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Donor-advised funds can make a meaningful impact in Asia
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Donor-advised funds can make a meaningful impact in Asia

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Such funds give donors more say in the philanthropic process, and can lead to donors being tipped off about underfunded causes. These funds also make it possible for non-millionaires to do their bit.

WHAT do Jack Dorsey, Larry Page, Elon Musk, Jack Ma and Mark Zuckerberg have in common in terms of their charitable giving?

All of them have used donor-advised funds (DAFs) in short. DAFs are popular in the United States, with over US$140 billion sitting in these accounts. In Asia, DAFs are relatively new with only Singapore, China, South Korea and Japan setting them up.

What exactly is it? In a DAF, the donor transfers money or other assets to another entity called the sponsoring organisation. While the sponsor legally owns the assets, the donor is given a huge say in determining when the fund is disbursed and causes to support, hence the name “donor-advised funds”. Typically, the sponsoring organisation will provide advisory services to the donor on how to effectively utilise the funds.

At this juncture, a reader may ask what is the difference between a DAF and an organisation like the Community Chest in Singapore, which raises funds for multiple charities?

The major distinction is the role of the donor in the DAF, as compared to the donor making an outright contribution to charity. In a DAF, the donor is an active participant, working in collaboration with the sponsoring organisation, in disbursing funds.

Let us say, we have a philanthropist who wants to make a S$1 million contribution to educational causes. While S$1 million is certainly a lot of money, it is insufficient to set up a private foundation due to the administrative costs involved. A donor who uses a DAF may direct the funds to support worthwhile causes in education, while being properly advised.

In many cases, the donor is a wealthy person who may not be familiar with what is happening on the ground. Therefore, the sponsoring organisation adds value by providing advisory services.

In this example, the sponsoring organisation may, after doing due diligence, recommend that the donor disburse funds to underfunded causes like pre-school, technical and special-needs education.

DAFs can also function as an emergency fund for a “rainy day”. For instance, there could be an emergency societal need like children living under Covid-19 lockdown conditions, who are now deprived of sponsored school lunches. Money from DAFs could then be channelled to fund food vouchers for their families during home-based learning.

In fact, this was the cause championed by The Recess@Home programme spearheaded by the Community Foundation of Singapore, a DAF.

BENEFITS OF DONOR-ADVISED FUNDS

A DAF is attractive to donors because of the many benefits it offers.

First, the DAF gives the donor a greater role in the philanthropic process. This sense of satisfaction that the donors get may encourage them to give more to charities in future and set up a private foundation. In fact, in setting up the first DAF in Singapore in 2008, then Minister for Community Development, Youth and Sports, Vivian Balakrishnan, described it as a “starter kit for foundations”.

Second, the donor is supported by DAF sponsors, who are intimately aware of the needs of the community. Therefore, the funds can support the causes that are desperately in need.

Third, the DAF, if properly used, may achieve maximum impact by making contributions to underfunded areas. Fourth, the donation to a DAF need not be a cash gift, but may take the form of company shares or other non-cash assets. Finally, some countries provide requisite tax breaks to donations to DAFs.

The biggest advantage of the DAF is democratisation of philanthropy from the ultra-high net worth families to individuals who have a modest sum to donate. A heart-warming example is the story of the late Kim Gun-Ja, who set up a fund with the Beautiful Foundation, a South Korean DAF. Ms Kim, a sex slave under Japanese rule, donated all her assets save for funeral costs to set up the Grandmother Kim Gun-Ja Fund to support college tuition for orphans. In Singapore, a DAF may be set up with a minimum sum of S$200,000.

Recently, DAFs have come under trenchant criticism in the United States; some quarters have called it a form of “zombie” philanthropy. The main critique is that donors enjoy tax breaks while disbursing too little to charities. Some have called for a law that mandates the DAF to pay out a certain percentage annually. While this criticism of DAFs is legitimate in the United States, it may not apply to DAFs in Asia, where tax breaks are not the primary motivations behind philanthropic giving.

DAFS IN SINGAPORE

There is anecdotal evidence, at least in Singapore, that the level of disbursements to charities is quite high. For example, the two DAFs in Singapore, the Community Foundation of Singapore and SymAsia Foundation Limited, show a high payout rate to charities. The Community Foundation of Singapore has collected S$192 million and disbursed S$114 million in grants. SymAsia Foundation Limited stated in its 2020 annual report that it collected S$170 million and disbursed S$120 million. In fact, donors are conscious that they ought to disburse more to charities.

RISING PAYOUTS DURING THE PANDEMIC

There is currently a campaign in the United States called #HalfMyDAF, where donors are committing to granting half of the money sitting in their DAFs to charities. During this pandemic, there are reports in the United States that payouts from DAFs to charities have indeed been higher, even as critics push for the payouts to be even more accelerated. In contrast to the cautious and structured giving inherent in DAFs, there is McKenzie Scott, ex-wife of Jeff Bezos, who upended the philanthropic world by donating US$6 billion in 2020.

With proper governance, DAFs yield a net-positive over the Asian philanthropic space, compared to an informal channel of giving that relies on one’s family and business contacts. A DAF provides a structured and cost-efficient vehicle that democratises philanthropy and identifies societal needs that are underfunded. It is hoped that there would be more properly governed Asian DAFs set up, with high payout rates to charities to tackle difficult domestic and pressing transnational problems of our time, like climate change.

To find out about donor-advised funds, read more about it here.

This article is written by Professor Tang Hang Wu, CFS Board Committee Member and a professor of Law at the Yong Pung How School of Law, Singapore Management University.

This translated article was originally published by The Business Times.  

Credit: The Business Times © Singapore Press Holdings Limited. Permission required for reproduction.  

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A Call for Collaborative Giving: Closing the Gap for Disadvantaged Young Persons

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The first Colabs publication discusses the challenges that disadvantaged young persons face at home, such as an unconducive family environment. It examines how these challenges impacted the young persons’ educational attainment and social mobility, and offers suggestions as to how givers could collaborate to close the gap for these individuals. The publication, based on the collective insights of over 100 participants who contributed during the series, can be downloaded here.

Speaking after the association’s annual general meeting at Kallang Netball Centre on Friday, Liang-Lin, a fund manager for a US$7 billion (S$9.5 billion) firm focused on green real estate investments in Asia, hopes to bring her expertise to the table and increase the amount of financial support for Singapore netball during her four-year term.

The 53-year-old took over from Deputy Speaker of Parliament Jessica Tan, who has been the association’s president since 2012. Tan had reached the end of her tenure, which saw the national team make several breakthroughs, including a gold medal at the 2015 SEA Games in Singapore.

Liang-Lin holds various appointments such as being Singapore’s representative to the G20 for Women appointed by the Ministry of Finance. She is also a board member of the Community Foundation of Singapore, which promotes philanthropy through facilitating the establishment of charitable funds.

She said: “One of the things that is overlooked when we look at philanthropy and fundraising is that sport is not really part of the things that people will automatically think about.

“Less than one per cent of the funds that we raise in the Community Foundation goes to sport. The values that sport brings need to be amplified more, so that corporates… see the need to support sport. I think that link needs to be stronger so that we get not just more corporate sponsors, but also they can come in for longer periods of time.”

While national agency Sport Singapore provides funding to netball, corporates can also do their part, she added.

She said: “If we play our cards correctly, we can get corporates to come in and hopefully support them, to see the wider purpose of sport and bring the nation together.”

She also hopes the association can be proactive in looking for financial support, adding: “We must work more strategically with governing bodies on educating corporates on the importance of really supporting sport.”

The former netball player also made references to the recent Women’s World Cup for football, noting the “ability for a game that focuses on women in the sport to bring global attention”.

She said: “I want that kind of trajectory of the limelight going to women’s sport. I think that is a trend that will continue, and I hope that netball will be part of that trend.”

Meanwhile, Tan was satisfied that she has achieved the three objectives she had set out to do when she came on board – to improve quality of play, build a fan base and create an ecosystem which involves coaches and players.

The 57-year-old added: “As much as I do feel sad about having to step down, but at the same time, leadership renewal is very important.

“I think Trina will help to galvanise the team together, and bring a lot of new perspectives and quality to the association.”

Join us in making an impact on Singapore sports scene! Reach out to us for more information.

Source: The Straits Times © SPH Media Limited. Permission required for reproduction

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The competition was organised by City Harvest Community Services Association and received support from FUN! Fund, a Community Impact Fund jointly established by the Community Foundation of Singapore and the Agency for Integrated Care, with the aim of addressing social isolation among the elderly.

Senior Minister of State, Ministry of Communications and Information & Ministry of National Development Mr Tan Kiat How attended the event. He encouraged the elderly to stay physically and mentally well, as well as urging them to participate in community activities and enjoy their golden years together.

Learn more about FUN! Fund at https://www.cf.org.sg/fun-fund/.

 

The programme provides the children with a non-threatening platform to connect with peers and have positive conversations. In addition, it exposes them to different people who can assist to broaden their perspectives.

L.S., a volunteer with the Reading Odyssey programme @ Spooner Road

中心“常胜将军”胡锦盛:比赛限时反应要快

现年92岁的胡锦盛是最年长的参赛者。自2017年退休后,他几乎每天都到活跃乐龄中心报到,从此爱上了玩拉密,每次可玩上三个小时,在中心是“常胜将军”。

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Law firm Rajah & Tann donates $225k to ST School Pocket Money Fund and Dementia Singapore

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a group of people holding a large check

(From left) Dementia Singapore’s chief executive Jason Foo, ST Singapore editor Zakir Hussain, Community Foundation of Singapore chief executive Catherine Loh, R&T managing partner Patrick Ang and R&T Foundation chairperson Rebecca Chew.

Law firm Rajah & Tann (R&T) has contributed $225,000 to The Straits Times School Pocket Money Fund (STSPMF).

The donation was part of the firm’s 45th anniversary celebration on Thursday (May 5) at the Ritz-Carlton, Millenia Singapore, where it also gave $225,000 to charity Dementia Singapore.

Mr Zakir Hussain, a board trustee of STSPMF and ST’s Singapore editor, and Dementia Singapore chief executive Jason Foo jointly received a cheque from R&T managing partner Patrick Ang and Rajah & Tann Foundation chairman Rebecca Chew.

Mr Ang said: “The spirit of caring and giving back to society is part of R&T’s DNA, which we inherited from our founders T. T. Rajah and Tann Wee Tiong.”

A commemorative book about Rajah & Tann titled Duty of Care+ was also unveiled during the celebration on Thursday.

Written by former ST senior writer Cheong Suk-Wai, the book traces the law firm’s growth from its beginnings as a two-man partnership to the regional firm it is today.

“The Rajah & Tann story is essentially about how a group of talented lawyers came together to build a top-rated indigenous Singapore law firm, while holding fast to the principle of excellence with heart in the way they practised law and cared for others,” said Mr Ang.

Among Rajah & Tann’s notable alumni are T.T. Rajah’s son V. K. Rajah, who was Attorney-General from 2014 to 2017 and a former Judge of Appeal; Chief Justice Sundaresh Menon; former Attorney-General and current Judge of Appeal Justice Steven Chong; and current Judge of the Appellate Division Justice Quentin Loh.

STSPMF general manager Tan Bee Heong said the fund gave out almost $9 million to help more than 12,000 beneficiaries last year.

“This donation will help us continue our work in providing thousands of students from low-income families with school pocket money for meals and other schooling needs,” she added.

The STSPMF was started in 2000 as a community project by ST to help children from low-income families.

It has given out nearly $90 million to date and has helped more than 200,000 beneficiaries.

This article was originally published in The Straits Times hereSource: The Straits Times © SPH Media Limited. Permission required for reproduction.

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The Straits Times: Legacy of giving lives on

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In his final year as president, Mr S R Nathan – together with a few of his close friends – started discussing with me the idea of starting a philanthropic fund to help “uplift” children from poor families.

Coinciding with the launch of Mr Nathan’s memoir An Unexpected Journey: Path To The Presidency in 2011, the S R Nathan Education Upliftment Fund was established to provide financial support to disadvantaged young people by helping them complete their education.

Despite Mr Nathan’s initial reluctance on naming the fund after himself (the humble and unassuming man that he was), we were glad he eventually relented, as it would help promote the concept of community ownership and inspire others to do the same.

Administered by the Community Foundation of Singapore, the fund has since supported close to 1,000 Institute of Technical Education, polytechnic and university students by providing them bursaries, scholarships and monthly financial assistance.

The fund resonated with Mr Nathan’s beliefs and conviction about giving and receiving kindness, which we witnessed first-hand while working with him to manage the grants.

He was always involved and would make time to meet the many recipients – getting to know them and their families. He would even follow up by sending handwritten notes of thanks and encouragement.

Mr Nathan has touched many young lives through this fund. His death leaves a void, but his legacy of giving lives on. I hope that in time to come, those whom he has helped will do the same by reaching out to help others.

Laurence Lien Tsung Chern
Chairman
Community Foundation of Singapore

Link to story: http://www.straitstimes.com/forum/letters-in-print/legacy-of-giving-lives-on

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Stories Of Impact

HOME: Helping vulnerable migrant workers through crisis

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A woman gracefully holds a box of vibrant flowers, standing before a neatly arranged bunk bed.

With almost one million low-wage migrant workers in Singapore, there is an increasing appreciation of the important role they play in our society. Yet, while migrant workers make up a significant part of our social fabric, their issues and challenges may often remain invisible from public view.

Since 2004, the Humanitarian Organisation for Migration Economics (HOME) has been aiding migrant workers in crisis situations. These workers have often suffered exploitation and abuse ranging from overwork, injury, wage theft to physical and emotional abuse. HOME supports around 2000 non-domestic workers and domestic workers each year.

“Many of the workers who come to us are already quite traumatised,” says Sheena Kanwar, Executive Director of HOME, “It is quite a journey for them: from making the decision to come here, receiving support, recovering from crisis and moving on with life.”

Support from donors to the Migrants Emergency Assistance and Support (MEANS) Fund, a community impact fund managed by the Community Foundation of Singapore (CFS), has helped HOME to provide immediate and short-term financial assistance to distressed workers. The financial support covers the basic necessities, medical care, transport and mobile phone top-ups. To date, the MEANS fund has disbursed around $60,000 to HOME.

Financial assistance is critical for these workers; many of them have no savings or have not been paid a salary for several months. If a worker decides to make a legal complaint against their employer, they may end up staying in Singapore for several years. “We help ensure there is a basic sum for their everyday well-being through this process, from food, transport to their medical needs,” says Sheena.

Beyond financial assistance, HOME has created “a sustainable system that allows us to respond to the different needs of a migrant worker in crisis,” explains Sheena. These services include help desks, legal, medical, and counselling teams, a shelter for vulnerable domestic workers, skill-building classes, to helping workers through re-employment. Moving forward, HOME looks to expand its reach, especially to vulnerable migrant workers from the Myanmar and Indian communities.

For these workers, HOME has opened a vital window of support – and even a new lease of life. Take Jofel, a domestic helper who has been living at HOME’s migrant worker shelter for over a year. After attending an art therapy class by the HOME Academy, Jofel stumbled upon her creative talent. She started to pursue her passion for handicraft, actively picking up skills online each day. Today, she is skilled at designing and producing a wide range of items, from bags, candles to flower bouquets. “I’m very grateful to HOME for its support. I discovered myself and my creative abilities here,” says Jopel. Upon her future return to her home country, Jopel hopes to start her own business.

Sheena is heartened by the surge of support amongst Singaporeans towards the plight of migrant workers; from enthusiastic young students who ask to join HOME’s projects, to HOME’s dedicated teams of legal, medical and counseling professionals. She says, “The support and empathy for migrant workers have gone up tremendously over the last five to seven years. It’s very heartening that people genuinely see the need for the work that we do.”

To support the MEANS Community Impact Fund, visit here

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The competition was organised by City Harvest Community Services Association and received support from FUN! Fund, a Community Impact Fund jointly established by the Community Foundation of Singapore and the Agency for Integrated Care, with the aim of addressing social isolation among the elderly.

Senior Minister of State, Ministry of Communications and Information & Ministry of National Development Mr Tan Kiat How attended the event. He encouraged the elderly to stay physically and mentally well, as well as urging them to participate in community activities and enjoy their golden years together.

Learn more about FUN! Fund at https://www.cf.org.sg/fun-fund/.

 

The programme provides the children with a non-threatening platform to connect with peers and have positive conversations. In addition, it exposes them to different people who can assist to broaden their perspectives.

L.S., a volunteer with the Reading Odyssey programme @ Spooner Road

中心“常胜将军”胡锦盛:比赛限时反应要快

现年92岁的胡锦盛是最年长的参赛者。自2017年退休后,他几乎每天都到活跃乐龄中心报到,从此爱上了玩拉密,每次可玩上三个小时,在中心是“常胜将军”。

Picture of admin bluecube
admin bluecube

Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry's standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book.

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