Over the past three years, we got only seven corruption reports. But it doesn't mean that other people are not likely to be exploring possible loopholes if we allow loopholes to continue to exist," he said.

But he declined to say how many successful prosecutions have been made, since, as he put it, some cases are still under investigation.

Tong said the graft buster had decided to issue the checklist for charities in a bid to provide a guide on good governance.

Philip Chen Nan-lok, the chairman of the Corruption Prevention Advisory Committee, said, "It is unacceptable to abuse donors' generosity in the name of charities if what they do is illegal."

Bernard Chan, the chairman of the Law Reform Commission's Charities Sub-committee, said it will probably complete its review on legislation to regulate charities by the end of next year and seek public views on its recommendations afterwards.

The nine-member panel was set up in November 2007.

Currently, there is also no statutory definition of what constitutes a charity or a charitable purpose.

Exemption from income or profits tax can be claimed from the Inland Revenue Department by an approved charitable group, but that department is not responsible for registering charities, or for monitoring their conduct.

Chan, also the chairman of the Hong Kong Council of Social Service, said he believes that most charities will be willing to comply with the guidelines.

"It will do no good to the charity if the public casts doubt on it," he said.

Government figures showed that as of July 31 this year, there were 6,017 tax-exempt charities, nearly double the figure as at March 31 in 2000.

Donations made to tax-exempt charities may be tax deductible.

The amount of donations exempted from salaries tax surged from HK$2.89 billion in 2003-04 to HK$4.52 billion in 2007-08, according to the Inland Revenue Department.

Capital gains exemptions also jumped to HK$2.51 billion in 2007-08 from HK$1.28 billion in 2003-04, government figures showed.

Christine Fang Meng-sang, the chief executive of the Council of Social Service, said she welcomes the launch of the guidelines.

She said about one-sixth of the present tax-exempt charities are welfare groups and the council will encourage them to use the checklist.

Law Chi-kwong, an associate professor of the University of Hong Kong's department of social work and social administration, said the guidelines may help allay public doubts over the finance of charities, if groups agree to follow.

Ho Hei-wah, the director of the Society for Community Organisation, said he fears that the more rigid regulations will generate a heavier administrative load, which may be a heavier burden for small and medium-sized welfare groups.

(HK Edition 10/07/2009 page1)