Shinhyeop Social Contribution Foundation Designated as 'Public Interest Corporation' for the Second Time Since Establishment

Operating Donation Management and Supervision System Through Internal and External Audits Three Times a Year

[Asia Economy Reporter Kwangho Lee] The Shinhan Credit Union Social Contribution Foundation announced on the 29th that it has been designated as a public interest corporation by the Ministry of Strategy and Finance in accordance with the 2nd quarter 2021 public interest corporation designation and change notice.

This designation is the second designation received from the Ministry of Strategy and Finance since the foundation's initial designation as a public interest corporation at its establishment in 2015. It holds greater significance as the foundation has fulfilled all legal obligations as a public interest corporation for six years by conducting various social contribution projects using donations and transparently disclosing and publishing annual donation collection and usage.

With the re-designation as a public interest corporation, tax benefits for donors are also maintained. Corporations donating to the foundation can treat up to 10% of their corporate income as expenses, and individuals can receive a tax credit of 15% of their donations (30% for amounts exceeding 10 million KRW) within a 30% income limit.

According to the Enforcement Decree of the Corporate Tax Act, a public interest corporation must be a nonprofit corporation or social cooperative that uses income for public interest rather than members' benefits as stipulated in its articles of incorporation, and the direct beneficiaries of its projects must be unspecified many. For designation, in addition to the articles of incorporation and corporate establishment approval certificate, a business plan and budget for donation collection over the next five years, and a public interest activity report must be submitted to the competent authority. The Minister of Strategy and Finance designates the corporation through thorough verification and recommendation. The foundation is scheduled to operate as a public interest corporation for six years until the end of 2026.

The foundation operates as a donation cooperative run solely by donations from nationwide Shinhan Credit Unions and their executives and employees, promoting major projects such as ▲'Economic Movement' to revitalize social and regional economies ▲'Educational Movement' to support the healthy growth of children and adolescents and brighten society ▲'Ethical Movement' to care for marginalized groups in local communities.

Efforts to ensure management transparency of the foundation continue. More than 80% of annual revenue is directly used for its unique purpose projects, and donation operations are strictly managed and supervised through two internal audits and one external accounting audit annually. The results are disclosed every year through the National Tax Service and the foundation’s website.

In particular, last year, the foundation underwent an on-site audit conducted by the Ministry of the Interior and Safety targeting organizations registered for donation collection, verifying the overall transparency and fairness of donation collection, usage, and operation.

Since its establishment, the foundation has raised approximately 5 billion KRW annually through the voluntary participation of executives and employees of nationwide Shinhan Credit Unions. As of the end of May, it has achieved cumulative donations of 40 billion KRW through the sharing of 652 Shinhan Credit Unions and 9,745 executives and employees. This was possible because the foundation is trusted by Shinhan Credit Union executives and employees as a representative social contribution corporation of Shinhan Credit Unions.

Kim Yunsik, chairman of the foundation, said, "This re-designation as a public interest corporation is more meaningful as it recognizes the operation of various social contribution projects supporting local communities and socially vulnerable groups through the voluntary and active donations of executives and employees of nationwide Shinhan Credit Unions. We will continue to practice transparent management, including the disclosure of annual donation collection amounts and utilization performance."