New law aims to give char­ity a lift

Law­mak­ers are de­bat­ing new leg­is­la­tion to en­cour­age the de­vel­op­ment of the char­i­ta­ble sec­tor and re­pair a tar­nished im­age, as Lu­oWang­shu and Cao Yin re­port.

China Daily (Canada) - - TWO SESSIONS -

On March 4, the day be­fore the start of the an­nual ses­sion of China’s leg­is­la­ture, a reporter asked the coun­try’s top leg­is­la­tors why they planned to re­view the fi­nal draft of a new char­ity law in pref­er­ence to “more im­por­tant” leg­is­la­tion.

Given the weighty sub­jects un­der dis­cus­sion at the an­nual gath­er­ing, the ques­tion was ap­pro­pri­ate, but it also re­vealed the main­stream Chi­nese view of phi­lan­thropy: For many peo­ple, char­ity is ir­rel­e­vant to their lives.

How­ever, the draft of a new law that was sub­mit­ted for re­view on Wed­nes­day aims to reg­u­late and de­velop the sec­tor, an­di­s­ex­pect­ed­to­provideav­i­tal shot in thearm­for char­i­ties.

“What has im­pressed me most is that the draft aims to cre­ate a more sup­port­ive en­vi­ron­ment for char­i­ta­ble ac­tiv­i­ties. It will sim­plify the reg­is­tra­tion pro­ce­dures and al­low peo­ple, re­sources and or­ga­ni­za­tions with the de­sire to un­der­take char­i­ta­ble acts to en­ter the field,” said Li Jing, sec­re­tary-gen­eral of the One Foun­da­tion, China’s first pri­vate char­i­ta­ble fundraiser.

“Mean­while, su­per­vi­sion will be strength­ened to reg­u­late and man­age so­cial or­ga­ni­za­tions to pre­vent il­le­gal­ity,” he said, adding that the new law will pro­mote com­pe­ti­tion in the sec­tor.

WangMing, pres­i­dent of the NGO Re­search In­sti­tute at Ts­inghua Univer­sity and also a mem­ber of the Na­tional Com­mit­tee of the Chi­nese Peo­ple’s Political Con­sul­ta­tive Con­fer­ence, called the pro­posed leg­is­la­tion a “mile­stone” in Chi­nese phi­lan­thropy.

“In the past decade, the boom in phi­lan­thropy has mostly been driven by the mar­ket, but it has also been driven by so­ci­ety as a whole, in­clud­ing pri­vate com­pa­nies, en­ter­prises and pub­lic en­thu­si­asm. But with­out laws or reg­u­la­tions, prob­lems­may arise,” he said.

China has more than 600,000 so­cial or­ga­ni­za­tions and 65 mil­lion reg­is­tered vol­un­teers. In 2014, di­rect do­na­tions to­taled more than 100 bil­lion yuan ($15 bil­lion), over­shad­ow­ing the 10 bil­lion yuan do­nated in 2004.

In re­sponse, the govern­ment is aim­ing to stan­dard­ize the sec­tor. In Oc­to­ber, the first draft of the new law was sub­mit­ted to the Na­tional Peo­ple’s Congress, the na­tion’s top leg­isla­tive body, and the se­cond draft was open for pub­lic con­sul­ta­tion un­til Jan31. NPCdeputies will vote on the fi­nal draft onMarch 16, the last day of this year’s two ses­sions.

“The im­por­tance of the char­ity law can­not be un­der­es­ti­mated,” said Fu Ying, spokes­woman for the Fourth Ses­sion of the 12th Na­tional Peo­ple’s Congress, adding that it will be the coun­try’s first fun­da­men­tal and com­pre­hen­sive la­won phi­lan­thropy.

With­the fast de­vel­op­ment of phi­lan­thropy, China ur­gently needs a com­pre­hen­sive char­ity law that will pro­tect the rights of donors and the needy, and pun­ish fraud­u­lent oper­a­tors, she said.

Li Yul­ing, hon­orary pres­i­dent of the China Char­ity Fed­er­a­tion, said the sec­tor has been harmed by neg­a­tive pub­lic­ity and a poor pub­lic im­age, es­pe­cially as some en­trepreneurs con­duct their busi­nesses un­der the guise of char­ity, which has re­sulted in mis­un­der­stand­ings and mis­trust.

“What is phi­lan­thropy? In many for­eign coun­tries, chil­dren learn about phi­lan­thropy at pri­mary school, but many peo­ple in China are still un­aware of it or they con­sider phi­lan­thropists to be hyp­o­crit­i­cal or fake,” she said.

Kan Ke, deputy di­rec­tor of the Leg­isla­tive Affairs Com­mis­sion of the NPC Stand­ing Com­mit­tee, ac­knowl­edged the prob­lem: “We­have toad­mit­the pub­lic has had doubts and lost some trust in the char­ity sec­tor af­ter a num­ber of do­na­tion scan­dals in re­cent years. That’s why we de­cided to solve the prob­lems through leg­is­la­tion.

“We don’t want to see char­i­ta­ble or­ga­ni­za­tions us­ing money do­nated by the pub­lic to fund busi­nesses, nei­ther do we want to see peo­ple pre­tend­ing to be man­agers of char­i­ta­ble or­ga­ni­za­tions,” he said, re­fer­ring to a 2011 scan­dal that prompted a back­lash against phil­an­thropic or­ga­ni­za­tions.

The case in­volved a young woman, Guo Meimei, who posted pho­tos of her­self with lux­ury cars and ex­pen­sive hand­bags on Weibo, China’s Twit­ter-like so­cial me­dia plat­form. Guo’s claims that she was em­ployed as a man­ager of an or­ga­ni­za­tion as­so­ci­ated with the Chi­nese Red Cross Char­ity made na­tional head­lines as out­raged mem­bers of the pub­lic crit­i­cized what they saw as mis­ap­pro­pri­a­tion of do­nated funds.

Al­though it was later re­vealed that Guo had no links with the char­ity, pub­lic trust had been un­der­mined, re­sult­ing in a se­vere de­cline in do­na­tions to the Red Cross So­ci­ety of China. The or­ga­ni­za­tion still hasn’t fully re­cov­ered from the in­ci­dent. In2010, theRedCross re­ceived do­na­tions to­tal­ing 7.63 bil­lion yuan, but the fig­ure fell to 4.198 bil­lionyuanin2011. Do­na­tions con­tin­ued to de­cline year-on-year, and in 2014, the Red Cross re­ceived just 2.6 bil­lion yuan.

“In the char­ity sec­tor, one bad ap­ple spoils the whole bar­rel. Il­le­gal be­hav­ior jeop­ar­dizes the whole sec­tor, so it’s very im­por­tant that su­per­vi­sion is strength­ened to make phi­lan­thropy more pop­u­lar with the gen­eral pub­lic,” said Li Jing from the One Foun­da­tion.

Kan said the pro­posed leg­is­la­tion aims to im­prove the de­vel­op­ment of the char­ity sec­tor, rais­ing pub­lic aware­ness and en­cour­ag­ing more peo­ple to do­nate money.

“Over the past few years, the to­tal amount do­nated an­nu­ally has­been­about100­bil­lion yuan. That may sound a lot, but in fact, it’sno­tahuge­sum,” hesaid.

Ac­cord­ing to the 2015 CAF World Giv­ing In­dex, pub­lished in Novem­ber by the Char­i­ta­ble Aid Foun­da­tion in Lon­don, Chi­nese peo­ple are re­luc­tant to do­nate money to char­i­ties or vol­un­teer to help. The sur­vey ranked China next from last on a list of 145 coun­tries and re­gions, only above Bu­rundi.

“The rea­son lies in the pub­lic’s low aware­ness of char­ity, and dis­trust of char­i­ta­ble or­ga­ni­za­tions. We­hopethe­newleg­is­la­tion will reg­u­late the found­ing, op­er­a­tions and the meth­ods of do­na­tion of char­i­ta­ble or­ga­ni­za­tions, be­cause the more reg­u­lated the in­dus­try is, the more do­na­tions we will re­ceive,” Kan said.

Fung Dan-lai, a CPPCC Na­tional Com­mit­tee mem­ber and a for­mer mem­ber of the board of the Tung Wah Group of Hospi­tals, said: “Just as many in­ter­na­tional NGOs play im­por­tant roles in help­ing gov­ern­ments take care of peo­ple in need in their coun­tries, it should be the same in China. Char­i­ta­ble or­ga­ni­za­tions should play their roles to care for the un­der­priv­i­leged,” she said .

“Hong Kong has the Tung Wah Group of Hospi­tals with a his­tory of 150 years, which is the old­e­standthe largest char­i­ta­ble or­ga­ni­za­tion in­HongKong. Not a sin­gle Hong Kong fam­ily can

China’s so­cial or­ga­ni­za­tions:

In 2014, the num­ber of so­cial or­ga­ni­za­tions rose 9.7 per­cent from the year be­fore.

In China, do­na­tions can be made di­rectly or in­di­rectly:

The de­part­ments so­cial affairs & Foun­da­tion­ssys­tem Civil or­gans Fed­er­a­tion In 2014, char­i­ties re­ceived Char­ity govern­ment China Other The In­di­rect do­na­tions come from the char­i­ta­ble wel­fare lot­tery and the sports lot­tery.

In 2014, sales by both lotteries to­taled more than

Do­na­tions re­ceived by The Red Cross:

Vol­un­teers:

In 2014, 109 mil­lion vol­un­teers do­nated

work hours, val­ued at say they have never re­ceived help from theTungWah Group. This iswhatanon-profit or­ga­ni­za­tion should be; the govern­ment’s right-hand man, help­ing peo­ple in need,” she said.

A com­pre­hen­sive le­gal frame­work will be an es­sen­tial fac­tor in im­prov­ing trans­parency and fund­ing for so­cial or­ga­ni­za­tions in the Chi­nese main­land, ac­cord­ing to Fung: “Char­i­ta­ble or­ga­ni­za­tions and the peo­ple in­volved should fol­low the law. It must be planned cor­rectly. Char­i­ta­ble or­ga­ni­za­tions should be run sci­en­tif­i­cally so they use do­na­tions cor­rectly and help peo­ple.”

Kan, from the NPC, said the com­pli­cated reg­is­tra­tion pro­ce­dures for char­i­ta­ble or­ga­ni­za­tions have dis­cour­aged both in­di­vid­u­als and or­ga­ni­za­tions from join­ing the sec­tor. The new law has been drafted to re­duce red tape and sim­plify the en­try pro­ce­dure. It also in­cludes a num­ber of fa­vor­able tax poli­cies for char­i­ta­ble or­ga­ni­za­tions, and will pro­vide tighter su­per­vi­sion.

“That’s a good thing. Af­ter all, the do­nated money is not the or­ga­ni­za­tions’ money, so they can­not use it as they want. The pub­lic has a right to know whether the money is be­ing

bil­lion used ef­fec­tively,” he said.

Ac­cord­ing to Li Yul­ing, from the China Char­ity Fed­er­a­tion, the new law will stream­line ad­min­is­tra­tion of the sec­tor. “All so­cial or­ga­ni­za­tions are cur­rently re­quired to reg­is­ter with the civil affairs de­part­ments, but they also have to reg­is­ter with a re­lated govern­ment depart­ment, which acts as their su­per­vi­sor. That’s very in­con­ve­nient. The new law will change that, which is good news.”

Li Jing, from the One Foun­da­tion, be­lieves the leg­is­la­tion will give or­ga­ni­za­tions greater in­de­pen­dence. “There is no doubt that the com­ing char­ity lawwill be ex­cel­lent news and a mile­stone in the im­prove­ment of phi­lan­thropy in China. The draft spec­i­fies that char­i­ta­ble foun­da­tions and donors will be al­lowed to en­ter into agree­ments about ad­min­is­tra­tive costs,” he said.

Un­der the cur­rent leg­is­la­tion, the cost of ad­min­is­ter­ing in­di­vid­ual do­na­tions, which in­cludes salaries of staff mem­bers, can­not ac­count for more than 10 per­cent of the to­tal an­nual do­na­tion. For ex­am­ple, only 50 yuan of an an­nual do­na­tion of500yuan­canbe­set aside for ad­min­is­tra­tive costs. The new law is likely to al­low Cur­rently, reg­u­la­tions over­see the man­age­ment of three types of so­cial or­ga­ni­za­tion:

So­cial groups Foun­da­tions Pri­vate non-profit or­ga­ni­za­tions

The top 10 most gen­er­ous donors in China last year:

He Qiaonyu

Bei­jing Ori­ent Land­scape Co the par­ties to reach a bi­lat­eral agree­ment on the pro­por­tion of a do­na­tion that can be used to pay salaries and other ex­penses.

The pro­posed leg­is­la­tion has also at­tracted at­ten­tion out­side China.

“We see the newlawas a very pos­i­tive de­vel­op­ment. The pro­posed law seeks to pro­mote a cul­ture of char­ity, as well as to pro­tect the rights and in­ter­ests of char­i­ta­ble or­ga­ni­za­tions, donors, vol­un­teers, ben­e­fi­cia­ries an­dother­swhoworkin the field of char­ity,” wrote Pia MacRae, coun­try di­rec­tor of Save the Chil­dren in China, in an e-mail ex­change with­China Daily.

MacRae em­pha­sized that ef­fec­tive regulation and su­per­vi­sion will boost pub­lic trust in the sec­tor: “Our great­est hope for this new law is that it is a cat­a­lyst in the fur­ther de­vel­op­ment of China’s phil­an­thropic sec­tor, through both rec­og­niz­ing and en­cour­ag­ing the role that char­i­ties can play in so­cial de­vel­op­ment, while also en­sur­ing that the sec­tor is well-man­aged and trans­par­ent.”

Mean­while, Diana Tsui, head of Global Phi­lan­thropy for Asia Pa­cific at JPMor­gan Chase, said the leg­is­la­tion will pro­vide greater clar­ity and su­per­vi­sion. “We need rep­utable and strong lo­cal NGO part­ners to help de­liver on com­mit­ments. With the new law put in place, our lo­cal­part­ners will­be­comem­ore trans­par­ent and ac­count­able in de­liv­er­ing im­pact on the ground,” she wrote in an e-mail toChina Daily.

While char­ity sec­tor pro­fes­sion­als have been de­bat­ing the im­ple­men­ta­tion of the new law, and many NPC deputies have sub­mit­ted pro­pos­als and sug­ges­tions dur­ing the two ses­sions, Li Jing said im­ple­men­ta­tion will just be the first step in the process, and char­i­ta­ble or­ga­ni­za­tions will have to play their part, too.

“The big ques­tions that re­main are how to carry out char­i­ta­ble ac­tiv­i­ties ac­cord­ing to the pro­vi­sions out­lined in the new law, and how to re­vise the cur­rent out­dated reg­u­la­tions so they adapt to it. We­needto con­tinue look­ing into them to find the right an­swers,” he said.

Su Zhou con­trib­uted to the story.

Con­tact the writ­ers through lu­owang­shu@ chi­nadaily.com.cn

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