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FAQ

Control of Charitable Fund-raising Activities in Public Places

Under what conditions is the application for a Public Subscription Permit (PSP) from the Social Welfare Department (SWD) required? What are the procedures in applying for a PSP?

How could an organisation apply for a Flag Day? What are the criteria for assessing its eligibility?

Whether the Circular on Reporting on General Charitable Fund-raising Activities Covered by Public Subscription Permits issued by the Social Welfare Department published by the Hong Kong Institute of Certified Public Accountants (HKICPA) on 30 November 2007 is applicable to all general charitable fund-raising activities issued with a Public Subscription Permit by SWD?

What are SWD's suggestions to the public in handling charitable fund-raising appeal through telephone or mail directed by an organisation unknown to them?

Control of Charitable Fund-raising Activities in Public Places

Q1:

Under what conditions is the application for a Public Subscription Permit (PSP) from the Social Welfare Department (SWD) required? What are the procedures in applying for a PSP?

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 if its proposed fund-raising activity meets all the following conditions -

	The activity is to be held for charitable purposes
	The activity is to be held in a public place
	The applicant participates in any collection of money or sale or exchange for donation of badges, tokens or similar articles

To apply for a PSP, an organisation has to submit a duly completed application form, which can be downloaded from this web site or obtained from the Charitable Fund-raising Control Team of SWD (Tel. No. 2832 4311, Fax No. 2838 0441). The applicant must be an organisation registered in Hong Kong. If the organiser is not a bona-fide non-profit-making organisation exempt from tax under Section 88 of the Inland Revenue Ordinance, the proposed event should be organised for the benefit of such a charitable organisation with its written consent. The applicant should submit 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, a copy of venue approval from the management authority of the venue and a copy of consent letter from the beneficiary organisation at least three weeks prior to the commencement date of the fund-raising activity.

Q2:

How can an organisation apply for a Flag Day? What are the criteria for assessing its eligibility?

A2:

The allocation of flag days is an annual exercise conducted by the Social Welfare Department (SWD) upon the advice of the Lotteries Fund Advisory Committee (LFAC). Invitation for application for flag days in the coming financial year is normally advertised in newspapers around May and closed after a month. Flag day applications are considered and endorsed by LFAC around September. 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 day. Successful organisations will be invited to select their flag days around November according to their priority as determined by the lot-drawing. Flag Day Permits will be issued to successful organisations around December.

The existing eligibility criteria adopted for assessing flag day applications are as follows:-

	The applicant organisation must be a bona-fide non-profit-making organisation exempt from tax under Section 88 of the Inland Revenue Ordinance, Cap. 112.
	The applicant organisation must have at least three years' track record of charitable activities after it is registered for tax exemption under Section 88 of the Inland Revenue Ordinance, Cap. 112 by the closing date of flag day application. The applicant organisation should produce audited annual financial statements to support its three years' track record. Applicant organisations already ruled eligible in the previous allocation exercises will however not be affected by this provision.
	Applications from charitable organisations which are associated with commercial organisations would 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. Closely-related organisations will normally include but not limit to holding-subsidiary organisations, organisations of the same group or organisations which exhibit close relationship in such aspects as levels of duplication of Board members, shared administrative staff, shared accommodation or non-arm's length transfer of resources/monies, etc. However, applications from Non-governmental organisations (NGOs) with independent SWD subvention status would normally be considered eligible under this provision. Applicant organisations should make a self-declaration that they have no closely-related organisations applying in the same exercise. Non-compliance may render NGOs' applications being rejected and their eligibility for future application may also be affected.
	The SWD is satisfied with the integrity, management capability and track record of the applicant organisation.
	The applicant organisation is willing to allow staff of the SWD to inspect both the premises and the activities of the organisation and its centres.
	The nature, value and standard of existing services provided by the applicant organisation or by its member agencies and the purpose of the proposed flag day should be in support of a cost-effective charitable activity measured in terms of the number of customers to be benefited and the degree of improvement to the well being of the community.
	The applicant organisation should establish its need for charitable fund-raising through a flag sale. The financial need is assessed on the basis of the applicant organisation's estimated income and expenditure of the project(s) to be funded by the flag sale for the forthcoming year and its proposed target of flag sale income.
	The applicant organisation should have the ability to organise a flag sale effectively.
	Applications from organisations which have breached the conditions of a public subscription permit (for flag day or otherwise) in the past may not be considered in the flag day allocation exercise.
	Applications from organisations which have poorly organised their flag day in the past may be considered ineligible for the flag day allocation exercise.
	Where necessary, the SWD may impose additional criteria and conditions, on the advice of the LFAC.

Q3: Whether the Circular on Reporting on General Charitable Fund-raising Activities Covered by Public Subscription Permits issued by the Social Welfare Department published by the Hong Kong Institute of Certified Public Accountants (HKICPA) on 30 November 2007 is applicable to all general charitable fund-raising activities issued with a Public Subscription Permit by SWD?

A3:
The 'Circular on Reporting on General Charitable Fund-raising Activities Covered by Public Subscription Permits issued by SWD' issued by HKICPA on 30 November 2007 is applicable to fund-raising activities that are conducted/completed on or after issuance of the Circular.

Q4:	What are SWD's suggestions to the public in handling charitable fund-raising appeal through telephone or mail directed by an organisation unknown to them?
A4:	While the public's enthusiasm and support towards charitable fund-raising activities is greatly appreciated, SWD would like to suggest the public to get to know the integrity, management and purpose of fund-raising of the charitable fund-raising organisation concerned by making enquiries prior to their donations. In case of doubt, they could call the following Government Departments for enquiries -
		To confirm whether the fund-raising organisation is a charitable organisation from the Charitable Donations and Retirement Schemes Section of Inland Revenue Department.
			Web Site :	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 confirm whether the charitable fund-raising activity is approved by SWD and regulated by the issue of a PSP from the Charitable Fund-raising Control Team of SWD.
			Web Site:	http://www.swd.gov.hk
			E-mail Address:	eoiifc@swd.gov.hk
			Tel. No.:	2832 4311
			Fax No:	2838 0441

	SWD also encourages charitable fund-raising organisations to enhance the transparency and public accountability for their charitable fund-raising activities. The assurance made to the public would bring a positive image to the charitable fund-raising organisations and probably an increase in donations.
	The public should stop from making donations and also report the matter to the Police in case of suspected fraudulent charitable fund-raising activities.

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©2005 Social Welfare Department, HKSAR
Last Revision Date: 4 February 2008

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