“Charitable organizations seldom respond to donors’ requests for information about financial reports … so few donors have a clear understanding of what their money is used for and what effects it brings about,” said Deng Guosheng, an associate professor at Tsinghua University’s school of public policy and management.
The situation has resulted in serious problems when it comes to supervising grassroots charities and non-governmental organizations (NGOs), and threatens to undermine the growing charitable spirit among the Chinese, he said.
Following the 2008 earthquake in Sichuan province, the nation raised record amounts of money to help survivors. Those records have since been broken following the disaster in Qinghai province in April. So amazing was the response that media analysts suggest the disaster triggered an explosion in compassion, which has continued to spread throughout the country.
The amounts being donated have also steadily increased year on year over the last decade, official figures show.t?
China received 107 billion yuan in donations from home and abroad in 2008,more than three times the amount in 2007, according to the Blue Book on Charity Donation Development in China (2003-07), an independent report sponsored by China Philanthropy Times. For the first time, the money given by individuals on the mainland surpassed donations from corporations - 54 billion yuan (7.9 billion) given by individuals, compared to 34 billion yuan by corporations.
However, in a recent survey of people who donated to the Sichuan relief efforts, Deng found that less than 5 percent of the 1,684 who responded know exactly how the money is being spent, while more than 60 percent had little or no idea. (Authorities have published financial accounts during the ongoing reconstruction of Sichuan.)
The trend is also typical among people who give regularly to many Chinese charities,said the professor, who added that although the public is growing more aware of how they work, the overall disclosure of information is far from sufficient.
Trust is fundamental to how most charities are run in other nations but “getting all charities in China to be 100-percent transparent has proved virtually impossible”, said Deng, who also works in the university’s NGO Research Center.
About 410,000 charitable organizations were registered to operate by the end of 2008,while another 760,000 were running but still waiting for official documentation, said a report in the Blue Book of Philanthropy 2009, an independent academic evaluation of China’s charity sector.
Very few publish any kind of annual progress or spending reports, and donors rarely think to ask for them, say analysts.
“A lack of professional management, transparency and trust are major problems facing the charity sector in China,” said Yang Tuan, a professor at the Chinese Academy of Social Sciences’ institute of sociology, who co-authored the Blue Book of Philanthropy 2009. “The fact that there is no charity association is the biggest problem, though. There is simply no co-operation that allows these groups to confront and overcome common obstacles, as well as provide mutual supervision.”
Fund-raising problems
China’s first and, as yet, only regulations for charitable NGOs were implemented in 2004 and apply just to the administration of foundations. A draft of the new Charity Law,which is expected to contain stricter legislation over fund management, was submitted to the State Council in 2009.
Under the current rules, NGOs have to be affiliated with a government departmentbefore they can register with the Ministry of Civil Affairs.
Finding one is no easy task, however, and there are some 250,000 grassroots groupsthat are instead being run illegally with business licenses, the Blue Book of Philanthropy 2009 says.
“Also, only foundations that are affiliated with a government department or have ties with an authority enjoy the luxury of being allowed to raise money in public,” said Deng.
“Grassroots organizations always suffer a chronic shortage in donations.”
Of the 943 foundations registered in China that can legally raise funds in public, 83are government-owned NGOs (otherwise known as GONGOs), said the professor.
Collecting money from the public without the proper authority is illegal and can lead to serious consequences for charity organizers, and the groups will automatically be shutdown.
“This is a concern for many of my friends who work for grassroots NGOs,” said Guang Pu, the 30-year-old director of One Heart, a legally registered non-profit orphanage in Xiamen, Fujian province, that publishes monthly financial reports for donors. “The rules effectively stop a lot of grassroots charities from raising awareness of their cause and soliciting public donations.”
The lack of clear governance has led to conflicts between charity organizers anddonors.
Sun Village, one of China’s first charities for children of convicts in Beijing, has been well supported for many years, including by several multinational companies.
However, complaints in recent years by donors over its opaque spending habits have cast doubts over its reputation.
The village director, Zhang Shuqin, denied the claims and feels she was unfairly criticized in press. She blamed the charity’s difficulties on the fact that it lost its affiliation with the government in 2003.
When Sun Village lost its link to the local authority, “I begged more than 10other departments to help us”, said Zhang, who launched Beijing Sun Village Children Education Consultancy in 2003. As none agreed, she opted to register the organization as abusiness with the capital’s administration for industry and commerce - make it illegal for the village to raise funds publicly.