In Hong Kong, holding public fundraising activities in public places(1) require prior application and approval from the Social Welfare Department, such as flag day or street charity sales. If the time of e-flag selling is close to the approved flag-selling day, or has been mentioned in its publicity materials, it is also necessary to report its details to the SWD. However, if the fund-raising activities are held on the Internet, the government still has no legal supervision for the time being(2). According to the relevant consultation disclosed by the Secretary for Financial Services and the Treasury, Christopher Hui Ching-yu, at the Legislative Council on 15/5 this year, consulting work is expected to be presented to the public this year(3).

Use of Online Fundraising Platform

In general, charities need resources like manpower and time to issue receipts for donors. The automated system of online fundraising platforms can automatically send receipts by email, which greatly reduces the need for manpower and material resources. Most of the current online fundraising platforms are very user-friendly, and you can complete the entire donation process with your e-wallet or credit card in just a few steps. It accepts both one-time donations and recurring donation models, and the organization can find out the fundraising situation in the management’s background. This meets the diverse fundraising goals of current NGOs and accredited charities.

The emergence of a digital flag-selling platform

In addition, digital flag (or e-flag) selling is another new fundraising scheme actively adopted by many charities recently. It helps promote and raise funds for the organization by incorporating its logo,  attractive graphic, or slogan on the e-flag. The system can then be set to allow people who bought the flag to share his/her e-flag on the social platform. The same action can be expected from his/her friends to make the donation process runs continuously.  This new mechanism will bring an innovative way to fundraising for organizations that need more than just a single goal.

(1) Fundraising activities involving fundraising or sale or exchange of badges, souvenirs or similar items for donations; activities for charitable purposes; and activities held in public places require an application for a permit from the Director of Social Services.。https://www.swd.gov.hk/tc/textonly/site_faqs/page_cfcfaq/#11.html

(2) Since the government does not have the power to regulate certain emerging fundraising methods (such as online donations and autopay donations), charities are not required to disclose to the public the proceeds and uses of donations obtained from these channels. https://www.legco.gov.hk/research-publications/chinese/essentials-2021ise06-regulation-of-malpractice-of-charitable-organizations.htm

(3) The Government is conducting a review on the regulation of crowdfunding, with a view to providing clear and clear regulatory norms for crowdfunding activities, enhancing the transparency and accountability of crowdfunding activities, preventing illegal acts and safeguarding the public interest. We plan to consult the public this year on the specifics of the future regulatory framework. https://www.info.gov.hk/gia/general/202205/25/P2022052500335.htm

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