DECEMBER 1 — Kudos to Izwan Zakaria for highlighting the urgent need for a Commissioner of Charity.
After 66 years of independence, there is no single statute governing charities in the country. Above all, there is no statutory interpretation of charity in the country. (See Zuraidah Haji Ali, “Regulating Charitable Organizations In Malaysia; A Case Law Analysis Of the Balkis Case”, ICLAPS 2014)
As it is now, the law governing charity follows the English law. English law on charity can be traced as early as the introduction of the Preamble to the Statute of Elizabeth 1603. The types of charitable purposes were listed in the Preamble and it has been used as the basis of charitable purposes until now.
In “Analysing the Need to Regulate Non-Profit Foundations Under the Trustees (Incorporation) Act 1952: Towards Transparency and Good Governance”, legal scholars Zuraidah Haji Ali, Sharifah Zubaidah Syed Abdul Kader and Nor Asiah Mohamad wrote:
“Despite being colonised by the British for more than 100 years, the law on charity in Malaysia has never been placed under a single statute. The structure of charitable organisations in Malaysia comes in different forms and is governed by different laws. One such form is a foundation. Charitable or non-profit organisations in the form of a foundation are governed by the Trustees (Incorporation) Act 1952. The Act provides for the incorporation of trustees of certain bodies and association of persons and this covers a few purposes and activities namely, religion, education, art, scientific research, social or charitable.”
The Trustees (Incorporation) Act 1952 (Act 258), however, does not clearly define the concept of charities, let alone set out the few elements relating to charities. This despite the four amendments to the Act, the last being in 2004 vide the Trustees (Incorporation) (Amendment) Act 2004 (Act A1219) which came into force in February 2005.
In England, the law dated as far back as 1601 when the Preamble to the English Statute of Charitable Uses Act laid down the basic foundation or useful guidance as to what could be considered as charitable.
Significant steps taken by the English Parliament in order to monitor any negligent and mismanagement of charitable funds led to the establishment of the Charity Commission under the Charitable Trust Acts 1853, 1855 and 1860.
The Charity Commission was established to promote the effective use of charitable resources by encouraging better methods of administration, by giving charity trustees advice and by investigating and checking abuse.
The Commission continues to regulate and register charities in England and Wales with the objective, among others, of ‘endowing’ charities the public confidence they need for the public to continue "giving".
The law in England points to the importance of having a proper monitoring body or bodies to regulate matters relating to charities.
The law then became enacted in the Charities Act 1960, 1993, 2005, 2011 and the latest 2022. The Charities Act 2022 is the fulfilment of commitments made by the UK Government in response to the Law Commission’s Technical Issues in Charity Law Report, which can be read here. Just look at the development and reforms of the law in England over time, while comparing the law in Malaysia.
In its report, the Law Commission acknowledged charities as occupying a special place in society. Accordingly, the law should both protect and properly regulate them while safeguarding the public interest in ensuring that charities are properly run.
The report duly analysed various technical issues in charity law and made a number of recommendations for reform. The recommendations were designed “to improve the protection and the regulation of charities, whilst enabling charities, with appropriate oversight, to work more effectively to achieve their valuable purposes.”
In Singapore, there was first the Charities Act 1982 (Act 20 of 1982) which was superseded by the Charities Act 1994 (Act 22 of 1994). Section 3(1)(a) allows the Minister to appoint a Commissioner of Charities (COC).
The objectives of the COC mirror that in England, which are:
• To maintain public trust and confidence in charities
• To promote compliance by governing board members and key officers with their legal obligations in exercising control and management of the administration of their charities
• To promote the effective use of charitable resources
• To enhance the accountability of charities to donors, beneficiaries and the general public [Section 4(1)]
In their concluding remarks on transparency and good governance of charities in Malaysia, the legal scholars mentioned above wrote:
“The move to have a single regulator in monitoring charitable organisations is very vital and at the moment this has not been widely campaigned by the ruling authority in Malaysia .... Malaysia has never had a statute on charity and the move to have one needs to be considered as a huge and serious step towards reforming the law on charity.
“It is important to remember that the establishment of a Charity Commission is paramount as it acts as an ‘independent regulator for charitable activities’ whose purpose is to promote public’ trust and confidence in charities.”
What say you, minister?
*This is the personal opinion of the writer or publication and does not necessarily represent the views of Malay Mail.
