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ACT embezzlement scandal highlights weak regulation of charities
In a country that regularly ranks high on lists of the world’s most generous nations, the incident has exposed a lack of safeguards for the nation's charitable giving.
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Employees of the Aksi Cepat Tanggap (ACT) philanthropic organization work at their office in Menara 165 Tower in Jakarta on July 6. (Antara/Indrianto Eko Suwarso)
T
he embezzlement scandal surrounding popular humanitarian organization Aksi Cepat Tanggap (ACT) has highlighted the country’s lack of regulation of philanthropic groups, analysts have said, noting that the 60-year-old law that governs charitable activity offers little in the way of oversight.
Following a July 2 Tempo exposé that alleged that ACT had misappropriated charitable funds for the benefit of top executives and for expenses unrelated to the organization’s philanthropic activities, a broad investigation into the nonprofit has been opened.
ACT is one of the country’s most successful charities, having collected Rp 519 billion (US$6.7 million) in donations in 2020 alone.
But in a country that regularly ranks high on lists of the world’s most generous nations, the incident has exposed a lack of safeguards for the nation’s charitable giving.
“The main rule was issued in 1961. A lot of things have changed since then,” said Hamid Abidin, executive board secretary at Filantropi Indonesia, an independent association of philanthropic activists and organizations.
The country has at least three sets of rules that govern charitable activity: the 1961 Charity Law, the derivative Government Regulation No. 29/1980 on the collection of donations and the recently issued Social Affairs Ministerial Regulation No. 8/2021 on managing the collection of money or goods.
The 1961 law and its 1980 implementing regulation only cover licensing requirements, while the 2021 ministerial regulation requires only that registered charities submit a financial report to the government.
