New Code of Practice for crowdfunding sites to follow

As crowd fund-raising websites become a more popular way of raising funds, the Commissioner of Charities (COC) is working on a set of best practices for these platforms to follow to ensure a high level of trust and integrity in the charity sector.

The new Code of Practice will highlight recommended practices for crowdfunding sites, such as conducting due diligence to ensure the legitimacy of fund-raising appeals and ensuring transparency by providing status updates on donations received, among other things.

The COC is in talks with key players to develop the code, which is likely to be ready in a couple of months, said Minister for Culture, Community and Youth Grace Fu at the Charity Transparency and Governance Awards yesterday night.

Ms Fu, who noted that the public is calling for more regulation of these sites, said: "We hope by having an industry code of practice, we can strengthen the intermediaries so that they can be a trusted intermediary in the charity sector.

"We would like to work with the industry on the level of regulation, so as not to impede the growth of this online sector but at the same time ensure the risks are managed."

The COC is not likely to make the code mandatory, she said.

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The Charities Act will be amended to introduce suspension orders for improper fund-raising, among other changes.

Crowdfunding sites, such as Give.Asia and SimplyGiving, have become more popular in the past few years with people facing tough times appealing to public generosity.

Some have raised six-figure sums from thousands of donors. They include the parents of Xie Yujia, three, who raised more than $1 million since 2015 to help the girl born without part of her oesophagus to get specialist surgery in the United States.

We would like to work with the industry on the level of regulation, so as not to impede the growth of this online sector but at the same time ensure the risks are managed.Minister for Culture, Community and Youth Grace Fu

But it has also emerged that some have given inaccurate or incomplete information about themselves to garner more donations, or abuse the system.

In May, it was reported that Give.Asia found that a conman was raising funds for a dead baby when the parents were not seeking donations.

But even without the new code, all fund-raisers, either online or offline, are subject to basic regulatory requirements, Ms Fu stressed.

Crowdfunding sites welcome the new code as it provides a common set of best practices that industry players should adopt in an evolving landscape.

Ms Nikki Kinloch, chief executive of SimplyGiving, said: "It can only be good for the public that they can trust and believe in the sector, as we will have common guidelines to follow. It also makes things very clear and open."