Charities in Hong Kong: Section 88 Tax Exemption Status and Related Matters

If your charitable organization holds tax exemption status under Section 88 of the Inland Revenue Ordinance, it is important to be aware of the ongoing compliance requirements that must be fulfilled to maintain that status. In addition, a charity’s Section 88 status does not guarantee that all of its income will be tax-exempt, so it is important to understand the specific conditions for tax exemption before embarking on revenue-generating activities.  

With the contribution from Ernst & Young (EY), PILnet has created a practical guide on these topics, covering the ongoing compliance requirements for Section 88 organizations (e.g. notification and reporting obligations owed to the Inland Revenue Department), the conditions for income to be tax-exempt, and practical tips for charitable organizations. 

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Let’s say you have organized a successful fundraiser to raise money to support the impactful work of your organization or partner organizations. People from within and outside your network have poured in generous donations for your cause. Because the fundraiser was successful and the donations essential to the continuous operation of your organizations or partner organizations, you will probably want to organize a fundraiser again.

Cultivating Donor Relationships

How do you get people interested in supporting your cause again? 

One of the best ways is to provide transparency in how the donations were spent and what kind of impact was enabled by the donations. This can be done through an impact report. In addition to expressing gratitude to the donors, the impact report also enables you to retain your relationship with existing donors and develop new relationships with potential donors.

Demonstrating Organizational/Program Effectiveness 

With more funders transitioning to trust-based philanthropy, a comprehensive review of how donations are making a difference is more important than ever for organizations to effectively fundraise to ensure their financial resilience. 

A fundraiser impact report offers an overview of the goals, objectives, and outcome of the fundraiser. This provides donors with the knowledge that their donations are efficiently spent on worthwhile causes. Additionally, the report enables (potential) donors, volunteers, partners and collaborators etc. to learn more about the organizer, its mission and impact, and its efficiencies of donation utilization. This could attract potential donors and partners to support the organization and its initiatives. 

When communicating the impact of your fundraiser, you want to include both qualitative and quantitative data. For example, in addition to reporting the number of people benefiting from the funded projects, you should also include testimonials from the beneficiaries about the projects.

Transparency and Accountability 

An impact report provides donors with insight into how their contributions were used and the positive impact created as a result. Through clearly communicating program outcomes, financial management, and the organization’s/project’s overall impact, you can build trust and credibility with your donors.

What are the Key Components of a Fundraiser Impact Report? 

Introduction

In the Introduction section, provide a brief overview of the fundraiser: 

• What are its goals and objectives?
• Who was it organized by?
• When and where did it take place?
• What is the total amount of funds raised (amount allocated for grant)?
• Who/what are the beneficiaries?
• What is the total number of beneficiaries?/What is the total benefit?

Organization/ Project Description

If your fundraiser was held to raise funds for your organization or a particular project, describe it in detail. This section is especially important for a fundraiser supporting multiple projects and organizations. 

Let’s use FSI’s 2023 Annual Holiday Fundraiser as an example. In the impact report, you can see a detailed breakdown of each of the six funded projects all over the world. Each project description includes:

• Timeline of the project
• Location of the project
• Organizer/manager of the project
• The reason it receives funding: the credentials of the organizer/manager of the project, the solutions it offers to address challenges in the community
• The amount of funds allocated to the project
• What the funds were spent on
• The number of beneficiaries
• Photos and/or videos of the project
• Testimonials from the beneficiaries and organizer/manager of the project
• Links to the organizer/manager’s website and/or contact information and social media

Financial Transparency

Provide a breakdown of how donations were allocated in as much detail as possible to provide transparency. For an example of how to do this, please refer to the “Funds Raised” section in the FSI 2023 Annual Holiday Fundraiser Impact Report.

Acknowledgments and Conclusion

Don’t forget to thank the people who made this fundraiser possible! These people include the donors, the volunteers who help with data collection and drafting the impact report, the funded organization(s)/project(s) for doing the impactful work they do etc. 

Take the “Conclusion” section as an opportunity to call for action for future donation and support. Invite funders, partners, and collaborators to join your next fundraiser to create even greater shared impact, for example.

Data Collection and Prep Work for the Impact Report 

Now that you know what needs to be included in the impact report, you should have a clear idea of the qualitative and quantitative data you will need to collect to compile a comprehensive impact report. Here are some tips to help you plan your workflow: 

•  Work with your colleagues to list out the different kinds of data and metrics you will need to collect. 
• Think about how you will collect the data and metrics, and discuss division of labour with your colleagues. 
• Brainstorm the time needed for each and all tasks, and draft a timeline to hold everyone accountable for their work tasks and deadlines.
• Include regular check-ins with the FSI team, which can be done online or in person. Take these check-ins as meetings for progress updates or raising whatever queries you may have about your work.

PS!

FSI recently published our 2024 Annual Holiday Fundraiser Impact Report. Check the report out and use it as a reference!

At FSI, we’re always seeking to improve, so if you have any feedback on this guide/template, please do not hesitate to let us know.

The post A Guide to Compiling a Fundraiser Impact Report appeared first on Foundation for Shared Impact.

Our heartfelt thank you to Robin Wong, Monita Cheang, William Skannerup, Nicolas Mayor, Lamia Sreya Rahman, and Jarl SmidtOlsen for helping us enhance the Business Plan Toolkit!

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Introduction

Welcome to our Financial Reports template. Compulsory financial statements are reports that businesses are required to submit to regulatory authorities by law. These documents should provide transparency into the financial performance of the business. Bookkeeping software like Xero or Quickbooks generates various financial statements based on accounting entries, but if you are drafting up your own reports, these templates will give you a great base to start from!

Financial Reports Template (empty)

Download this to your own device to add your inputs and customize for your use.

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Guide to using the Financial Reports Template

1. Income statement (also known as  Profit and Loss statement):This is a quarterly or yearly report that will be readily available to the public. Should clearly outline the inflow of new assets as well as the outflow incurred to produce revenue. It is recommended that you start with your revenue. Expenses and costs are then deducted closely followed by taxes. This leads to the calculation of your profit.
2. Balance sheet: Instead of showing your funds over a given period, the balance sheet shows your assets (what you own) and liabilities (what you owe) and the difference between them at the moment you produce the balance sheet. The difference between the assets and liabilities reveals the book value of the stakeholders’ stake in the company. Assets must be listed from most to least liquid (what can be made into money/ sold fastest). Liabilities are listed in order of immediacy.
3. Statement of cash flows: this statement reveals where the funding comes from and what it is used for (e.g. operations or investments). A statement of cash flow should show the ability of your company or organization to pay bills while funding future growth.

For your additional reference, further information about financial statements with examples can be found here.

Relevant Templates

FSI has prepared for you the essential templates that facilitate your bookkeeping. Click the links below to check them out!

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The suicide rate among youths in Hong Kong aged 15 to 24 years doubled in 2022 compared to 2014, according to the Hong Kong Jockey Club Centre for Suicide Research and Prevention at The University of Hong Kong (HKU). Meanwhile, the Mental Health Association of Hong Kong found in 2022 that close to half of the students aged 18 to 25 years had varying degrees of depression that required medical consultation. However, only one-third of students surveyed by the Chinese YMCA of Hong Kong expressed a willingness to seek help for their mental health issues. 

Worldwide, almost one billion people live with a mental health condition that interferes with all aspects of life and causes disabilities or death. 

To raise awareness of mental health issues and promote efforts to support mental well-being, World Mental Health Day is celebrated every year on 10 October. Coinciding with this year’s World Mental Health Day, FSI’s Impact Lab Course partnered with City Mental Health Alliance Hong Kong (CMHA HK) to host the “Developing a Resilient Mindset for Success” workshop, led by Hilleke van Osch, CMHA HK’s Managing Director with 15 years of experience in health program management and evaluation. 

As an alliance of businesses with a shared mission to create a mentally healthy workplace, CMHA HK is a not-for-profit membership organization that collaborates with mental health experts and partner organizations to protect and support positive mental health for people. A former partner company of the Impact Lab Course, CMHA HK regularly publishes research reports on employee wellbeing and offers training to increase mental health literacy among leaders, managers, and general employees.

Where Stress Comes From

To begin the workshop, Hilleke asked the participants to input on Mentimeter the words that came to mind when they thought about mental health. 

“Five years ago, the words were very negative,” said Hilleke when looking at the word cloud on the screen. “Most of those you’ve written today are positive: ‘confidence’, ‘therapists’, ‘relaxing’. I think that’s a really lovely thing for someone like me who works in this field.” 

However, the word with the highest appearance was still “stress”, which was the main topic of the day. 

“Sometimes, it’s the stress and how you deal with it that teaches you things and makes you realize you can do things. But if you let stress build up too much, you can be less able to deal with the next thing that comes along,” said Hilleke about the spectrum ranging from “good mental health” to “mental ill-health”, with “coping” and “in need of support” in between.

Hilleke’s next question for participants was: “What stressors have had a negative impact on you over the last two months?” The responses were mainly academic and career concerns, family issues and other interpersonal relationships, and managing expectations. 

“It’s interesting that many of you mention family, friends, and relationships. You’re at the age where you establish relationships, so it’s good to see that you’re valuing these things in life. It reflects the stage of life you’re in, and that you’ve got full lives that are full of people,” Hilleke noted. 

Sharing Personal Experiences

The workshop was interactive, and participants had many chances to share their personal experiences with stress. Sharon Feng, a final-year student working with Migrasia, shared, “When I’m stressed, I make a schedule and list out what I need to do. Seeing the list gives me a sense of control. I also talk to people I trust, like my parents, about the tasks I struggle with. After a detailed conversation with them, I feel much better.”

Kathleen Francisca Liem, a student working with Foundation for Shared Impact, added, “My primary source of stress comes from my commitments, both extracurricular and academic. The way I deal with them is to list down all that I have to do within categories like academics or leadership roles, because sometimes I get overwhelmed.”

Hilleke also shared her own struggles: “My biggest source of stress recently has been juggling people’s expectations and demands while trying not to take it personally. I try to see it from their perspective rather than just throwing my hands up in the air and saying, ‘This is ridiculous!’ We’re all just trying to navigate the pressures of meeting someone’s expectations.”

From Classroom to the Workplace

After a brief guided breathing exercise, the discussion shifted to workplaces and the imposter syndrome students may face when transitioning from school to work. Imposter syndrome is characterized by feelings of inadequacy and a lack of belonging, particularly when people step into the unknown, feeling unconfident in their abilities. 

A student offered his experience from a recent internship, “The level of burden is different compared to university. For example, if I do badly on an assignment, I’m the one that fails. At work, other teammates have to take over the work I did not do or cover up my mistakes.”

To that, Hilleke offered her advice: “Stay authentic to yourself and be realistic in what you can do. Don’t try to oversell yourself. Trying to overcompensate for your imposter syndrome only undermines you more. Find what you can do and do it well, and build yourself up from there.”

But how do we do that? Hilleke said the key to supporting your mental health is to build resilience: “Keep trying, but take a break. A lot of literature around resilience shows that resting is as important as pushing. Just pushing yourself on and on won’t get you nearly as far as if you were to stop for a rest.”

She introduced the participants to the PERMA method, which stands for positive emotion, engagement, relationship, meaning, and accomplishment. PERMA is a tool to help with self-care, and the five factors can be integrated into our daily lives to support our mental health. 

 An Essential Workshop for Students and Supervisors

“Through today’s workshop, I learned to recognize my stress triggers,” said Kim Dong Woo, a fourth-year student, after the workshop. “By knowing the triggers and reasons for my stress, I believe I can now find solutions to solve my stress much faster. I would like to start by applying the self-care plan utilizing the PERMA examples discussed today. I want to especially focus on the positive emotions first, as I believe it is the most important aspect among PERMA.”

Sumichhya Gurung, Senior Program Manager at EmpowerU, said that as a supervisor in the Impact Lab Course, she tries to be more mindful about the stress students might deal with in their personal lives. “I will pay more attention to checking in with our interns on a casual basis. I will also create a safe space for our interns to communicate with us if they are dealing with personal challenges, and see if there are resources and professionals to whom I can direct them,” she said.

Hilleke said she loved the unexpected discussions that sparked from participants’ sharing throughout the session. “The conversations give me an idea of what resonates with people. They highlight the areas that are important to people, where I can potentially focus my attention on when I talk to people again on this topic.” 

The last piece of advice she offered was this: “Everyone has to find their own thing. For me, that’s trail running and socializing with friends. Having a laugh with friends is definitely really important, but you need something physical too. You’ve got to give your body something as well. And lastly, plenty of sleep. Sleep is so important.”

If you or someone you know is struggling to cope with overwhelming negative thoughts and feelings, contact the mental health support hotline on Mind HK’s website.

*This blog post was drafted by Hyewon Lee, Communications and Marketing intern at the Foundation for Shared Impact (FSI) during the Fall 2024 semester of the Impact Lab Course.*

The post Developing a Resilient Mind for Success: Impact Lab’s World Mental Health Day Workshop appeared first on Foundation for Shared Impact.

Meaningful volunteer opportunities are an often overlooked part of a company’s purpose and employee development. Too often, organizations try to establish employee volunteer programs as a sort of add on in their spare time. But there is another way to think about volunteering and the time has never been better to reimagine this part of corporate life since businesses are actively and publicly expanding their role in society. This new approach to volunteering involves identifying a nonprofit where your employees can lend their skills and expertise over a designated period of time or on a series of connected events. No matter your industry, your employee’s skills are valuable and in need at nonprofits. For some nonprofits, access to your talent and their skills can be just as — or more important — than dollars.

Read this short read from Beth Bengtson and learn more about it.

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A Guidebook for Entrepreneurs to Build Accessible and Inclusive Businesses (Serving Visually Impaired Persons)

Brought to you by Seekr

Established in 2021, Seekr (Vidi Labs) is an accessibility technology company dedicated to fostering an inclusive environment for VIPs (Visually Impaired Persons). Led by CEO Turzo Bose, COO Lamia Rahman, and Machine Learning Engineer Reshika P V, they developed the Seekr device, a wearable assistive technology designed to help VIPs navigate the world independently.

This is Seekr’s first guidebook to provide entrepreneurs with the insights, and practical strategies to create accessible and user-centric businesses, especially for Visually Impaired Persons. Whether you’re a seasoned entrepreneur or an aspiring change-maker, this guidebook is ready to support your work.

Guidebook for Entrepreneurs: How to Build Accessible and Inclusive Businesses

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This is the eighth post in a blog and webinar series called 101 Digital Marketing & Fundraising Best Practices for Nonprofits, written and presented by Heather Mansfield. Please sign up for Nonprofit Tech for Good’s email newsletter to be alerted of new posts. Thank you!

Related Webinar: Social Media Strategy for Nonprofits
Related Certificate Program: Certificate in Social Media Marketing & Fundraising

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