Arts and heritage charities which receive over $300,000 per year from the $200 million Cultural Matching Fund (CMF) - which matches private cash donations dollar-for-dollar - will be required to use the grant for initiatives aimed at driving long-term sustainability.

This could mean enhancing the organisation's capabilities, acquiring artworks for the enjoyment of the general public as well as developing or upgrading cultural infrastructure.

However, for the first $300,000 in funding from the CMF, organisations will be given the flexibility to decide where to channel that money.

The framework is meant to meet the differing needs of players both big and small, while striking a balance between funding day-to-day expenses and long-term sustainability.

The CMF - which aims to encourage more donations from companies, foundations and individuals for the cultural sector - will take into account donations made from yesterday (Nov 1), with two application periods each year in March and September. No minimum donation is required as all cash donations will be matched by the government through the CMF.

Designed to be flexible, sustainable as well as accountable, the CMF was established after lengthy consultations with donors, the public and cultural groups. It will be open to all arts and heritage charities and Institutes of Public Character (IPC) that have a basic accountability framework.

Over 100 cultural organisations are expected to benefit from the fund, ranging from arts groups, heritage and visual arts museums to arts venue operators and arts education institutions.

Another perk to donating to an arts and heritage IPC is the 250 per cent tax deduction, based on the amount donated.

"I hope the CMF will grow a sense of shared ownership among all of us in contributing to our arts and heritage landscape," said Lawrence Wong, Acting Minister for Culture, Community and Youth. "As more step forward to be involved in our cultural development, I believe it will spark even more creative works that Singaporeans can identify with, and take pride in."

Currently, only 2 per cent - or some $30 million to $40 million per year - of total donations is received by arts and heritage institutions.

"The CMF will help plug a critical gap as there are few funders for direct operational costs," pointed out Josephine Tan, director of development at the Intercultural Theatre Institute (ITI). "For arts institutions like ITI, this means we can accelerate plans to develop new programmes and establish an endowment."

Meanwhile, to ensure that the CMF is divided fairly across the entire sector and not restricted to a certain organisations, a $10 million cap per organisation will be implemented for the lifetime of the CMF.

First announced during Budget 2013 in March, the CMF is expected to be drawn down in a period of five to seven years. The Ministry of of Culture, Community and Youth also plans to review it in one to two years' time to see if the framework needs tweaking.

Applications are to be submitted to either the National Arts Council or the National Heritage Board, depending on the organisation. Disbursements from the fund will commence from mid-2014