Singapore is loosening rules for private and community foundations, allowing them to go beyond the remit of giving grants.  

A new set of rules, called the Guidance on Regulation of Grantmakers, foundations will be allowed to undertake research, serve beneficiaries directly, and issue both loans and social impact bonds. 

Philanthropists provide funding to charities with those bonds, aimed at creating both social impact and passing a return to investors.  

According to the Strait Times, however, non-grantmaking activities are limited to 10 per cent of total activities for foundations.  

Foundations and grant makers must meet a set of criteria to qualify for the relaxed guidelines. They can only be registered as a non-profit or a non-governmental organisation, and solely funded by an individual, family or institution. 

They are also unable to be registered as an Institution of a Public Character, which refers to a charity that is allowed to collect tax-deductible donations. 

“These changes, in our view, help to promote the good work of grantmakers, giving them a little bit of flexibility… but still fundamentally maintaining a core principle of transparency, governance, and a strong sense of accountability,” said Edwin Tong, Singapore’s minister for culture, community and youth.  

Lee Meng Tat, chairman of the Singapore Cancer Society, told Strait Times that it is increasingly “not just giving the money; it’s about doing something that makes a difference”.   

He added: “So I think giving grant makers more leeway in terms of how to finance it, such as by offering bonds, could be more innovative, provide a more sustained form of provisions over the years, and also target funding to programmes that will make a big impact.” 

The new rules come into effect on 1 January 2024.  

Singapore has long been vying to become a central hub for Asian philanthropy. This year, multiple organisations have been launched.  

Philanthropy Asia Alliance (PAA), a new organisation launched to tackle environmental and social challenges, pledged more than $1 billion Singaporean dollars (US $777 million). 

The Temasek Trust, based in Singapore, announced the launch at the 3rd Philanthropy Asia Summit in September. 

The Asia Centre for Changemakers, by PAA and Temasek Trust, was also launched. 

Shafi Musaddique is news editor at Alliance magazine.