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- Control of Charitable Fund-raising Activities


FAQ 

Control of Charitable Fund-raising Activities in Public Places

  1. Under what circumstances that a fund-raising organisation is required to apply for a Public Subscription Permit (PSP) from the Social Welfare Department (SWD)? Is SWD responsible for regulating all kinds of fund-raising activities? 

  2. How does an organisation apply for a PSP for flag day? What are the criteria for assessing its eligibility?

  3. How does an organisation apply for a PSP for general charitable fund-raising activities? What are the criteria for assessing its eligibility?

  4. What are the requirements of SWD for the audited report to be submitted by the Permittee upon completion of the approved fund-raising activities?

  5. How do members of the public identify those charitable fund-raising activities issued with PSPs by SWD?

  6. Are there any designated dates and times for flag-selling and general charitable fund-raising activities?

  7. What are the suggestions of SWD to the public if they encounter a fund-raising appeal by an organisation unfamiliar to them?



Control of Charitable Fund-raising Activities in Public Places

Q1: Under what circumstances that a fund-raising organisation is required to apply for a Public Subscription Permit (PSP) from the Social Welfare Department (SWD)? Is SWD responsible for regulating all kinds of fund-raising activities?

A1: In accordance with Section 4(17)(i) of the Summary Offences Ordinance (Cap. 228), an organisation is required to apply for a PSP from the Director of Social Welfare (DSW) if its proposed fund-raising activity is under all of the following circumstances –
  • the fund-raising activity is to be held for charitable purposes;
  • the fund-raising activity is to be held in a public place; and
  • collection of money or sale or exchange for donation of badges, tokens or similar articles is involved during the fund-raising activity.

PSPs issued by the SWD mainly cover two types of fund-raising activities in public places, namely flag days and general charitable fund-raising activities. For flag days, there are territory-wide flag days and regional flag days. For general charitable fund-raising activities, they mainly include activities like setting up donation boxes in stationed counters; moving around solicitation with money-collection boxes/bags; door to door donation (especially in public housing estates); charity sale of badges, tokens or similar articles and charity ride etc.

Q2: How does an organisation apply for a PSP for flag day? What are the criteria for assessing its eligibility?

A2: The allocation of flag days is an annual exercise conducted by SWD upon the advice of the Lotteries Fund Advisory Committee (LFAC). Invitation for application for flag days in the coming financial year will normally be advertised in newspapers and announced in SWD's website in April or May of each year with the closing date set after a month. Flag day applications will be considered and endorsed by LFAC around September of the year. Applicant organisations will be informed around October of the results of their applications. Eligible applicant organisations will be invited to witness the lot-drawing, which determines their order of priority for selection of flag days. Flag Day Permits will be issued around December.The list of flag day organisers and copy of the Flag Day Permits will be uploaded to the webpage of Control of Charitable Fund-raising Activities under Public Service of the SWD website.

The applicant organisation for a PSP for flag day must be a charitable institution or trust of a public character exempt from tax under Section 88 of the Inland Revenue Ordinance (Cap. 112), and after its registration for tax exemption, have organised charitable activities in each of the past three years by the closing date of flag day application, and it should have the ability to organise a flag sale effectively. Applications from charitable organisations which are associated with commercial organisations will be considered ineligible for this flag day allocation exercise. Closely-related organisations are not allowed to apply for flag day separately in the same exercise to ensure fair chances among all applicant organisations.

An applicant organisation should submit to SWD, before the application deadline, the completed application form, together with relevant documents such as a copy of approval letter to certify that the organisation is a charitable institution or trust exempt from tax under Section 88 of the Inland Revenue Ordinance, documents showing its track record of charitable activities held in the past three years including copies of the audited annual financial statements published, a consent letter from the Community Chest of Hong Kong (if applicable), etc.

The application form can be downloaded from this website or obtained upon request through SWD's Hotline (Tel. No. 2343 2255) from April to May of each year. Applicant organisations should refer to the Explanatory Notes of the application form for details of the application procedures, eligibility criteria, permit conditions and other points to observe.


Q3: How does an organisation apply for a PSP for general charitable fund-raising activities? What are the criteria for assessing its eligibility?

A3: The applicant organisation for a PSP for general charitable fund-raising activities must satisfy established eligible criteria, including possession of a valid registration in the Hong Kong Special Administrative Region under the Companies Ordinance (Cap. 622), the Societies Ordinance (Cap. 151), etc., or  being a charitable institution or trust of a public character exempt from tax under Section 88 of the Inland Revenue Ordinance (Cap. 112), in order to be eligible.  The applicant organisation and/or the beneficiary organisation(s) (if applicable) must have at least three years’ track record of charitable activities from its registration for tax exemption under Section 88 of the Inland Revenue Ordinance. Besides, the DSW must be satisfied that the applicant organisation and/or the beneficiary organisation(s) (if applicable) is/are suitable for organising the fund-raising activities under the application, taking into consideration the integrity, management capability, track record of the previous charitable activities, etc., of the organisation(s) concerned.

An applicant organisation should submit to SWD the completed application form, together with relevant documents such as a copy of approval letter to certify that the organisation is a charitable institution or trust exempt from tax under Section 88 of the Inland Revenue Ordinance, documents showing its and/or the beneficiary organisation’s (if applicable) track record of charitable activities held in the past three years including copies of the annual financial statements published, a copy of venue approval from the management authority of the venue and a copy of consent letter from the beneficiary organisation (if applicable) at least four weeks (but not more than 2 months) prior to the commencement date of the fund-raising activity.

The application form can be downloaded from this website or obtained upon request through SWD’s Hotline (Tel. No. 2343 2255).  Applicant organisations should refer to the Explanatory Notes of the application form for details of the application procedures, eligibility criteria, permit conditions and other points to observe.

Q4: What are the requirements of SWD for the audited report to be submitted by the Permittee upon completion of the approved fund-raising activities?

A4: The Permittee shall refer to the ‘Conditions of Public Subscription Permit’ for the requirement of preparing an income and expenditure account for the funds raised and disbursements made in relation to the approved fund-raising activities for audit by an accountant or an accounting firm or a corporate practice being a certified public accountant.  An original of the audited report shall be submitted to the DSW within 90 days of the last event day approved in the PSP, and it should be published on the Permittee’s website/annual report/newsletter for public inspection.  The report prepared by a certified public accountant in accordance with the Practice Note 850 “Reporting on Flag days and General Charitable Fund-raising Activities Covered by Public Subscription Permits issued by the Social Welfare Department” issued by the Hong Kong Institute of Certified Public Accountants is deemed acceptable for compliance of the relevant permit conditions by SWD. In addition, the net proceeds from the fund-raising activities approved in the Permit(s) must be listed separately (e.g. in the form of footnotes), by respective Permit Number(s), in the audited annual financial statements (AFS) of the Permittee for the year concerned.  A copy of the audited AFS must be submitted to the SWD for record purpose. 

Q5: How do members of the public identify those charitable fund-raising activities issued with PSPs by SWD?

A5: For both flag days and general charitable fund-raising activities, SWD has stipulated a set of conditions for compliance by the organisations issued with PSPs so as to monitor charitable fund-raising activities in public places and facilitate the public to identify such activities.  Public enquiry of charitable fund-raising activities approved by SWD can be made through the mobile app of EventHK while a one-stop finder on the government portal GovHK (http://www.gov.hk/fundraising)also provides easy and convenient public access to information on charitable fund-raising activities approved by different government departments including SWD.

As required in the permit conditions for flag days, the money collection bags for flag sale should mark clearly and prominently the name of the Permittee and the statement “Approved by Social Welfare Department”.  The permit conditions for general charitable fund-raising activities require the Permittee to display the original copy of the PSP prominently at the approved locations of the fund-raising activities (except for those approved locations without the attendance of the fund-raisers).  Presentation of the photocopy of the Permit (except the appendices) to the public by the fund-raisers engaging in moving-around solicitation is prohibited.  Besides, the Permittee must ensure that there is sufficient publicity for the proposed fund-raising activities. Service information of the Permittee and the beneficiary organisation(s) (if applicable), as well as details of the fund-raising activities, must be displayed prominently at the approved locations of the fund-raising activities, whilst the purpose of the fund-raising activities concerned must be shown in a readily legible typeface.  Moreover, the Permittee must ensure that its fund-raisers wear identification badges in the format specified by SWD and that a tag , also in the format specified by SWD, must be prominently affixed on each of the donation boxes and/or other donation collection tools, so as to inform the public that such activities has been approved by SWD. 
 

Q6: Are there any designated dates and times for flag-selling and general charitable fund-raising activities?

A6: There are around 60 flag days in a year. Flag sales usually take place from 07:00 to 12:30 on Saturdays and some Wednesdays which fall on school holidays. For flag days, there are territory-wide flag days and regional flag days. On each regional flag day, three organisations will sell flags to solicit donations concurrently, one each on Hong Kong Island, in Kowloon and in the New Territories.

Applications for PSPs for holding general charitable fund-raising activities in public places may be submitted throughout the year. Nonetheless, the applicant shall still meet the established criteria to be eligible for a PSP for organising such activities in public places, for instance, prior approval should have been secured from the management authority of the proposed venue. Generally speaking, the starting time for general charitable fund-raising activities shall be at or after 13:00 if they are to be organised on flag days.


Q7: What are the suggestions of SWD to the public if they encounter a fund-raising appeal by an organisation unfamiliar to them?

A7: While the public are always enthusiastic and supportive towards charitable fund-raising activities, SWD would like to suggest the public get to know the integrity, management and purpose of fund-raising etc. of the charitable fund-raising organisation concerned prior to their donations. In case of doubt, they may make enquiries through the following means - 

To confirm whether the fund-raising organisation is a tax-exempt charity from the Charitable Donations Section of Inland Revenue Department -
 

 Website:  http://www.ird.gov.hk/eng/tax/ach_search.htm
 E-mail Address:  taxinfo@ird.gov.hk
 Tel. No.:  2594 5300
 Fax No.:  2802 7625

To browse the charitable fund-raising activities approved by SWD, the Food and Environmental Hygiene Department and the Home Affairs Department from GovHK (http://www.gov.hk/fundraising) or call SWD's hotline at 2343 2255.  

The public should refrain from making donations and also report the matter to the Police in case of suspected fraudulent charitable fund-raising activities.  In addition, SWD encourages charitable organisations to enhance the transparency and accountability of their charitable fund-raising activities.  This assurance made to the public not only boosts the public's confidence in the use of donations by the fund-raising organisations but also enhances their reputation.