(Tentative)

　　Article 1: The SHCDF establishes this Method according to the Donation Law for Public Welfare of the People's Republic of China, the Fund Management Method of the SHCDF, other related regulations and the Charter of the SHCDF.

　　Article 2: Funds of the SHCDF are legal property of public, nonprofit community, and cannot be directly or indirectly paid or transferred to any members of the SHCDF. No units or individuals are permitted to embezzle the funds.

　　Article 3: Funds of the SHCDF are mainly used to:

　　(1)Grant public culture. Grant those exemplary, ethical, classical and international cultural programs as well as construction of public cultural facilities and protection of cultural heritage.

　　(2)Promote cultural innovation. Grant those original, innovative, explorative and experimental cultural programs.

　　(3)Foster cultural talents. Grant the cultivation of new cultural talents, introduction of and advanced studies for culture and art talents.

　　(4)Advance cultural exchanges. Grant those domestic and foreign cultural exchange programs, which can help enhance the standard of cultural and artistic performance in Shanghai and aggrandize Shanghai's cultural influence.

　　(5)Facilitate communications among foundations. Undertake the commissioning of other foundations at home and abroad, handle relevant cultural affairs, develop reciprocal cultural collaborations and exchanges.

　　Article 4: The utilization of the funds must meet the lawful regulations, related state policies for cultural support and development and the Charter of the SHCDF.

　　Article 5: The utilization of the funds must follow the principle of making both ends meet and insuring the principal.

　　Article 6: Funds of the SHCDF can be deposited in financial organs, or used to purchase securities, but venture investment is forbidden.

　　Article 7: The interest and security income of the funds of the SHCDF can be used to enlarge the fund base of the SHCDF and to meet daily costs of the SHCDF pro rata. Specific allocation proportion will be decided by the Council.

　　Article 8: Daily costs of the Foundation and expenditures of its employees cannot be forked out of the principal of the funds, but only to be paid proportionally out of the value increment generated from the operation of the funds. If the employment of the principal is deemed necessary, it must be authorized by the Council of the SHCDF.

　　Article 9: The funds of the SHCDF implements independent system of accounting, establishes independent bank account and manages the fund account affairs strictly according to related state regulations, and entrusts the accountant office to examine and superintend the financial affairs of the SHCDF.

　　Article 10: As to the utilization and management of the funds, the SHCDF accepts the auditing, supervision of the governmental supervisory authority and submits reports on the inflow to and outflow from the funds according to regulations. After auditing at the end of the fiscal year, the SHCDF submits the final account report to the Council for examination and approval, and reports to the governmental supervisory authority.

　　Article 11: Every year, the SHCDF regularly releases the income and expenditures of the Foundation to the public and accepts the supervision from all circles.