ingapore, 16 December 2016 – A study, “Overview of the Charity Sector in Singapore” by the Asia Centre for Social Entrepreneurship and Philanthropy (ACSEP) at NUS Business School, has revealed that the fastest growing charity subsectors are Community, Arts and Heritage, and Health. According to data collated from the Commissioner of Charities Annual Reports from 2008 to 2013, the receipts from each of these subsectors grew 28.5 per cent, 17.3 per cent and 10.4 per cent respectively on an annual basis. (Annexe: Figure 1). Receipts are defined as the combination of “Donations”, “Grants” and “others”.
“Grants”, or the money given by the government, contributed to the most of the total receipts in the charity sector at about 46 per cent in 2013, followed by “Others” at 34 per cent. Charities in the Education subsector benefited the most from the grants, followed by Arts and Heritage subsector and Health subsector. The Education subsector received on average annual grant of 41.5 million per charity from 2011 to 2013 whereas the other two subsectors received 4.1 million and 2.5 million per year respectively. The large amount of the grants to Education subsector may be due to the establishment of the new tertiary education institutions such as SUTD in 2012 as well as the Tuition Fee Grant Schemes that subsidise tertiary students.
Steady growth in the overall charity sector
The study also reveals the partial impact of various government initiatives laid out in 1992. This includes the formation of the National Council of Social Service and the introduction of tax exemption for donations.
In the timeframe of the study, the number of charities in Singapore has grown at the annual rate of 2.1% from 2007 to 2013. They are divided into seven subsectors that include:
Of the seven subsectors, Religious and Others make up the largest number of charities across all seven years. On average, this category consists of more than 60 per cent of the total number of charities. It also includes charities set up for animal welfare, environmental conservation and youth development.
During this time period, the total receipts from the charity sector as a percentage of the gross domestic product (GDP) has increased to 3.7 per cent in 2013 from 2.2 per cent in 2007. The total amount of receipts in 2013 stands at S$13.9 billion. (Annexe: Figure 2)
Further breakdown shows that “Donations” to the charity sector as a percentage of the GDP has stayed almost the same, standing at 0.64 and 0.66 per cent in 2009 and 2013 respectively. There is a similar finding for “Grants”. This is barely changed at 1.64 and 1.69 per cent respectively. The main growth in receipts over the five years comes from the category “Others”, which increased from 1.07 per cent of GDP in 2009 to 1.32 per cent in 2013. This suggests that structurally the charity sector is growing reliance on other types of funding like sales of goods and services.
More Institutions of Public Charter (IPCs) to serve the needs of the community
Charities conferred the IPC status have also grown from 508 in 2007 to 599 in 2013, an annual growth rate of 2.8 per cent. To qualify, they must be dedicated to serving the needs of the community in Singapore as a whole and is not confined to sectional interest or groups of persons based on race, belief or religion. IPCs are allowed to issue tax-exemption receipts but are held to higher standards of disclosure.
Social and Welfare and Religions and Others subsectors are the two subsectors that make up the most number of IPCs with 219, and 90 respectively; while the top three fastest growing subsectors for being conferred IPC status are Education, Arts and Heritage and Community subsectors. (Annexe: Figure 3)
Social and Welfare subsector should consider a social entrepreneurship model to serve ageing population
The number of Singaporeans aged 65 and above will triple to 900,000 by 2030, which may lead to greater demand for sustainable elderly-care related services through the Social and Welfare subsector.
Data shows that charities in this subsector are most financially independent and generate the bulk of their revenue from goods and services provided and investment income. Thus, entrants into this subsector should explore employing social entrepreneurship to ensure sustainability.
“The charity sector has been growing steadily in numbers and total receipts from 2007 to 2013. A more microscopic review shows that the percentages of donations and grants in proportion to GDP were relatively stable from 2009 to 2013. More interestingly, charities appear to be growing alternative sources of funding to build sustainability,” said Dr Zhang Weina, Research Director, ACSEP at NUS Business School.
