To be called the Community Foundation of Singapore, it will be set up by the National Volunteer and Philanthropy Centre.

Announcing this in Parliament yesterday, Minister for Community Development, Youth and Sports Vivian Balakrishnan said that the foundation would target the newly rich, who have yet to amass enough wealth to justify the administrative cost of starting their own foundations.

By pooling such funds, the Community Foundation will be able to reap 'economies of scale'. It will hire wealth managers to invest and grow the pool of money.

'In other words, it's kind of a starter kit for foundations. And we hope that once people get used to giving $1 million... $10 million, eventually when they become fabulously wealthy, they will decide to start their own foundations.'

Singapore has seen a surge in the number of millionaires.

As of last year, there were 67,000 individuals here with more than US$1 million (S$1.39 million) to their name. Among them, 928 had at least US$30 million each.

Those who contribute to the new foundation will have a say over where their money goes, said Dr Balakrishnan, adding that the Government will show its support by sponsoring the foundation's start-up and administrative costs, up to a cap of $10 million.

The Foundation will start making grants once its kitty reaches $50 million.