3 Ways You Can Donate Your Assets To Charity In Singapore
Here's a guide on bequeathing your assets to a charity when you die
From Facebook founder Mark Zuckerberg joining the Giving Pledge in 2010, to billionaire Warren Buffett’s promise to give away more than 99% of his wealth, the world’s richest men have in recent years pledged to give away their wealth to philanthropic causes.
Though you may not have billions to give away, you can still do your part for the community and give your assets to charitable causes upon your death. There are several ways to do so, depending on your needs and preferences.
The three most common legal structures in Singapore for non-profit entities are:
Societies
Public companies limited by guarantee
Charitable trusts
Generally, societies refer to any club, company, partnership or association of ten or more persons, regardless of its nature or object (see section 2 of the Societies Act). Societies are required to be registered under Singapore law, though it is not considered to be a separate legal entity. This means that members of the society are personally liable should the society be sued.
Unlike societies, public companies limited by guarantee is a separate legal entity with limited liability. A public company limited by guarantee is usually used by a non-profit organisation that requires corporate status.
Lastly for charitable trusts, the arrangement is set out in a deed of trust where trustees would be responsible for administering your assets in accordance to the charitable intentions as set out in the trust deed. A charitable trust is also not considered a separate legal entity.
Each of the above legal structures has its own requirements and characteristics, and a helpful comparison can be found at the Pro Bono Services Office (PBSO) website.
The procedures for setting up each of the above legal structures differ, though the general steps you should take note of are as follows:
If registration is required, have the requisite information and supporting documents on hand
Register your non-profit entity with the relevant authorities
Apply for charity status
Apply for Institute of Public Character (IPC) status (not applicable for charitable trusts)
For more detailed information, please refer to PBSO’s website here.
The above is a non-exhaustive list of factors you can contemplate in deciding whether setting up a non-profit entity is a viable option.
Since it might not be cost effective to set up your own charitable organisation, another alternative would be to bequest it to a foundation that can disburse your funds in accordance to the community’s needs. This means that your funds may be disbursed across a variety of charitable organisations.
For instance, the Community Foundation of Singapore (CFS) pools donated funds and works together with donors to match their interests with the community’s underfunded needs.
Thus, in order to maximise the effect of your donations, you may wish to have a discussion with the foundation to identify if there are any specific societal needs that are currently underfunded or unmet that your donations can contribute to. This is to allow your donated funds to be utilised more effectively and efficiently upon your demise.
There are however, pros and cons of bequeathing your funds to a foundation. Some of these pros and cons are listed in the table above.