Enhancing Civil Society

8/2/2019 Enhancing Civil Society

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Enhancing Civi l SocietyA proposal to ident if y and implement a package of

measures to improve the accountability and

performance of civil society in Malaysia

Prepared by: Steve McCoy

January 2008


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Summary

The Civil Society Sector1 exists to create a better society. It provides vital

services, strengthens communities, identifies and addresses new needs,

provides volunteer service opportunities and an outlet for the philanthropic

aspirations of the public, and is often a powerful advocate for the marginalised

in society. There are considerable benefits to society in having a civil society

sector which is modern, dynamic, innovative and equipped to meet the

challenges it faces.

One of the most crucial challenges faced by the sector lies in its ability to build

and maintain public confidence. A lack of trust in the public arena represents a

significant barrier to the sector developing its full potential.

The sort of public confidence needed by the sector is not one that can be

created overnight by a public relations branding exercise. Rather, it needs to

be cultivated over time with 3 important components:

First, it must be built on a foundation of good governance, high accountability,

ethical practice, and substantive programmes producing a track record ofpublic-benefit service provision verified by credible impact and performance

assessments.

Secondly, it can only be built through the provision of relevant information

made available and accessible2 in the public domain.

Thirdly, i t can only be built when good intent ions are matched by a capacity to

carry them out.

This proposal seeks to address the question on how the sector can build and

maintain public confidence and overall credibility by identifying and

implementing a package of measures that will create a more enabling

1 for the purposes of this proposal, the term Civil Society Sector is used broadly to describe the

sum total of not-for-profit organisations and networks that lie outside the formal state

apparatus, and makes no distinction between it and some of the other terms used to describe

the sector - third, informal, non-profit, not-for-profit, non-governmental, voluntary, charity,

philanthropic, community, tax-exempt, social enterprise, and so on. One of the background

documents proposed in stage 1, Towards a Taxonomy of Civil Society , will deal with the

question of terminology (both definitional and classificatory) and how this impacts analysis of the

sector, public perception, and the ability to manage expectations.

2Accessib le here means that the informat ion is easy to obtain, and that the informat ion is easy

to understand.


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operating environment for the sector, and enhance its ability to overcome

barriers that make it difficult to deliver high-quality public services, engage in

effective cross-sectoral partnership, and in particular, meet the criteria of the

aforementioned 3 components.

The project proposed is posit ioned within the context of a wider nat ional

concern to improve integrity in public life as expounded in the National

Integrity Plan (NIP), published in 20043. This proposal argues that an approach

which sets out to realise the integrity agenda for civil society as it is spelt out

in the NIP4, is an appropriate and good means of achieving these ends.5

However, the proposal suggests that a process rooted solely within the sector

and consisting of the adoption of self-regulatory frameworks to improve

integrity is unlikely to achieve the objectives set out in this agenda, and argues

for a holistic, multi-sectoral approach which attends to both regulatory andself-regulatory mechanisms in parallel6.

Such an approach is similar to those already being implemented for the

government and private sectors, and the proposal rests on the premise that

any serious intent on realising the integrity agenda for civil society will require

similar levels of political will and resource deployment.

In addition, the proposal recognises the importance of taking a long-term view,

and argues for permanent solutions to be found for the need civil society has

for resources beyond those required for the timeframe of this project, so that

any impetus created in this direction may be sustained.

Through a focus on 4 main strands - regulatory frameworks, self-regulatory

mechanisms, information provision, and sector capacity - the proposal

suggests a mapping of the current landscape of the civil society sector, and a

3The National Integrity Plan, http://www.iim.com.my/v2/pin/eng/hubungi.htm

4 The integrity agenda for the civi l society has the fol lowing objectives: Firs t, to enhance the

integrity of civil society organizations (or NGOs); secondly, to enhance the role of NGOs inpromoting integrity; and thirdly, to strengthen cooperation between NGOs, the government and

the private sector in enhancing integrity. See NIP, Section Title: Strategies in implementing the

National Integrity Plan, point 14.

5 The difference between means and ends here is used conceptually, and not meant to

suggest that the pursuit of integrity in public life is not a laudable end in itself. It is, however, a

useful concept to distinguish between public confidence as an indicator of good service delivery

(service being the ends of public life), and integrity as the means by which the service is

delivered. This theme - the difference between means and ends - is taken up further in one of

the background papers suggested in Stage 1 of the project, which looks at the process of

embedding self-regulatory frameworks and other ethical codes into organisational culture.

6Although the generic term regu lation can be used to define the whole gamut of accountabil ity

processes and mechanisms, for the purposes of this proposal, it is used in its narrow sense -

referring to statutory supervision of the sector through the mandatory requirements of its legal

framework, and is thus distinct from self-regulatory frameworks which are taken on as

accountability tools by civil society organisations and networks on a voluntarily basis.
http://www.iim.com.my/v2/pin/eng/hubungi.htm%06http://www.iim.com.my/v2/pin/eng/hubungi.htm%06http://www.iim.com.my/v2/pin/eng/hubungi.htm%06


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review of adaptable best practices models, before settling on a reform

package to enhance the sector.

The project is designed in 5 Stages:

The first stage is essentially preparatory in nature - with the gathering of

baseline date on the current state of the sector, and information on key

governance and accountability issues in the form of background papers. Once

gathered, an interim report will be published and the information contained

therein re-packaged and made ready for consultation through various means.

The second stage is consultative in nature, where views and opinions on the

key challenges facing the sector and the options for moving forward are

canvassed from the sector and its main national stakeholders.

This stage is fol lowed by an analys is of the findings and the production of a

final report containing various recommendations for reform, whether they be

changes in primary legislation, policy, administrative practice etc.

After a further round of track-specific consultat ion, and once accepted by the

relevant authorities, these recommendations are then implemented in the

fourth stage, along with a series of capacity building and training initiatives

following the launch of the final report. Depending on the breadth of

recommendations, several implementation tracks will run in parallel, each with

their own monitoring and reporting protocols.

The final stage provides for independent evaluation of the process as a whole,

and culminates in an evaluation report after a suitable fixed period of time,

which would provide a basis for any fine-tuning that might be required and a

starting point for future reform of the sector to ensure that regulatory

frameworks keep pace with contemporary developments.

The proposal env isages a multi-sectoral Nat ional Steering Committee

overseeing a programme of activities initiated and coordinated under theauspices of the IIM or a joint UNDP-IIM team, with a mixed Project Team

supported by an Advisory Group reporting directly to the National Steering

Committee.

The proposal design also envisages the set up of a new body/inst itution at

Stage 4 to supplement the work of, or take over from the Project Team so that

initial capacity building initiatives may be carried on beyond the timeframe of

the project to ensure sustainable growth and steady progress in the sector.

As such, the project is expected to generate a number of documents,

including:


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a Project Scope Document accompanied by background papers.

various written submissions in response to the Scope Document.

a Project Team Interim Report which incorporates data from written

submission and finalises the scope of the project.

a Consultative Manual which provides general guidelines for the

participatory process, details of the various processes used to

canvas opinion, and discussion papers formulated from the Interim

Report.

a Project Team Final Report which reviews the process, lists the

recommendations for reform and the rationale behind them, and

sets out a timetable for implementation along with associated their

mechanisms.

Response Reports to the final report from various authorities with

amendments, if any, to the implementation timetable.

various track-specific implementation progress reports. a Final Evaluation Report measuring the impact of the project as a

whole.


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unhindered despite these concerns.10 Nonetheless, the fact that public

discontentment may not yet have reached critical levels should not be seen as

a licence for complacency. Neither ignoring nor failing to address this issue

adequately should be options, as there are considerable advantages to

addressing governance dysfunction in the sector before the onset of a crisis.

Recognising the importance of a culture of integrity and good governance, the

Malaysian Government initiated and formulated the National Integrity Plan

(NIP) in 2004 to fulfill the fourth challenge of Vision 2020, namely, "to establish

a fully moral and ethical society whose citizens are strong in religious and

spiritual values and imbued with the highest ethical standards"11. A new body,

the Integrity Institute of Malaysia (IIM) was formed in 2005 to spearhead the

plans implementation, and an 18-month capacity building programme with

UNDP began in September 2005 which resulted in the joint publication of a

guiding framework to the NIP published in February 2007.12 This documentprovides a theoretical and practical (best practices) framework for the NIP13,

offers guidelines for informed discourse and discussion concerning the various

elements in a National Integrity System14, and is intended to stimulate further

research into these elements15.

The implementation of the plan began in Apr il 2004 with its first phase of

activities taking it to 2008. During the 9th Malaysia Plan period (2006-2010),

the government has indicated its intention to intensify its efforts to enhance

the integrity and transparency of the public and private sectors and further

improve the level of good governance in order to facilitate development16 -

this includes the integrity agenda for civil society17.

10This is often achieved either through an organisations association with people of eminence,

or by leveraging the emotional content of some of the issues dealt by them (children in need,

humanitarian aid, environmental concerns etc.), or through the simple fact that service provision

needs often outweigh apprehension over performance and actual delivery.

11Message of the Prime Minister of Malaysia in the introduction to the NationalIntegrity Plan.

12Mr Jeremy Pope, former Managing Director of Transparency International was appointed in

August 2005 to help frame the curr iculum of the IIM. He ran a week-long course for 70 Master

Trainers from the public serv ice, private training firms and civi l society organisations; delivered a

lecture to senior government officials and business leaders, and prepared the report, National

Integrity System: a Guiding Framework, following a series of consultations and panel

discussions.

13National Integrity System, p.vii

14National Integrity System, pp.vii, xv

15

National Integrity System, p.xvi

16The Ninth Malaysia Plan 2006-2010; 25.13, p.488

17The Ninth Malaysia Plan 2006-2010; 25.14, p.489


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Understandably, most of the efforts made to strengthen integrity and good

governance within Malaysian society have been focused on the government

and private sectors.18

Measures taken have included legal review and reform19; the establishment or

strengthening of regulatory and oversight bodies20; the streamlining of

associated procedures21; the promotion and adoption of ethical codes of

conduct, good governance guidelines, and administrative best practices to

supplement legal frameworks22; the provision of capacity building initiatives

18 Most of the corruption in a society involves two principle actors the government and the

private sector National Integrity System, p.60. This is also driven in part by the privatisation of

traditional public sector activities making the need to check possible corruption in the activities

of both arenas all the more urgent.

19For example, Anti-Corruption legislation has been updated 3 t imes since it was first passed in

1950. Regulations such as Listing Requirements, Practice Notes and Guidance Notes have

been reviewed and updated to enhance corporate governance. Company directors are now

required to attend the Mandatory Accreditation Programme and the Continuing Education

Programme, and a review of the corporate governance framework for financial institutions by

Bank Negara Malaysia improved the minimum qualifications for independent directors,compensation issues, and Minimum Internal Audit Standards. (9th Malaysia Plan, 25.07; 08, p.

486) . There has also been a review of current practices for the formation of independent audit

committees and the appointment independent auditors. (NIP, p.118) and Whistleblower

legislation (NIP, p.102, and National Integrity System chapter 18).

20 For example, the Ant-Corruption Agency, set up in 1967, intensified its approach in

addressing corruption (9th Malaysia Plan, 25.12, p.489). The Companies Commission of

Malaysia (SSM) stepped up surveillance activities to ensure compliance to the Companies Act

1965 and the Registration of Business Act 1956 (9th Malaysia Plan, 25.09, p.487). Other

oversight mechanisms include The Public Complaints Bureau; The Special Cabinet on

Government Management Integrity chaired by the Prime Minister and Integrity Management

Committees at federal, state and district levels; The Companies Commission of Malaysia; The

Securities Commission; Bursa Malaysia Securities Berhad; The High Level Finance Committee

set up by the Ministry of Finance etc.

21 For example, the Malaysian Administrative Modernisation and Management Unit (MAMPU)

was established to initiate changes in government administration.

22For example, core and secondary values have been established for every organisation and

member in the public service. In the private sector, the Malaysian Code of Business Ethics and

the Malaysian Code on Corporate Governance (MCCG) provides a set of principles and best

practices for companies on ethical conduct and corporate governance - listed companies are

required to include a statement in their annual report regarding how MCCG principles are being

applied (see National Integrity System p. 27) in addition to Malaysian Securities Exchange

Berhads Listing Requirements. Rukuniage Malaysia outlines 6 principles for conducting

business. The Charter of Core Business Values was developed on best practices as identified

by multinational corporations in the country (9th Malaysia Plan, 25.11, p.487) Other codes in

use are the Standards of Corporate Governance developed by the Organisation for Economic

Cooperation and Development (OECD) and the World Bank; the International Anti-Bribery

Convention signed in 1999 (see NIP, p.118); the Code of Ethics for Judges (1994). And Code of

Ethics for Members of the Administration (1997).


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through awareness campaigns, fora and other training opportunities 23;

methods for measuring progress 24; access to incentive schemes 25; and the

appropriate allocation of resources.

Civil society is recognised in the NIP and its guiding framework as an

important element in the drive to strengthen good governance and

accountability within a National Integrity System26 and the documents single it

out as a great potential partner in this effort27 , as it encompasses much of the

expertise and networks needed to address issues of common concern 28. As

such, NGO representatives have been mobilised as stakeholders both in the

formation and implementation of the National Integrity Plan.29

In the drive to promote the critical issue of good governance, civil society is

generally viewed as the sector that performs the role of watching and

23 For example, the Companies Commission of Malaysia (SSM) stepped up awareness

campaigns on compliance with the Companies Act 1965 and the Registration of Business Act

1956, and trained corporate directors on their fiduciary duties (9th Malaysia Plan, 25.09, p.487).

The Malaysian Institute of Corporate Governance (MICG) conducted corporate governance

training programmes and the Business Ethics Institute of Malaysia conducted training

programmes to promote Rukuniaga. The Institute of Internal Auditors Malaysia produced various

handbooks and tools in partnership with other agencies, and the Malaysian International

Chamber of Commerce and Industry (MICCI) continued governance training (9th Malaysia Plan,

25.11, p.488). Awareness campaigns like Clean, Efficient and Trustworthy, Integration of

Islamic Values, Excellent Work Culture; Conferences and seminars run by Bursa Malaysia and

the Securities Commission with the aim of fostering the exchange of best practices, knowledge

and ideas towards improving Corporate Social Responsibility, governance and integrity issues inthe business community.

24 A number of indices have or are being deve loped to measure progress being made in

integrity. The Malaysian Corruption Index; the Malaysian Corporate Governance and Business

Ethics Index; and the Malaysian Public Service Delivery Index are part of the National Integrity

Index, along with the Malaysian Family and Community Cohesiveness Index; the Malaysian

Courtesy Index; and the Malaysian Quality of Life and Societal Well-Being Index. The Minority

Shareholders Watchdog Group conducted the Corporate Governance Rating Survey and

developed the Corporate Governance Screencard as well as the Corporate Governance

Monitoring Control Sheet. (9th Malaysia Plan, 25.06; 25.10, p.486, 487).

25 The Government of Malaysia offers significant taxation and other benefits to the private sector

in order to encourage them to establish and maintain meaningful corporate social responsibility

programmes. see National Integrity System, p.27.26 A National Integrity System is the sum total of institutions, processe s, people and attitudes

that collectively work to create trust by ensuring that entrusted power is exercised with

integrity. National Integrity System, p.xv. The NIP lists the components or institutions i nvolved

in the movement to enhance integrity as follows: Family, Community, Civil Society (NGOs),

Socio-culture (education, health, sports and recreation, media, arts, literature and heritage),

Religion, Economy, Politics and Administration. See NIP, Section Title: Overall Approach in

Enhancing Integrity, point 3. The Guiding Framework identifies integrity pillars of a society

seeking to govern itself in an accountable fashion: the Executive, Parliament, the Judiciary, the

Civil Service, Watchdog agencies (Public Accounts Committee, Auditor-General, Ombudsman,

Police, Anti-Corruption Agency, etc.), Civil Society (including the professions and the private

sector), the Mass Media, and International Agencies. National Integrity System, p.viii.

27see NIP, p.83; National Integrity System, p.63.

28National Integrity System, p.60.

29See footnote 12 above.


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facilitating governance reforms in the government and private sectors, rather

than being the focus of reform initiatives itself. However as the guiding

framework points out, civil society is in no position to demand higher

standards in public affairs from the government or private sector than the

standards NGOs themselves are prepared to apply to their own30.

Built into the nature of civil society is the problem of legitimacy. Unlike the

government sector which derives legitimacy from its electorate, and the

private sector which is accountable to their shareholders 31, NGOs are self-

appointed, and thus can be perceived as do-gooders who are not

accountable to anyone but themselves. Although true for all sectors, NGOs in

particular have to earn the trust of the community and the respect of the

government of the day32. While there are exceptions, the concerns expressed

in the press recently would seem to indicate that Malaysian civil society as a

whole has yet to do this.

In addition, the guiding framework notes that many NGOs fail, either through

non-existence or non-compliance, to meet basic internal governance

requirements 33 and hence, fail in their role to protect the public interest.34

Not only does this have repercussions on the sectors sustainability and inhibit

growth35, it significantly handicaps its ability to be a credible and effective

partner in addressing socio-economic issues and participating in the

protection and promotion of the public interest not least of which are efforts

to build integrity throughout Malaysian society.36


31An increased awareness of Corporate Social Responsibil ity and the recognition that i t i s in the

interest of the private sector to have broader responsibilities beyond the bottom line, has

meant that corporations have begun to look beyond traditional strategies to increase

shareholder value. Nonetheless, even with social accounting taken into consideration, the main

accountability conduit for the private sector remains with their shareholders albeit enlightened

shareholders who perceive themselves as community stakeholders as well.


33Critical governance elements include clear organisational goals, the appropriate use of funds

and sustainable financial strategies, the monitoring and evaluation of programme impact and

overall quality management, public disclosure of management systems, policies and decision-

making, the capacity for meeting legal requirements, and unambiguous roles of the Board/

Executive committee, the membership/constituencies and donors.


35 Growth here refers not just to the number of organisations, but to the number of viable

organisations, the number of constructively engaged stakeholders and the quality of the work

being done.

36While a healthy civil society and a informed citizenry is vital to a national integrity system, a

dispirited public acquiescent in the face of social and administrative abuses, provides an

ideal breeding ground for corrupt and abusive conduct National Integrity System, p.61.


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Reflecting this state of affairs, the guiding framework notes that as a first step

in implementing the National Integrity Plan with civil society, civil society

should be invited to examine its own ethical performance in order to

strengthen its capacity and credibility to be a meaningful partner with

government37. Similarly, the NIP states that as for the other components,

such as the family, community, civil society, and the socio-cultural sector, there

are various bodies including NGOs which can initiate integrity-related

programmes38.

Issuing invitations to NGOs to improve their accountability in a situation where

accountability within the sector is weak, is an obvious reaction. However, as

an approach to the overall problem, it is one unlikely to win sufficient sector-

wide support or create the impetus needed to bring about the substantive

changes required to realise the objectives set for civil society in the NIP39, as it

presumes a degree of capacity within the sector largely missing.

By and large, civil society organisations fall somewhere within a spectrum of

three categories with respect to governance and self-regulatory measures.

First, there are organisations with the capacity (motivation, know-how and

time, as well as financial and human resources) for good governance and

accountability - such organisations would, in all likelihood, have these in place

already. As the guiding framework notes, responsible NGOs ensure that they

are run democratically and accountably.40

Secondly, there are organisations that recognise the importance of good

governance, but lack the capacity to embed these measures41 into their

organisational culture. Such organisations may have or could develop codes

of conduct and ethics that are well-intentioned, but nonetheless end up as

being vague expressions of principle - providing little more than window


38NIP, Section: Title: Overall Approach in Enhancing Integrity, point 6.

39The integri ty agenda for the civi l society has the following objectives: Firs t, to enhance the

integrity of civil society organizations (or NGOs); secondly, to enhance the role of NGOs in

promoting integrity; and thirdly, to strengthen cooperation between NGOs, the government and

the private sector in enhancing integrity. See NIP, Section Title: Strategies in implementing the

National Integrity Plan, point 14.

40 National Integrity System, p.62. A number of professional bodies and NGOs have made

promising attempts at self-regulation. The NIP notes the Malaysian Bar Council, the Malaysian

Medical Association, the Malaysian Board of Engineers, the Malaysian Board of Architects and

the Association of Chartered Certified Accountants; consumer associations, teachers

associations, care providers, environmental organisations and other civil society organisations

that monitor adherence to ethical values such as human rights, good governance and

transparency. NIP, p.119.

41see footnote 33 above.


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dressing, not unlike the production of annual reports that are often public

relations exercises42.

Thirdly, there are organisations comfortable with the status quo and

complacent over their level of service delivery.43

Any approach attempting to realise the integrity agenda for civil society would

have to meet the dual challenges of providing sufficient incentive to overcome

the inertia inherent in category 3 organisations, and providing enough support

and resources for category 2 organisations to be able to breathe life into what

otherwise would be decorative documents.

Crucially therefore, such an approach must be holistic, and not piecemeal, on

a number of different levels.

First, the approach needs to be holistic in that it needs to attend to both

regulatory and self-regulatory mechanisms.

Regulatory mechanisms include legal and fiscal frameworks for civil society,

their associated regulatory or oversight bodies, and the monitoring and

enforcement procedures that go with them. Mandatory provisions within a

legal framework provide donors with an assurance that their money will be

used for the purposes for which it was given, and protected from

fraudulence44 and/or financial incompetence. It also provides registered civil

society organisations a certain degree of legitimacy through the immediate

public perception that they are regulated by the state.

The heterogeneity of the sector, with a wide var iety of types, sizes, themes,

capacities and structures makes it impossible to formulate a single framework

that can address all accountability issues of the sector. The regulatory

framework, therefore, provides civil society with minimum standards of

accountability, and needs to be supplemented by sub-sector specific voluntary

self-regulatory frameworks.

42National Integrity System, p.63. The gulf between category 1 and category 2 organisations

should not be underestimated. The difference in being able to perceive a self-regulatory

framework as a means-to-an-end with a behavioral focus, rather than an end in itself with a

perception or PR focus, is considerable.

43 Such a mindset is reinforced by a working environment that continues to provide financial

support for activities through various means and mechanisms (see footnote 10), without

meaningful results-orientated monitoring and evaluation of these activities (see for example

Auditor-Generals comment in footnote 7). See also Working Assumption 4 below.

44 While the scale of irregularities is probably minuscule compared to government and business-

sector misconduct, the public should rightfully expect a much higher standard of conduct from

civil society groups that rely on voluntary contributions.


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The need for self-regulation is also driven by the recognition that i t is difficult , if

not impossible, to build a culture of ethics and accountability through

obligation alone. Self-regulatory mechanisms include codes of conduct and

ethics, organisational values, policies, procedures and other internal

governance instruments that may either be tailored to individual organisations

or shared across networks which could be sectoral, national or international.

They allow civ il society organisations to move beyond the min imum standards

provided by regulation, and build credibility, effectiveness and sustainability

through the adaptation and application of best practices of the field in which

they operate.

An enabling environment for civil society requires both, mandatory regulatory

mechanisms - which require obligation, and voluntary self-regulatory

mechanisms - which require willingness, in optimal working condition.45

In addition to these frameworks, enforcement and the dissemination of

information are equally important in ensuring their efficacy. Without adequate

enforcement, regulatory mechanisms can be no more than bureaucratic

hurdles for organisations to overcome. Without an adequate dissemination of

information on the sector to the public46, regulatory mechanisms cannot be

the accountability tool for the sector it ought to.

Secondly, the approach needs to be holistic in that a reform of regulatory and

self-regulatory frameworks must be complemented with capacity building

mechanisms.

The capacity for regulatory bodies to be able to enforce the min imum

standards of accountability for civil society efficiently and fairly, and the

capacity for civil society organisations to be able to meet their legal and fiscal

requirements without compromising mission accomplishment, needs to be

addressed with support mechanisms put in place to ensure that this is so.

Capacity building objectives should also include looking at the provision of a

permanent solution for the constant need civil society has for knowledge-based resources and expertise, so that organisations may gradually and

continually improve performance as their internal capacity allows.

45see Working Assumption 4 below.

46 High standards for disclosure and public reporting are needed. Vehicles such as annual

reports, organisational and project evaluations, strategic plans based on external assessments,

and regular communications to provide channels for public access to information about the

organisations work, financial status, governance structure and operational impact. Information

provision under the regulatory framework should include a reliable set of public assessment

records that will distinguish bona fide NGOs from those that are not, and provide appropriate

overall and sub-sector specific performance indicators from an independent source, so that the

public is not forced to rely solely on individual brands and self-supported claims when basing

decisions on providing support.


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Thirdly, the approach needs to be participatory and consultative in method,

and holistic in terms of constituency. That is, the process needs to be able to

reach and engage the whole of Malaysian civil society47 , and also include its

main national stakeholders in the government and private sectors.

The breadth, in terms of const ituency, of such an undertaking raises a number

of challenges:

First, the number and diversity of views that would undoubtedly come from

such a wide-ranging constituency provides a considerable organisational

challenge - one that demands careful and detailed planning to flesh out the

participatory framework provided in the project design.

Secondly, it raises the need for a central convening authority. Unlike the

government and private sectors, no single civil society organisation has theresources to galvanise the whole sector, neither is there an umbrella body or

network that can fulfill this function.48 As such, this proposal envisages a multi-

sectoral National Steering Committee overseeing a programme of activities

initiated and coordinated under the auspices of the IIM or a joint UNDP-IIM

team.

Thirdly, a multi-sectoral approach raises questions concerning the relationship

between the sectors beyond those of a practical or organisational nature - in

particular, the role each would play within this process of review and reform.

Suggestions of a lack of accountability or unethical behaviour would naturally

provoke a defensive reaction, regardless of the sector, organisation or

individual involved. The natural tendency of NGOs would be to grapple with

these issues from within, and on their own terms. This tendency arises, not

only because independence is one of the core values and key strengths of the

civil society sector, but it is also driven in part by the fact that there has been a

history of States bringing in new laws to curb the influence of NGOs when it is

felt politically expedient to do so.

Sensitivity to the fact that governments can use regulatory mechanisms as a

manipulative tool to silence dissenting voices, and/or the fear that a

strengthening of accountability may lead to an overbearing influence from the

private sector (as funders) and the government - which could then lead to co-

optation, a deflection of original purpose or a stymieing of innovation - is

47 this refers not only to those organisations that are more towards the category 3 end of the

spectrum, but also to the need of ensuring that those oriented more towards advocacy work are

involved as well as the usual service-delivery organisations.

48 The NIP ment ions a possible role for the Registrar of Societies, but this is limi ted to

monitoring the implementation of integrity programmes (see NIP, Section Title: Overall Approach

in Enhancing Integrity, point 6); and in any case, the Registrar of Societies has no jurisdiction,

for example, over NGOs registered under the Companys Act.


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reflected in the NIP. Its overall approach states that the implementation,

monitoring and coordination of integrity-related programmes should be done

from below (because) we need to be mindful of the sensitivity of these

various groups to what they may perceive as outside meddling and

interference49.

Such sensitivity, however real, could inhibit appropriate action or, at best, lead

to incoherent action counterproductive to overall aim of the NIP, which is to

foster a culture of integrity in a comprehensive, integrated and systematic

manner50.

While the independence of the sector is crucial, the government has an

important role to play in providing an efficient and effective regulatory system

and for providing support.

The guiding framework to the NIP points out that,

the government has a duty to provide a legal and regulatory

framework which allows the necessary space for civil society to

operate. This includes permitting freedom of expression, freedom

of association, and freedom to establish non-governmental entities.

Laws... should be clearly understood, accessible, consistent with

international norms, and not needlessly restrictive or

cumbersome.51

With these guidelines in place, and when a review and reform process is set

within the context of the wider national concern for integrity in public life as it

is spelt out in the NIP - where independence of the civil society sector is

essential to fulfilling its role as one of the pillars of integrity in the national

integrity system - perceptions of meddling and interference are unwarranted.

Civil society needs to be equally engaged with the government sector in a

horizontal, participatory and consultative process seeking broad-based

discussion and canvassing a wide range of views and opinions 52 so that the

delicate balance of an effective legal framework can be found - one thatprevents fraudulent diversion of charitable assets for private gain, builds public

confidence in the sector and stimulates it to better performance, protects the

independence of the sector while at the same time protecting legitimate social

49NIP, Section Title: Implementation Mechanism, point 13. See also NIP, Section Title: Overall

Approach in Enhancing Integri ty, points 2 and 11.

50NIP. Section Title: Factor Affecting Integrity, point 14.

51National Integrity System, p.61

52 It is also hoped that the impetus created by this holistic approach would also provide the

sector with opportunities to discuss and address some of the other pressing issues pertaining

to the sector, such as the problem of duplication within operational fields and the paucity of

professional level human resources and expertise.


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interests from abuses of freedom of expression and association which do not

meet public benefit criteria.

In addition to the need for a holistic and systemic approach, the guiding

framework also notes that meaningful change is unlikely to come about in the

absence of strong political will53 with high level engagement and sufficient

resources being made available to see the process through to completion.

This proposal, therefore, bui lds on the intent spelt out in the NIP and its

guiding framework, and applies the principles contained therein into a

schedule of activity with the overall objective of building and maintaining public

confidence in the civil society sector as a measure of its credibility by

identifying and implementing a package of measure to enhance the operating

environment of the sector.

53National Integrity System, p. 2.


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Assumptions and Theory of Change

The following assumptions lie behind the development of this proposal:

1. That it is not only good, but essential for organisations and people

to be progressively more accountable in a stakeholder democracy.

2. That an effective, efficient and accountable civil society sector,

alongside a similarly healthy government and private sector, is a

mark of a secure and confident society in the modern world, and

indispensable for its sustained development.

3. That in the development of society, the government, private and

civil society sectors have distinct but complementary roles; and

there is value in working in partnership towards common aims andobjectives.

4. That the establishment of an enabling environment would enhance

the performance of the civil society sector to the benefit of society

as a whole.54

5. That while a culture of accountability cannot be built on the basis

of obligation alone, mandatory requirements through legislation are

nonetheless essential tools in establishing this culture, alongside a

willingness to formulate and submit to voluntary codes of practice,conduct and ethics.

6. That regulation without enforcement is meaningless bureaucracy,

and cannot be the accountability tool for building public confidence

and support that it ought to.

7. That contextual matters matter, and any reform initiatives must

reflect current realities and socio-political sensitivities.

Key Factors

The bulk of the key factors that need to be addressed by the sector wil l

emerge following the audit of the sector, and from the written submissions to

54 This assumption is naturally intuitive. Counter-intuitive, however, is the discovery that civil

society can flourish, albeit underground, in an environment that is extremely restrictive, as has

been the case with some totalitarian regimes or in an environment where civil society has had to

compensate for weak government. It would seem that the worst possible environment for civil

society is one where there is a relatively strong government, and little is expected from civil society

in return for financial support - so that the perform or perish principle is absent.


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the project scope document and background papers55 proposed in stage 1.

These wil l include guiding principles, gaps in pol icy, def iciencies in service,

opportunities for administrative efficiency gains etc.

However, the 5 general factors identified in the NIP56 as those that can

undermine integrity are all directly relevant to the civil society sector and are

considered here in brief.

Individual Weaknesses

The NIP points to the lack of a value system among individuals through a lack

of a proper religious upbringing, weak self-discipline and work ethics, the lack

of an ability for self-appraisal, and life demands that may increase the

temptation for corruption and an abuse of power.57

In concert with the NIP and its guiding framework, the primary thrust of this

proposal in dealing with this factor is on building a culture of integrity and

reforming systems, rather than on blaming individuals.58

Leadership

As noted in the NIP, leadership is extremely vital in developing the culture of

any organisation or of a society59.

Civil society organisations are governed by Board members or Trustees, and it

is from here that good governance measures and accountability habits are

formulated. They act as guardians of the interests of the organisations

membership or constituency, while ensuring that the organisation operates in

a way that is in compliance with statutory obligations and in accordance with

its own mission and values. In addition, they need to proactively and self-

critically take responsibility for organisational structures, operations, policies

and activities; and develop accountability mechanisms for internal practice

and external relations with those their organisation interacts with on an

ongoing basis - donors, partners, suppliers and contractors, as well as the

communities in whose name resources are leveraged to undertake certain

pieces of work.

55A suggested list of Background Papers can be found in Appendix 1.

56See NIP, Section Title: Factors Affecting Integrity, points 1-14.

57

NIP, Section Title: Factors Affecting Integrity, points 4-6.

58see National Integrity System, pp.vii,3.

59NIP, Section Title: Factors Affecting Integrity, point 7.


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Weaknesses in accountability throughout the sector is in part, a result of a

weakness in its leadership. In support of the National Integrity Plan,

Transparency Internat ional Malaysia entered a plea for NGO board members

to be trained in accountabilityto ensure that NGO leaders effectively manage

their own organisations and enhance their integrity60. The guiding framework

noted problems associated with the failure of Boards to develop guidelines on

its functions, tenure and active participation in the internal governance of an

NGO. It particularly draws attention to the lack of democratic internal

governance elements in many Malaysian NGOs, as most operate with a

handful of individuals or around the personality of a single individual. Such

boards, often founder-driven, tend to dominate and influence the agenda of

the organisations to the detriment of the organisations independence.61

Weaknesses of governing boards in the sector, however, are not limited to an

overbearing dominance and micro-management, but range from this to the

other end of the scale - an under-engagement by the Board on the issuespertinent to the organisations they serve, and the tendency to rubber-stamp

decisions made by management.

In addition to the governing board, leadership is also provided by the

executive or management of an organisation. Although secondary, the quality

of guidance offered to a governing Board by the executive and the sort of

working relationship forged between the two can be just as crucial in

determining the overall performance of an organisation.

While legal reform is one option62 , the main thrust in this proposal for

addressing and improving the quality of leadership in the sector lies with the

identification and promotion of self-regulatory mechanisms, resource

provision, and capacity building initiatives.

Systems and Procedures

The NIP identifies 6 aspects relating to systems and procedures that affect

integrity.63

A lack of transparency in the management of public interest.

60www.sun2surf.com/article.cfm?id=12968, 13 February 2006. See National Integrity System,

p.62

61see National Integrity System, p.62

62For example, the guiding framework suggests that the lack of any legal requirement on the

tenure of board members in The Societies Act 1966 should be reviewed. see National Integrity

System, p.62. Other schemes that fundamentally challenge governance dysfunction, such as

ensuring that governing boards are selected and operate according to clearly defined and

transparent procedures, could be looked at as well.

http://www.sun2surf.com/article.cfm?id=12968http://www.sun2surf.com/article.cfm?id=12968http://www.sun2surf.com/article.cfm?id=12968


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Weaknesses in the systems, procedures and guidelines for the

implementation of tasks.

Ineffective and at times select ive enforcement.

The lack of proper monitoring and evaluation of the effectiveness of

strategies or programmes.

The lack of human and material resources.

Outmoded and unclear legal frameworks and the presence of

contradictions in some legislation.

Even without the sector audit proposed in stage 1, a quick glance should

indicate that all 6 aspects identified here are relevant to improving

accountability in the civil society sector.

These aspects are relevant on 2 levels:

The first level concerns systems and procedures related to the regulatory

framework that oversees the sector as a whole.

Much of the legal context for civil society is outdated and has not evolved in a

way that best meets the needs of contemporary communities.64 Enforcement

of the legal framework is cursory, and ineffective in dealing with the perception

that it is often selectively applied. The lack of proper monitoring and evaluation

of the effectiveness of strategies or programmes, which was picked up in the

Auditor-Generals report of 200665, directly affects levels of public confidence

in the sector; and the lack of transparency66 and up-to-date systems in the

management of the sector as a whole risks undermining public confidence

further.

Weaknesses in the overall regulatory system are naturally directly related to a

lack of human and material resources. One of the challenges for a reform

programme would be to reorganise systems, modernise and simplify

64The most common lega l forms for civi l society organisations in Malaysia are societies, trust

companies, public limited companies, and Muslim trusts. All legislation covering these formswere formulated within the first 10 years of independence: the Societies Act 1966 regulates the

formation and functioning of societies; the Companies Act 1965 and the Trust Companies Act

1949 provides for the registration and regulation of public limited charitable companies and trust

companies respectively; while Muslim trusts, awqaf (plural of waqf, endowment), are governed

by the Mohammedan and Hindu Endowments Ordinance, 1906. While it is true that the

Societies Act was amended in 1981, it was done so within a specific socio-political context and

not as a result of a review and reform process to improve the performance of the sector. These

amendments were later changed in 1983.

65...monitoring on NGO activities which involved financial aids needs to be enhanced. Jabatan

Audit Negara, Synopsis, Auditor Generals Report on the Activit ies of Federal Government

Ministries/Departments 2006, p.26.

66 A lack of transparency here does not necessar ily imply deliberate secrecy or a lack ofopenness, which are attitudinal problems. A lack of transparency is also the result of the lack of

effective communication channels and proactive measures to make disclosed information in the

public domain accessible.


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procedures with clear guidelines in place so that efficiency gains will be able to

meet, at least in part, this deficiency in resources.

The second level concerns self-regulatory frameworks that are voluntarily

taken on by individual organisations or sub-sector specific networks of

organisations.

Systems and procedures are crucial to managing the complexity67 of civil

society accountability. Although promising models have been developed by

the international NGO community in recent years, particularly in the field of

downwards accountability, the lack of human and material resources, as

identified in this section of the NIP, makes it difficult for the sector to gain

access to and make use of this expertise. As stated earlier, addressing this

capacity deficit must be seen as a priority.

Structure and Institution

The NIP recognises the importance of structure and institutions to the smooth

functioning of society. It notes that outmoded and unfocused structures are

inefficient and ineffective68 , that poor coordination between different

institutions or structures may lead to unhealthy competition and/or a shirking

of responsibility69 , and that a system not thoroughly thought out could lead to

conflicts of interest between different institutions or structures70.

While this section of the NIP has the government sector primarily in mind, the

principles behind the importance of structure, and the part institutions can

play in strengthening accountability are applicable to the civil society sector as

well.

Formal structures relating to civil society largely concern regulatory and

enforcement mechanisms. As noted earlier, the project proposed seeks to

address the fragmented nature of current regulation71 under its legal

67 The complex ity of civi l society accountabil ity arises from its need to deal with mult iple

stakeholder groups. It has 4 accountability levels to consider: First, upward accountability to

donors, and having to meet the formal requirements of regulatory provision. Secondly,

downward accountability to the people who are being served or the constituency in whose

name the rationale for an organisations existence is put forward. Thirdly, lateral accountability to

other agencies, partner organisations and/or networks, and common standards. Fourthly,

internal accountability to organisational mission, values, staff and volunteers.




71For example, there is no central register of civil society organisations in Malaysia, as oversight

falls to a number of different agencies. The lack of this management tool makes it impossible to

monitor the development of the sector, identify gaps and weaknesses in service provision, and

set in motion coherent mechanisms to address these.


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framework and enforcement mechanism review. The project also intends to

explore the possible adoption of informal or semi-formal structures as a means

of addressing the problem of duplication, the lack of coordination, and

unhealthy competition between organisations within the sector.

Culture

The NIP recognises the importance that culture plays in any integr ity system

and notes that a culture that does not stress integrity will influence individuals

to be laid back, irresponsible and develop the habit of shirking their

responsibility or passing the buck to others.72

This proposal recognises that establ ishing a culture of accountabi lity in the

civil society sector will take a sustained effort on the part of multiple actors

over a period of time, and therefore in addition to a review and reformprocess, calls for long-term and sustainable mechanisms to facilitate steady

improvement in accountability and performance throughout the sector.

Expectations

Central to the working methodology of this proposal is a multi-sectoral

consultative stage to ensure that decisions on policy and direction are taken

by consensus following a thorough review of a significant body of material and

wide-ranging discussion.

However, without pre-empting this process, the following are several

expectations that can be used as a guide to determine timeframes, and

human, budgetary and other resources required for this effort:

That review of the regulatory and fiscal frameworks for civil society will

lead to reform - and thus serve as a foundation for an increasingly

enabling environment for organisations operating within the sector.Notwithstanding the extent of reform recommended following the

consultative and analytical stages, a reasonable expectation would be

that existing provisions be repealed and replaced by a single Act

governing the sector (including public trusts) - reflecting a

rationalisation of current legislation to increase its user-friendliness

and effectiveness as an accountability tool; and an updating of the

same to reflect both developments in the field of non-profit regulation,

and the specific contextual factors and current needs of the sector.



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That multi-sectoral engagement and discussion about regulatory

frameworks would spur the further development of sub-sector and

field-specific self-regulatory frameworks; and that adequate capacity

building mechanisms be put in place in order to sustain the impetus

created and ensure steady progress in the areas of good governance,

accountability and public confidence.

That a new permanent body be established to take over from the

Project team at Stage 4, in order to oversee and monitor the various

implementation tracks, and periodically report on their progress. In

addition, this new body would be given the initial mandate of building

public confidence in the sector and equipping civil society

organisations to maximise their potential. Wider responsibilities can

be given to this body after a suitable period and evaluation of its initial

effectiveness, to include supplementing or replacing regulatory

mechanisms as a Commission for the sector.73

Methodology

As noted ear lier, this proposal env isages a multi-sectoral National Steering

Committee overseeing a programme of activities initiated and coordinated

under the auspices of the IIM or a joint UNDP-IIM team, with a mixed Project

Team supported by an Advisory Group, reporting directly to the NationalSteering Committee.

The project is designed in 5 Stages:

The first stage is preparatory in nature - with the gathering of baseline

date on the current state of the sector, and information on key

governance and accountability issues in the form of background

papers.

The second stage is consultative in nature, where views and opinions

on the key challenges facing the sector and the options for moving

forward are canvassed from the sector and its main national

stakeholders.

The third stage is analytical in nature where the findings from the

previous stage are synthesised into a final report containing various

recommendations for reform.

73 This body may either be governmental, or whol ly independent as a non-governmenta l

organisation, or as a quasi-governmental body. The various organisational models and mandate

options are examined in the background paper Institutions and Accountability.


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The fourth stage involves the implementation of these

recommendations, along with a series of capacity building and

training initiatives.

The fifth stage provides for independent evaluation of the process as

a whole.


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Enhancing Civil Society

Stage 1: Preparation

Key Challenge: To ensure sufficient breadth, depth and reliability of information.

Field and Desk Research (see Appendix 1)

Preparation of an updated register of civil

society organisations, and qualitative and

qualitative surveys regarding the sector.

Preparation of the project scope document

and a series of background papers on key

governance and accountability issues

regarding the sector.

Project Scope Document and

Background Papers

Formulation of documents from research

data. Distribution of documents to key

stakeholder leaders; publication on project

website, along with invitation for written

submissions.

National Steering Committee


Project Consultative Manual

Repackaging of material from the Interim

Report into user-friendly thematic and sub-

sector specific discussion papers and

questionnaires. Manual also contains

reference to participatory frameworks and

consultative methodologies.

Project Team Interim Report

Incorporation of written submissions. This

report finalises the scope of the project and

forms the basis of the Consultative Manual.

Written Submissions


Press Release/Conference(Public Survey)

Press Release

(Written Submissions)

Press Conference

(Interim Report)


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Stage 2: Consultation

Key Challenge: To ensure that participatory frameworks and consultative

methodologies are able to capture all voices.

Stage 3: Analysis

Key Challenge: To exhibit level of discernment which ensures that reform

recommendations are both substantial but practicable.

Project Consultative Manual

Information on participatory frameworks and

consultative methodologies.

Discussion papers and questionnaires

Distribution of material and consultation

with sector and national stakeholders

according to participatory framework.

Collation of consultative material

Analys is of consultat ive material

Project Team Final Report

Production of final report which reviews the

process, lists recommendations for reform

and the rationale behind them, sets out

timetable for implementation along with

associated mechanisms.


Press Releases

(Consultative Process)


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Stage 4: Implementation

Key Challenge: To ensure that impetus gained in earlier stages is not lost

through slow implementation.

Stage 5: Evaluation

Key Challenge: To ensure impact measurement indicators, monitoring

mechanisms and reporting protocols are in place in good time.

Project Team Final Report

Presentation of report to relevant authorities,

sector and its national stakeholders.


other authorities and further

track-specific consultation

Implementation of recommendationsthrough various tracks

Responses from various

authorities, includingimpact assessments

Monitoring and reporting on progress of

implementation. Progressive track-specific

and overall impact evaluation of project.

Evaluation Report

Collation, analysis and presentation of

assessment data with recommendations on

continuous monitoring activities and possible

future reform initiatives.

Press Conference

(Final Report)

Press Conference

(Evaluation Report)

Press Releases

(Implementation progress)

Launch of new body

to oversee implementation and

monitor its progress, build sector

capacity, and build public

confidence in sector


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Appendix 1: Field and Desk Research for

Stage 1

Field Research: Mapping the current landscape of the sector

Establish an up-to-date and definitive register of civil society organisations to

elicit crucial information about the sector, including:

Total number of organisations.

Current income of the sector.

Number and distribution of income sources across the sector.

Concentration of income across sub-sectors, geography, and other

demographic factors.

Current expenditure and its distribution.

Est imated current assets and l iabi li ties.

Workforce data - full-time, part-time, voluntary (including Trustees);

% of total national workforce.

Estimated value of unpaid work in relation to direct services,

administration etc.

Growth and development trends in numbers of organisations and

patterns of economic activity.

Distribution of regulatory mechanisms across the sector, vis a vis,

legal form of organisation, governing document, governing body,

liability, responsible regulator etc. Distribution of self-regulatory frameworks across the sector - sub-

sector specific, across networks, or accreditation systems related

to specific activities such as fundraising etc.

Provide a narrative summary of the historical development of the sector as

contextual material to observed growth and development trends.

Perform a public survey (see Appendix 2) on trust and confidence in the civil

society sector to:

determine current levels of public confidence.

determine how levels of trust vary according to different

demographic factors - age, gender, geography, ethnic composition,

personal involvement in the sector, attitude to the sector as a

whole, amount donated to charity in a year etc.

identify drivers of trust.

establish a baseline metric for measuring how public confidence

changes over time.

examine relationship between trust and

- performance of charities.- branding or profi le of chari ties.

- international v local charities.


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- scrutiny of charities.

- understanding of charities.

- involvement with charities.

- attitude towards the sector.

- giving.

- fundraising methods.

Perform an management-level survey (see Appendix 3) of civil society

organisations to:

update and confirm registry information.

supplement registry information so that sufficient categories of data

can be gathered for sector analysis.

canvas initial opinions regarding key issues concerning sector,

including:

- fundraising and f inancial sustainabil ity.- regulation and its administrat ive burden.

- tax exemption and associated procedures.

- sector capacity.

- financial reporting.

- communication strategies.

- self-regulatory frameworks and codes of practice.

- working in partnership with other NGOs, the

government and the private sector.

Desk Research: Key factors, underlying principles, and

adaptable models

Provide the following background papers to accompany the project scope

document:

A taxonomy of civil society.

A background paper that attempts to address the def initional and

classificatory challenges posed by the sector.

Defining the sector involves capturing the distinctive purpose or

characteristics of the diverse range of organisations involved that sets it

apart from the government and private sectors. As a brand name for the

sector, it has important implications for public recognition and

understanding; and as an umbrella term, it is related to an understanding

of distinctions in legal status, legal form, and the implications which

follow as part of the regulatory infrastructure, including tax benefits and

other incentive schemes.


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Classifying the sector involves finding attributes which distinguish

organisations within the sector apart. A classification system which

divides the sector into sub-sectors, whether it be on the basis of

beneficiary grouping, size, function, operational field etc., has important

implications on the monitoring and evaluation of the sector, scale and

scope analysis, the identification of overlaps and gaps in service

provision, and the development of effective self-regulatory frameworks.

Key characteristics and challenges.

A background paper that seeks to identify and provide an overview of

underlying principles and pragmatic approaches to the challenges peculiar to

the civil society sector. These include,

The independence of the sector and how this impacts regulation and

partnership working.

The diversity of the sector and how this impacts competition and sector

sustainability, duplication and efficiency in service delivery, and regulatory

frameworks.

The complexity of sector accountability and how this impacts

stakeholder management.

The legitimacy of the sector and how this impacts involvement in public

policy appraisal and public service planning and delivery.

The transparency of the sector and how disclosure or the lack of it

impacts public confidence.

Regulatory Frameworks

A background paper that considers the statutory supervision and public

scrutiny of the sector based on the premise that an efficient regulatory system

is essential for an effective sector. This paper:

examines the rationale for regulation, and identifies key principles and

components behind an effective regulatory system.

provides an overview of different regulatory models, tools used for

regulation, and the latest developments in the field.

outlines legal issues that make up a regulatory legal framework. describes current patterns of both generic and functional regulation, and

identifies redundancy, overlaps and gaps in the system.

reviews current regulatory infrastructure and jurisdiction, and examines

the administrative burden associated with regulation.

[Note: The legal framework surrounding government support in the form of

direct subsidies through permitting organisations to bid for government grants

and contracts, and indirect subsidies through tax preferences are covered

separately in the background papers Government Relations and Fiscal

Frameworks respectively. The legal framework surrounding public charitable

collection issues is covered by the background paper Accountability in

Fundraising.]


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Fiscal Frameworks

A background paper that examines the principles, systems and procedures

related to tax preferences that are available to the sector and its supporters,

including, income tax exemption or preference for civil society organisations from

- donations, grants, and membership dues.

- capital gains earned on assets or the sale of assets.

- earned income from income-generat ing act iv it ies.

- VAT and customs duties.

- other related tax and fiscal laws such as inheritance tax,

property tax, sales tax, death duties for bequests, etc.

tax credit or deductions against personal or business income tax for

donors.

schemes for promoting tax eff icient giving.

Accountabil ity in fundraising

A background paper on accountabili ty measures covering the area of

fundraising, which is often the public face of the sector and thus has a marked

influence on public attitudes towards the sector. This includes,

an examination of current legislation, jurisdiction and associated

mechanisms governing the public collection of charitable funds.

an exploration of self-regulatory mechanisms to complement

improvements to the formal regulatory system in the form of an overall

code of good fundraising practice, various specific codes covering the

different aspects of fundraising, and possible forms of accreditation for

organisations that voluntarily agree to abide by these codes.

Self-Regulation

A background paper that provides an overview of the latest developments in

generic and sub-sector specific self-regulatory frameworks, and examines the

capacity needed to embed these into organisational culture.

Information Dissemination

A background paper that compares current levels of disclosure, quality of

information provided, accessibility of information and the provision of

communication channels, with what is needed to build public confidence and

greater credibility for the sector. This includes,

the system of providing general and comparative information on the

sector as a whole to the public and other national stakeholders.

standard information returns that are part of the mandatory requirements

of the regulatory framework, and whether these are accessible and

suited to the publics need to base decisions of support.


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self-regulatory transparency indices and disclosure codes that would

allow organisations within the sector to benchmark themselves against

comparable bodies in other sectors, provide credible information on

performance and programme outcomes in a way that illuminates

achievements against objectives, and provide greater consistency in the

way costs and expenditure is allocated so that meaningful financial

comparisons can be make.

Sector Capacity

A background paper based on the premise that, with the except ion of a small

minority involved in the fraudulent practice of diverting public-benefit funds for

private gain, the bulk of the sectors difficulty in building and maintaining a

secure base of public support stems from its lack of capacity in key areas. It

recognises that building sector capacity to ensure that it has the skills,

knowledge, structures and resources to realise its full potential is a crucial

component to achieving this projects objectives. This paper:

examines the different aspects of sector and organisational capacity.

reviews and assesses current sector capacity and identifies key and

priority deficiencies.

provides an overview of options to overcome these with a long-term and

sustainable view to developing the effectiveness and efficiency.

examines the capacity needs of national sector stakeholders required for

the strengthening of constructive and mutually-beneficial partnership,

and for the of managing realistic cross-sectoral expectations.

Government Relations

A background paper appraising current practices regarding government-NGO

partnerships and exploring new ways to help the government and the sector

improve their relationship to mutual advantage, and fulfill their complementary

roles in the development and delivery of public services, including:

the development of a shared vision and a common set of principles.

a working framework on how the two sectors should work together on

national and local levels. best practices in partnership working.

a code of practice to streamline and strengthen approaches to funding

and procurement.

a code of practice to streamline and strengthen approaches to

consultation and policy appraisal.

Partnership with the Private Sector

A background paper examining the tradit ional relationship between the private

sector and civil society, the impact of corporate social responsibilityprogrammes on the sustainability of the civil society sector, and innovative

partnership models for collaborative initiatives between the sectors.


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Institutions and Accountability

A background paper that expands the recognit ion in the NIP of the importance

of structure and institutions, and its assertion that outmoded, unfocused and

poorly coordinated structures are inefficient and ineffective. This paper: identifies the principles behind the importance of structure and the

part institutions can play in strengthening sector accountability.

reviews the different institutions currently involved in the operating

environment of the civil society sector, and identifies redundancy,

gaps and overlaps in function.

provides an overview of the different models of charity commissions,

and a framework for assessing their relative strengths and

weaknesses.

presents the rationale behind the establishment of a new permanent

body as suggested under the expectations of this proposal, outlines a

suggested mandate for this body and lists its functions and

objectives, provides a possible 5-year corporate plan along with

indicators to evaluate its effectiveness, and suggests an

organisational structure with appropriate accountability and reporting

mechanisms.

Participatory framework and consultative methodologies

A background paper based on the recognit ion of the importance of open

dialogue, and the premise that early, consistent and wide-ranging stakeholder

consultation is directly related to engendering ownership and securing the

eventual success of this undertaking. This paper examines:

the variety of forms and platforms available (written submissions,

listening events, meetings and seminars, visits to representative groups

and other interested parties, surveys of stakeholders and the general

public, internet discussions fora, qualitative research including in-depth

interviews and focus groups etc.) to improve decision making by

ensuring that decisions are soundly based on evidence.

the design of a mixture of targeted and general consultations to get thebest spread of views and open up decision-making to as wide a range of

people and organisations as possible.

a general code of practice to ensure consistency across all platforms,

and specific administrative arrangements and protocols for each form.

timeframes so that reasonable intervals are allowed for responses and

their analysis.

human and financial resources required to maximise the effectiveness of

participation and consultation, including the need for a multi-lingual

approach to mitigate the possible effects of privileged access.


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Appendix 2: Public Survey on trust and

confidence in the civil society sector

Purpose:

To determine current levels of public confidence.

To determine how levels of trust vary according to different

demographic factors - age, gender, geography, ethnic composition,

personal involvement in the sector, attitude to the sector as a

whole, amount donated to charity in a year etc.

To identify drivers of trust.

To establish a baseline metric for measuring how public confidence

changes over time.

To examine relationship between trust and- performance of charities.

- branding or profi le of chari ties.

- international v local charities.

- scrutiny of charities.

- understanding of charities.

- involvement with charities.

- attitude towards the sector.

- giving.

- fundraising methods.

Some suggested questions:

How much trust do you have in charities - from 1-10.

How much do you trust charities to do the following - from 0-10:

Make a positive difference to the cause.

Make sure fundraising is ethical and honest.

Spend the money donated wisely and effectively.

Make sure that the organisation is well managed.Make sure a high proportion of donated money gets to the

end cause.

Inform donors how the charity is run.

Inform donors how the money donated was spent.

Inform donors of the impact on the beneficiaries after the

money was spent.

To what extent do you agree or disagree with the fol lowing - disagree a

lot, disagree a little, neither agree nor disagree; agree a little, agree a lot:

dont know.

Most charities are trustworthy.


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Most charities are not trustworthy.

I trust charities more if Ive heard of them.

Charities are regulated to make sure that they act for the

public benefit.

Charities spend too much on their administration.

I trust charities if they help local people.

Charities use unfair fundraising techniques.

I know very little about how charities are run.

I trust charities with well known patrons.

I trust big charities more than small ones.

I trust charities if they help people in other countries.

I am confident donating to an unknown charity if the cause is

good.

Can you name some of the charities that you trust:

Are there any charit ies or types of charities that you dont trust:

Do you trust international charities more than local ones- yes; no; there

is no difference:

Why do you trust some charities more than others:

They have a good reputat ion.

I have seen what they do.I believe in the cause.

They do an important job.

They are regulated wel l.

They are set up for the public good.

I have heard a lot about them.

How important a role do you think charities play in society today -

Extremely important; Very Important; Quite Important; Not very

important; Not important at all.

Approximately how much money did you donate to charity in the last

year - more than RM1000; less than RM100; cant remember; I dont

give to charity generally; I prefer to give good rather than money.

When you are asked to donate money to a charity, do you usually try to

check up on the charity first - Yes; No; I dont give to charity.

Why dont you check up on the charity:

Cant be bothered.

Too embarrassing.

Not enough time.


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Dont know how to.

Dont want to feel ungenerous.

Easier to give a little money to get rid of them.

Prefer only to give to my favourite charities.

I dont ask because I wont know if they are telling the truth

or not.

I dont because the cause is worthwhile.

Other.

Dont know.

When you have donated money, have you done any of the following -

yes; no:

Asked for proof of identification.

Asked to see a val id licence.

Checked to see if the collection box was sealed.

Asked to see a letter from the charity.

Checked if the charity was a registered charity.

Checked that it was a genuine charity (how did you check).

Given to a charity you hadnt heard of.

Given to a charity you had heard of but didnt know how the

money was going to be spent.

Asked how your money was going to be spent.

Found out how the charity was run.

Other.

How have you given to charity over the last year:

Collection box.

Street collector.

Collection envelope.

Sponsored someone.

Door to door collection.

Cheque by post.

Standing order.Credit card by phone.

Credit card by internet.

Joined a charity as a member.

Direct debit on the street.

Newspaper appeal.

Radio appeal.

Charity event.

Bought items for charity (eg, cards, gifts etc)

Pledged money to charity in my will.

Did you give to the tsunami appeal - yes; no; how.


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Have you been involved with a charity - No; Yes, as a volunteer; Yes, as

a paid employee; Yes, as a Trustee; Yes, as a Committee Member; Yes,

as a member.

Are you sti ll involved in that capacity - Yes; No.

In which ways have you or your or friends been helped by a charity over

the last 5 years:

received financial help.

received personal care from charity workers.

received advice from a charity after getting in touch with

them.

used the services of a charity.

other.

none of these.

dont know.

When you are asked to donate money, how important are the following -

from 0-10;

The cause is more important than the organisation asking for

donations.

The method of fundraising is more important than the cause.

The method of fundrais ing is more important than the

organisation.

I prefer to give when I have a chance of winning something

myself, eg a competition or a raffle.

A charity that is officially registered gives me confidence that

the money will be spent well.

What issues relating to charities most concern you - from 0-10:

People posing as fund-raisers/collectors who are not.

Charities paying for their collectors.

High administrative costs of charitable organisations.

Charities are too political/being too political.

Some causes are not allowed to be charities when they

should be.

Some causes are allowed to be charities when they should

not be.

Charities spend too much money on advertising.

Charities spend too much money on organising events.

The government should take more responsibil ity for the kind

of work charities do.The government should give more responsibil ity to charit ies.

Other -


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Dont know.

Nothing.

Which of these would you have most confidence in to give you accurate

and reliable information about charities - from 0-10;

A char itys annual report and financial accounts.

Charity leaflets.

Friends or relatives who have a connection with the charity.

Information you requested from a charity.

A char itys website.

Magazine articles.

Newspaper advertisements/appeals by a charity.

Newspaper articles.

People collecting money for charity.

Radio advertisements/appeal by a charity.

TV advertisements/appeal by a char ity.

TV news or documentaries.

Radio news or documentaries.

Independent information about the performance of a charity.

Other.

Which of these organisations have you heard of:

The Securi ties Commission.

The Companies Commission.

Bursa Malaysia.

The Bar Counci l.

The National Audit Office.

The United Nat ions Development Programme.

Institute Integrity Malaysia.

The Anti-Corruption Agency.

The Law Society.

Which organisation or organisations do you think are responsible forregulating the work of chari

Documents

Enhancing Civil Society