As part of Singapore's continued push to establish itself as a philanthropic hub, there have been major changes to Singapore's regulatory regimes for charities. Whether you are a:
- prospective or recurrent donor;
- an aspiring philanthropist or individual who wishes to make a change;
- a corporate such as a family office or foreign entity who wishes to contribute to Singapore and the region; or
- a Singapore registered charity, grantmaker or institution of public character,
this article aims to bring you up to speed with the major changes that 2024 brings.
Revision to the Guidance on the Regulation of Grantmakers
In November 2023, the Commissioner of Charities (CoC) announced revised Guidance on the Regulation of Grantmakers, which have taken effect as of 1 January 2024 (Revised Grantmaker Guidelines). This is the first time since the introduction of the lighter-touch regulatory regime in 2007 that the Guidance on Regulation of Grantmakers has been revised.
Grantmakers are typically non-profit entities such as private family or corporate foundations or businesses' giving programs. Unlike other traditional registered charities, grantmakers are limited to giving out grant monies to specific charitable causes.
Key highlights include:
- Grantmakers are now expressly permitted under the revised guidelines to carry out non-grantmaking activities limited to 10% of the grantmaking activities subject to certain safeguards
| Examples of Non-Grantmaking Activities (including activities incidental to grantmaking) | Safeguards |
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- Grantmakers are now expressly permitted under the revised guidelines to disburse funds through non-grant instruments limited to 10% of the grantmaker's activities:
| Examples of Non-Grant Instruments | Safeguards |
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- Grantmakers are strongly encouraged to actively carry out disbursement of grants and funds, in furtherance of their charitable objects, within three to five years from receipt of the funds.
Launch of the Philanthropy Tax Incentive Scheme (PTIS)
Another change that has come into effect from 1 January 2024 is the Philanthropy Tax Incentive Scheme (PTIS) for family offices. In summary, PTIS allows for qualifying donors in Singapore to be eligible to claim 100% tax deductions (capped at 40% of the donor's Singapore statutory income) for overseas donations made through qualifying local intermediaries.
If you are a family office seeking to set up your own charitable entity (for instance, a grantmaker) you may be able to benefit from the PTIS.
Dentons Rodyk had previously published an article introducing the specifics of the PTIS. You can find out more about the PTIS here.
Launch of Charity Compliance Indicators for all IPCs from 16 January 2024
As announced on 27 November 2023, the CoC has announced that Charity Compliance Indicators will be required for all institutions of public character (IPCs). These compliance indicators will take effect from 16 January 2024 and for the time being, will only involve IPCs.
The intention of such a change is to assist donors in making informed philanthropic decisions by allowing donors to see where a charity stands in terms of regulatory compliance and the adoption of best practices.
The indicators which comprise of the following key information will be featured on each IPC's profile on the charity portal with effect from 16 January 2024
- Charity transparency/Charity governance awards received by the IPC in the recent 3 years
- Fund-raising expense ratio for the IPC in the IPC's latest Financial Year
- Level of compliance with the Code of Governance for charities and IPCs and
- Submission status of the IPC's regulatory submissions for the latest Financial Year
Fields (b) and (d) will be populated automatically based on the IPC's latest annual submission.
A mock-up of the compliance indicators is available here.
Revised Code of Governance for Charities
As announced on 4 April 2023, the Charity Council published the revised Code of Governance for Charities. The revised Code of Governance has taken effect as of 1 January 2024. These revisions aim to raise the standards of governance in the charity sector and in turn help to develop Singapore into a philanthropic hub by instilling confidence in Singaporeans to give and support charities.
Dentons Rodyk had previously published an article regarding the revisions made to the Code of Governance for Charities. If you would like to find out more, you can do so here.
Additional guidance on strengthening charities against money-laundering risks can also be found in our article here.
Concluding Remarks
The changes which take effect in January 2024 help further strengthen Singapore's continued push to establish itself as a philanthropic hub. Players in the philanthropy space should take note and see if the changes would be relevant to them. This may involve assessing if they may be able to take advantage of any changes as well as reviewing of internal policies to strengthen and ensure compliance.
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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
