Charities in Singapore could be graded by next year to help donors narrow down and decide more easily which organisations to donate to.
Work is under way to design this new regulatory compliance indicator, and the aim is to roll it out on the www.charities.gov.sg charity portal by next year.
The initiative was announced by Senior Minister of State for Culture, Community and Youth Sim Ann yesterday.
She said her ministry is simplifying the process of searching for charities' information on the charity portal to help donors make informed choices.
"Each charity's profile page, starting with those that are Institutions of a Public Character (IPC), will feature information about how well the IPC is governed, for example, its level of regulatory compliance."
The new indicator is intended to reveal at a glance whether a charity has met the minimum 80 per cent compliance prescribed in the Code of Governance for Charities and IPCs, and whether the audit opinion in the independent auditor's report on the charity's financial statements has been qualified.
The Commissioner of Charities (COC) will be piloting this initiative with Singapore's 600 or so IPCs, which form a subset of the 2,277 registered charities as of end-2018.
IPCs are able to issue tax-deduction receipts for qualifying donations made to them, and are held to a higher standard in terms of both regulatory compliance and governance.
The COC said that this staged implementation approach will give other smaller charities more time to improve their governance and compliance.
Currently, the portal presents a charity's profile and track record across four tabs.
The COC will be conducting consultations with charities and members of the public in the second half of this year to glean feedback on how the data can be presented in a useful way.
In addition, a national initiative will be rolled out in the second half of the year to encourage legacy giving - the planned donation from a person's assets.
To make it more convenient for the public, the Community Foundation of Singapore will be introducing an online pledge system for such gifts. Currently, donors make pledges to the Community Foundation of Singapore in writing.
At present, some ways to donate to charity include adding a clause in an individual's will or nominating the Community Foundation of Singapore or another charity as the beneficiary of an insurance policy. Individuals can gift Central Provident Fund monies through a nomination as well.
The Community Foundation of Singapore noted that there is a general lack of awareness and established structure to support legacy giving in Singapore.
Since the Community Foundation of Singapore's inception 11 years ago, donors have donated more than $160 million, of which just about a third were contributions to legacy funds.
The foundation said legacy giving is more commonplace in countries such as the United Kingdom and the United States. For example, in 2018, British charities received more than £5 billion (S$9 billion) through gifts in wills and in-memory motivated giving.
Community Foundation of Singapore chief executive Catherine Loh said: "There are donors interested in making legacy gifts, but they want more knowledge to make informed choices. They want accountability for their gifts and trust is important before they are willing to donate."