MCYS MEDIA RELEASE NO: 17/2008

DATE OF ISSUE: 05/03/2008

5 March 2008

MEDIA RELEASE

COMMUNITY FOUNDATION OF SINGAPORE

A New Initiative to Encourage & Facilitate Philanthropy

The Community Foundation of Singapore, an initiative spearheaded by the

National Volunteer & Philanthropy Centre (NVPC), aims to provide a simple, yet
powerful and highly personalised approach to giving, especially for those who
seek professional advice on the philanthropic causes to give to, or know what
causes they want to support but lack the time and resources to manage
sustained philanthropic giving.

2 The Community Foundation will provide a one-stop continuum of services

for individuals who are prepared to make significant donations proactively and on
a planned basis, without necessarily setting up their own foundations as a start.
The Foundation will engage wealth management institutions experienced in
private banking and philanthropy services, to invest and manage the donated
sums.

3 Where feasible, the Foundation will help pool funds from multiple donors
into a common pool, for more efficient management. With such an arrangement,
the costs incurred by donors will potentially be lower than if they were to set up
their own foundations.

4 Donors may direct their donations to their preferred causes. Their

donations may establish funds that are of an endowment1 or draw-down nature.
For a start, donations to the Foundation will be upwards of $1 million. Those who
contribute $1 million or above may enjoy named funds to establish their legacy.
Honouring donor intent is the underlying principle governing the Community
Foundation, which will monitor closely the grants disbursed, and provide periodic
reports to its donors on the outcomes.

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The endowment will be invested through fund managers and investment returns ploughed back
into the community.

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5 The Community Foundation will enable sustained giving and in the longer
term, serve as an incubator of new foundations, where donors who are not ready
to start their own foundations can learn about grantmaking from the Community
Foundation, before they decide to start their own foundations.

6 The Community Foundation will be set up as an independent company

limited by guarantee with its own Board of Trustees. The Foundation, which will
apply for the Institution of a Public Character (IPC) status, will comply with the
advanced tier of the Code of Governance for IPCs, which is the most stringent
requirements for large IPCs with receipts of at least $10 million.

7 Stanley Tan, Chairman of NVPC, said, “The Community Foundation aims

to develop philanthropy by encouraging existing givers to donate in a more
strategic, sustained and substantial manner. It is also aimed at attracting new
faces to the philanthropic scene.”

8 Mrs Tan Chee Koon, NVPC’s Chief Executive Officer added, “The
Foundation will complement the philanthropy of established donors who are
already giving to their chosen causes and organisations. The Foundation will not
compete with initiatives such as the Community Chest, as the Foundation is
targeting persons who are prepared to make significant donations, and who one
day may go on to set up their own foundation.”

9 The Government will support the Community Foundation by providing the

start-up and administrative costs of the Foundation for a period of time, up to
$10million, to help kick-start this initiative.

10 The Community Foundation of Singapore will be set up in the later half of

2008. To build critical mass and disburse grants with greater impact, the
Foundation will begin grantmaking when it has secured its first $50 million
(including pledges). Those who are interested in the Community
Foundation may contact Ms Yap Xiu Ling NVPC (Tel: 65509581 or email
xiuling@nvpc.org.sg).

ISSUED BY

MINISTRY OF COMMUNITY DEVELOPMENT, YOUTH AND SPORTS &

NATIONAL VOLUNTEER & PHILANTHROPY CENTRE

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Enclosed attachments:

• Frequently asked questions and references for Community Foundations

overseas
• Example of benefits provided by the Community Foundation

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 COMMUNITY FOUNDATION
FREQUENTLY ASKED QUESTIONS

A. CONCEPT OF COMMUNITY FOUNDATION

1. Why is there a need for the Community Foundation?

The Community Foundation fills a gap in our philanthropic landscape. Currently,

the established wealthy have the means to set up family foundations, but there
are limited options for others who want to donate proactively but are unable or do
not want to start their own foundations, as they may find the start-up and running
costs too high. By pooling funds, the Community Foundation will help them to
give in a strategic, sustained way.

Community Needs Met: The Community Foundation will draw the attention of
donors to pressing community needs, identify future community needs and,
during economic downturns, help to sustain non-profit programmes.

Donor Intent Achieved: Donors, who need advice on which sectors to support
and seek assurance that their donations will be well-spent by grantees, will be
able to get independent advice from the Community Foundation. It will liaise with
grantees and account to donors on how funds are used, with bigger donors
receiving customised stewardship reports.

Sustained Giving: Besides enabling donors to give in perpetuity, the Community

Foundation will also serve as an “incubator” of future foundations, where donors
who are not ready to start their own foundations, can learn grantmaking from the
Community Foundation, as precursor to running their own foundations.

Economies of Scale: As funds are pooled and served by a common secretariat,

donors will save on time and expenses. As the Community Foundation handles
the administration work for all donors, the costs incurred by donors are likely to
be much lower than if the donor were to set up his own foundation.

B. CAUSES SUPPORTED BY THE COMMUNITY FOUNDATION

2. Which causes will the Community Foundation support?

Donors will choose the causes to be supported. The Community Foundation will
advise donors on causes worth supporting. Examples of causes are the elderly,
children, disability, environment, arts etc.

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3. How will the Community Foundation source for causes to
recommend to its donors?

Community Foundation Board members will chair a committee for each cause/
sector it supports. Each committee will consult agencies with relevant institutional
knowledge, such as the Commissioner of Charity’s Sector Administrators, as well
as consider inputs from key non-profit individuals who sit on the various
committees of the Community Foundation.

The committees will advise donors on worthy projects to support, but donors
have the final say over which causes to support, and the quantum of support.

4. Will all nonprofits have an equal chance of receiving funding? Or will

the Community Foundation’s funding be based on pressing needs (e.g. the
social service sector that benefits the needy) as opposed to sectors often
perceived to be less pressing (e.g. the arts and heritage sectors)?

Donors will have the final say over which causes to support. The Community
Foundation will only facilitate their giving. If many of the donors prefer to give to,
for example, the social services, then the Community Foundation’s grant
disbursements will reflect their intent.

C. OPERATIONALISING THE COMMUNITY FOUNDATION

5. Who are the target donors?

The target donors are mainly high net worth individuals (HNWI), especially new
donors who are undecided in their philanthropic plans.

Besides individuals, the Foundation also welcomes donations from groups (e.g. a
couple, siblings or an alumni group) and other foundations. In the initial phase,
the Foundation is seeking donations of $1 million and above. Such donations will
enjoy naming rights, if the donors desire them.

However, for smaller sums, the Community Foundation will act as an aggregator
and facilitator.

6. How will the funds be raised?

NVPC will contact potential donors individually and through selected events,
rather than engage in public fundraising. Those who are interested may contact
NVPC with their pledges.

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7. How can nonprofits and charities apply for Community Foundation
grants?

Prior to the formation of fund committees, nonprofits may express their interest to
NVPC. Details are currently being worked out and will be announced once they
are finalised. Interested parties can contact:

Ms Yap Xiu Ling

Senior Executive, Sector Development, NVPC
DID : 6550 9581
Email : xiuling@nvpc.org.sg

Ms Dora Yip
Manager, Corporate Communications, NVPC
DID : 6550 9563
Email : dora@nvpc.org.sg

8. What avenues exist for the average man-on-the-street who wishes to

look beyond small, one-time donations into more impactful philanthropy?

There are many worthy causes and organisations which people can donate
directly to. People may also donate to the Community Chest or use NVPC’s
eMatch online system to search for donation requests of organisations in need of
funds.

http://www.comchest.org.sg/ncss/donate/comchest_home.asp

http://www1.nvpc.org.sg/npo/ematch/

9. Will the Foundation have charitable and IPC status? Will donations
to the Community Foundation be tax-deductible?

The Community Foundation will apply for charitable and Institution of a Public
Character (IPC) status, which will allow it to issue tax-deductible receipts to
donors.

10. How will its operations be funded?

The Community Foundation will be self-sustaining as it can charge a fee for its
services. The government will also help to cover some costs.

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11. What checks will be put in place to ensure that the funds will be
disbursed properly and in a transparent manner?

The Community Foundation will be governed by a Board of Trustees that will

safeguard the Community Foundation’s endowment.2 The Community
Foundation will comply with the advanced tier of the Code of Governance for
IPCs, which is the most stringent requirements for large IPCs with receipts of at
least $10m.

Internal control procedures will also be established within the Community

Foundation’s Memorandum and Articles of Association. The Board of Trustees’
approval will be required for the disbursement of funds not restricted by donors to
any particular cause.

12. Will funds raised be “locked up” i.e. endowment-type or drawn-down

over time?

The Community Foundation is founded on the overriding principle of honouring

donors’ intent. Hence, the donor will decide whether he/she wants to have an
endowment-type fund, where only investment income will be disbursed, or to
draw down the donation over time.

13. Who is responsible for the managing the funds for returns?

The Community Foundation will outsource the fund management to a panel of

pre-selected wealth management institutions experienced in private banking and
philanthropy services. This is to ensure that a critical mass of funds is pooled
together to enjoy lower fund management fees. Donors will have the final choice
of fund manager from this panel.

D. EXAMPLES OF COMMUNITY FOUNDATIONS

Though fewer than private family and corporate foundations3, the number of
community foundations grew rapidly in the US in the 1990s. In 2003, there were
645 community foundations, with total combined net assets of US$34.9bn. The

2
The trustees have not yet been nominated for appointment.
3
National Center for Charitable Statistics. Number of Nonprofit Organizations in the United
States, 1996-2006. Retrieved 13 Feb 2008 from
http://nccsdataweb.urban.org/PubApps/profile1.php?state=US

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number of community foundations has also grown in Canada and the United
Kingdom.4

The model for the Community Foundation in Singapore was adapted from
overseas models to suit the Singapore context and our needs.

Below are the websites of some of the larger community foundations overseas.

1. Silicon Valley Community Foundation

http://www.siliconvalleycf.org/about.html

2. San Francisco Foundation

http://www.sff.org/

3. Community Foundations
http://www.communityfoundations.net/

4
Worldwide Initiative for Grantmaker Support (WINGS) 2005 Community Foundation Status
Report. (2005) Retrieved 13 Feb 08 from http://www.wingsweb.org/download/GSR2005_p1a.pdf.

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Illustration of the Benefits to be Provided by the Community Foundation.

1. The professional staff of the Community Foundation will help donors

strategise their giving to enable efficiency and sustainability in their giving.

2. When an individual is interested in making a gift to charities and/or non-

profit originations through the Community Foundation of Singapore, the
staff of the Community Foundation will provide professional philanthropic
services such as advice on the local community needs and grantmaking
opportunities to charities and non-profit organisations, advice on the
various types of funds (e.g. Donor-Advised Fund, Unrestricted Fund,
pooled Fund), the investment options, tax benefits, the fees that may be
charged, etc.

3. For example, Mr Lee makes a gift of $10 million to the Community

Foundation, for the benefit of the charitable and non-profit sectors. Mr Lee
will enjoy a double-tax deduction for his donation as permitted, as the
Community Foundation will be a registered Institution of a Public
Character (IPC). He will pay a small annual fee to the Community
Foundation for managing his gift.

4. Mr Lee can decide between a Dedicated Fund and a Pooled Fund for his
$10m donation:

Dedicated Fund

a. If Mr Lee wishes to support specific causes and/or organisations

through his gift, his donation will be set up as a separate fund within
the Community Foundation. Mr Lee can further decide to either direct
the grantmaking to specific causes and organisations (Donor-Advised),
or let the Community Foundation make the grantmaking decisions on
his behalf (Unrestricted Fund).

b. Professional fund managers will invest and manage the funds. He will
be periodically informed of the returns on the investment of his funds.
Mr Lee will also receive detailed reports on the grantmaking activities
of the Dedicated Fund and the projects supported, at least once a
year.

c. For Donor-Advised Funds, the Community Foundation will provide

advice to donors on their grantmaking decisions, by shortlisting viable
projects that need support.

d. Mr Lee can also specify if his gift should be an endowment with only
the interest being disbursed to causes/organisations, or if his capital
sum can also be drawn down over a period of time.

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 e. For donors who wish to create a legacy, the Community Foundation
provides donors who donate at least $1m the option of naming their
Dedicated Fund, e.g. The Lee Fund. The named fund will be reflected
as a separate item in the annual report published by the Community
Foundation. The grantmaking to beneficiaries will be in the name of
the donor, facilitated by the Community Foundation.

f. Mr Lee can nominate an individual(s) to direct the grantmaking to

continue his legacy.

Pooled Fund

a. If Mr Lee chooses to make a gift but does not wish to set up a separate
fund or direct the use of his gift, his gift will go towards a Pooled Fund.
The Board of the Community Foundation will decide on the use of such
funds in the Pooled Fund. The Board will be supported by Sub-
Committees which will make their recommendations to the Board on
what causes/organisations the Pooled Fund can support. Mr Lee will
receive a report annually on how the Pooled Fund has been applied.

5. Should Mr Lee, given the experience of grantmaking through the

Community Foundation, decide on setting up his own family foundation,
the Community Foundation will provide consultancy services and/or offer
secretariat services to the family foundation.

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