Shinhyup Social Contribution Foundation, Re-designated as a Public Interest Corporation

Yunsik Kim, President of the National Credit Union Federation of Korea (Chairman of the Credit Union Social Contribution Foundation)

[Asia Economy Reporter Kim Hyo-jin] The Shinhan Credit Union Social Contribution Foundation announced on the 29th that it has been designated as a public interest corporation (formerly a designated donation organization) by the Ministry of Strategy and Finance in accordance with the "2021 2nd Quarter Public Interest Corporation Designation and Change Notice."

This designation is the second received from the Ministry of Strategy and Finance since the foundation's initial designation as a public interest corporation (formerly designated donation organization, maintained for six years) at its establishment in 2015. It is the result of fulfilling all legal obligations as a public interest corporation over six years, recognized for its public interest based on various social contribution projects utilizing donations and transparent disclosure and publication of 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 Shinhan Credit Union Social Contribution Foundation can treat up to 10% of their corporate income as expenses, and individuals can receive a tax credit of 15% on 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 member benefits according to its articles of incorporation, and the direct beneficiaries of its projects must be an unspecified majority. For designation, in addition to the articles of incorporation and corporate establishment approval certificate, a business plan and budget for donation-based projects over the next five years, and reports on public interest activities must be submitted to the competent authority. The Minister of Strategy and Finance designates the corporation after 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 funded solely by donations from credit unions nationwide 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, and ▲ "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 primary 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. Notably, 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 transparent and fair donation collection, usage, and overall operations.

Since its establishment, the foundation has raised approximately 5 billion KRW annually through the voluntary participation of executives and employees of credit unions nationwide. As of the end of May, it has achieved cumulative donations of 40 billion KRW through the contributions of 652 credit unions and 9,745 executives and employees. This success is attributed to the foundation’s trust as the representative social contribution corporation of the credit unions and the confidence of their executives and employees.

Kim Yoon-sik, Chairman of the Foundation, said, "This re-designation as a public interest corporation is especially 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 credit union executives and employees nationwide. We will continue to practice transparent management by disclosing annual donation collection and utilization results, and strive to grow as a trusted foundation representing the credit unions’ social contribution efforts."