CHC under probe regarding funds. This shows how important it is that as a church we need to not just follow the law but we as a church should set higher standards in financial accountability.
As church gets bigger, we have to show the world that Church leaders are setting a higher standard. Hopefully the CHC leaders will be proven innocent, if not it will bring a bad image to the Christian.
Using money to personal profit or treating Church money as a personal account is a recipe for disaster. First was Renci Organisation, then NKF, now CHC.
Article 2 makes a really good read. It explains the issue of check and balance, that most religious organization is not equipped to deal with.
Here below are articles that make interesting read.
Article 1 :
When business and religion mix ...
As church gets bigger, we have to show the world that Church leaders are setting a higher standard. Hopefully the CHC leaders will be proven innocent, if not it will bring a bad image to the Christian.
Using money to personal profit or treating Church money as a personal account is a recipe for disaster. First was Renci Organisation, then NKF, now CHC.
Article 2 makes a really good read. It explains the issue of check and balance, that most religious organization is not equipped to deal with.
Here below are articles that make interesting read.
Article 1 :
When business and religion mix ...
05:55 AM Jun 03, 2010
City Harvest Church has its City Harvest Community Services Association and the School of Theology. It also bought a stake this year in Suntec Singapore's convention centre for $310 million through a special-purpose investment holding company.
Mega churches such as these have become more than just religious organisations. They now have separate entities for their offshoots, both charitable and commercial.
There are no clear rules, however, on how religious organisations and charities should relate to commercial activities, save for a clear governance principle and what the law determines is taxable or not, said Associate Professor Ho Yew Kee from the National University of Singapore.
The corporate governance expert said one reason to separate operations is to ringfence the religious organisation from financial liabilities should something go wrong.
"Let's assume I conduct a catering business within the church. If there's a mass poisoning, I can be sued, and I can bankrupt the whole church.
"If I set up a company to do catering, if there's a financial disaster, only the company will go bankrupt," Assc Prof Ho said.
The business aspect of mega churches has intensified in recent years.
New Creation's Rock Productions is building an integrated hub in Buona Vista with mall developer CapitaMalls Asia. The project, announced in 2007, will cost almost $1 billion. The church claims 20,000 members.
In a 2008 press report, Mr Matthew Kang, one of Rock's directors, was quoted as saying: "When we receive tithes and offering, we have to do something with the money. We can't put it under the pillow."
He said property was a good hedge against inflation.
When City Harvest - which has 33,000 members - announced the Suntec stake in March to its congregation, it clarified that the investment was "specifically intended to hedge the church against its rental costs at the same convention centre, and dividends received will help to defray rental costs".
The investment is separate from other regular activities of the church. Its holding company does not have charitable status and is not entitled to any tax or other concessions.
On an individual level, City Harvest founder Reverend Kong Hee owns two companies - International Harvest and Skin Couture - with his wife Ho Yeow Sun.
At least two entities that are said to be now independent of the church - education provider City College and dance school cum social enterprise O School - were also founded by him, according to the biography on his website.
City Harvest did not respond to MediaCorp's queries yesterday about the financial checks and balances it has in place. New Creation also declined to comment when posed the same questions on Tuesday.
Seventeen City Harvest members including Rev Kong are being investigated by the Commercial Affairs Department and Commissioner of Charities for alleged misuse of funds.
Last night, the church's executive pastor Derek Dunn issued a statement to thank members for their "kind words of encouragement".
He said the church was unable to furnish members with updates as investigations are still underway.
But it is cooperating fully with the authorities, and operations continue as normal, save for the planned closure of its corporate office after an international conference last week.
Article 2 :
Commercial activities may expose charities to governance risks
By Hoe Yeen Nie | Posted: 02 June 2010 2118 hrs
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SINGAPORE : The commercial activities of City Harvest have generated interest recently. And experts said religious charities that go into business expose themselves to governance risks, including the lack of proper checks and balances.
For mega churches like City Harvest, a huge membership base means more funds - but also higher expenses. And they are not the only ones which have gone into business to raise revenue.
For example, at Mount Sophia, there are several plots of land belonging to Singapore's Presbyterian and Methodist churches. In 2002, the Methodist Church reportedly leased out land to a commercial developer for S$50 million.
Experts said that in the past, to be good stewards of their assets, some religious organisations may choose to invest their excess resources in fixed-deposit accounts.
But over time, due to low returns, these are not seen to be making the best out of their assets. But once these organisations move into bigger investments and commercial ventures, that is when more complicated governance issues may arise.
One pitfall is the lack of clear protocols for charities, as the law does not currently provide for this. Instead, the law only delineates what is taxable or not.
Charities in Singapore have to abide by a code of governance, but any company that is formed as an offshoot has to follow the Companies Act.
Associate Professor Ho Yew Kee, Vice-Dean, NUS Business School, National University of Singapore, said: "Unfortunately, charities and religious charities sometimes are not endowed with the procedures, the mechanisms, the safeguards, because a lot of religious charities, the basic working relationship is that of trust, that of believing in a common faith."
He added: "Within a religious authority, you may have a very senior person that is a spiritual authority or spiritual figure, where the rest of the board basically give their consent to whatever he or she says. And this immediately can create check and balance problems."
Prof Ho said there are pragmatic reasons for setting up a separate legal entity to handle the business.
He said: "Let's assume if I conduct a catering business within the church - if there's a mass poisoning, I can be sued and I can bankrupt the whole church.
"If I set up a company to do catering, if there is a financial disaster, only the company will go bankrupt. I ring-fence, I at least protect the church from the financial liabilities."
17 individuals and companies connected to City Harvest Church are being investigated over possible misuse of funds.
The church, in its latest notice to members posted on its website, said that its corporate office will be closed "in line with our plan to give the management and staff rest after the hectic Asia Conference week".
The 5-day conference at the Singapore Expo ended over the weekend. The church added that it "has cooperated and will continue to cooperate fully with the authorities". Meanwhile, church activities will go on.
