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April 7, 2009
PAYING CHARITY AND RELIGIOUS CHIEFS
It can't be about top dollar for top talent
THE special report, 'Medical charities the best paymasters' (March 30), stating pay brackets of up to $300,000 for heads of medical charities and up to $550,000 for chiefs of large religious groups, reveals some missing links in the good governance of publicly donated funds to these organisations.
The idea of paying huge salaries obtained from donations to one 'guardian' of the funds is hard for ordinary donors to grasp. While public donors cannot do much to limit such large outflows, lawmakers can.
The usual checks may not apply in a sector that has 2,000 charity groups and hundreds of millions of dollars in public donations. But some mandatory safeguards should be built into the system to reflect the altruistic motives behind such expressions of public good.
One question that begs an answer is whether charity chiefs and religious leaders of large organisations require such large financial packages to live comfortably.
We must appreciate the difference between funds contributed by shareholders for businesses and funds donated by the public to benefit the underprivileged and needy.
The objective of contributed capital is to make profits via dividends for shareholders. The purpose of publicly donated funds, on the other hand, is to help beneficiaries.
Donors receive no dividends. The fiduciary duty of top officers in commercial firms requires them to answer to shareholders, while guardians of charity organisations do not do so.
Hence, we should bar donated funds from commercial activities and make no apology to restrict emoluments of office- holders. Top money for top talent does not apply to guardians of publicly donated funds.
Charity and religious organisations are not wealth-generating engines. It is against the principle of charity and spirit of religion if office-holders reward themselves excessively from donated funds meant for targeted beneficiaries.
The Government should define the dichotomy between 'conscripted funds' for businesses and 'donated funds' for charities, and put a cap on remunerations of top office-holders in charge of donated funds.
Paul Chan
April 7, 2009
PAYING CHARITY AND RELIGIOUS CHIEFS
It can't be about top dollar for top talent
THE special report, 'Medical charities the best paymasters' (March 30), stating pay brackets of up to $300,000 for heads of medical charities and up to $550,000 for chiefs of large religious groups, reveals some missing links in the good governance of publicly donated funds to these organisations.
The idea of paying huge salaries obtained from donations to one 'guardian' of the funds is hard for ordinary donors to grasp. While public donors cannot do much to limit such large outflows, lawmakers can.
The usual checks may not apply in a sector that has 2,000 charity groups and hundreds of millions of dollars in public donations. But some mandatory safeguards should be built into the system to reflect the altruistic motives behind such expressions of public good.
One question that begs an answer is whether charity chiefs and religious leaders of large organisations require such large financial packages to live comfortably.
We must appreciate the difference between funds contributed by shareholders for businesses and funds donated by the public to benefit the underprivileged and needy.
The objective of contributed capital is to make profits via dividends for shareholders. The purpose of publicly donated funds, on the other hand, is to help beneficiaries.
Donors receive no dividends. The fiduciary duty of top officers in commercial firms requires them to answer to shareholders, while guardians of charity organisations do not do so.
Hence, we should bar donated funds from commercial activities and make no apology to restrict emoluments of office- holders. Top money for top talent does not apply to guardians of publicly donated funds.
Charity and religious organisations are not wealth-generating engines. It is against the principle of charity and spirit of religion if office-holders reward themselves excessively from donated funds meant for targeted beneficiaries.
The Government should define the dichotomy between 'conscripted funds' for businesses and 'donated funds' for charities, and put a cap on remunerations of top office-holders in charge of donated funds.
Paul Chan