It is yet another gloomy piece of news at the end of a year marred by tragic accidents and divisive scandals that charitable donations have decreased. Contributions to the annual giving campaign launched by the Community Chest of Korea on Nov. 20 reached 184.8 billion won ($168 million) on the weekend, down 7.5 percent from a year earlier. Other charity organizations have also received less in donations this year.
This disappointing phenomenon may be attributed mainly to the prolonged economic downturn and depressed social atmosphere. But it may also serve as an occasion to draw more attention to the need to make clearer how donations are used. Greater transparency among charitable groups is crucial to further spreading the culture of giving in the country.
In this year’s World Giving Index unveiled by the U.K.-registered Charities Aid Foundation, Korea ranked 60th among the 135 countries surveyed, compared to its status as the world’s 15th-largest economy. Only a third of Koreans have donated money to charities.
In a poll conducted by Statistics Korea in 2013, nearly 10 percent of respondents said they did not want to make donations because they were unsure whether donated money would be used for its proper purpose. To our regret, their distrust seems only reasonable, given the opaque ― sometimes dubious ― accounting practices that permeate most charitable organizations in the country.
Currently, more than 29,000 nonprofit groups in Korea receive contributions from individuals and corporations. But only 14 percent of them are obliged to make public their financial statements under the rules set by the National Tax Service. The regulations require organizations with annual revenues of more than 500 million won to disclose their expenditures. This amount is too high compared with its equivalents in the U.K. and the U.S., which are set at approximately 8.6 million won and 27.5 million won, respectively.
What is more concerning is that all but 19 of the nonprofit groups that publicize their financial statements fail to explain exactly how they use the sums donated to them. Even the 19 groups that are considered to be operating transparently, including the CCK, need to be more specific in their accounting reports and more efficient in their expenditures.
The top 10 nonprofit organizations, which collect nearly 80 percent of money donated by individuals and corporations, often engage in a wide range of overlapping programs and thus lack expertise.
These opaque and inefficient practices should be improved or eradicated to encourage more donations. In this regard, the government needs to strengthen efforts to guide charitable, relief and other nonprofit groups to operate in a more transparent and efficient manner so that they can better serve the public interest. In an overdue but welcome move, the NTS is planning to introduce a more specific and standardized form of financial disclosures in the early part of the New Year. Those who fail to follow the tightened rules should be subject to stricter penalties, while transparent groups need to be made more widely known to the public.
CCK officials have recently revealed some touching stories of less privileged people donating their hard-earned money. Among them was a day laborer who brought with him a bottle of coins saved by his deceased wife during her last days to help poorer neighbors. All charitable groups should commit themselves to being more transparent and efficient to honor the noble spirit of these humble people.
