New disclosure rules will seal loopholes in the Charity Law

THE MINISTRY OF CIVIL AFFAIRS published draft provisions regarding the information disclosure of charity organizations for opinions on Friday. Beijing News commented on Sunday:

When it comes to transparency, charity organizations are no different from other public organizations. But that was not the case in China until March last year when the Charity Law was passed, making it a legal obligation for charity organizations to make their operations public.

Even now though, some people still believe that charities are not obliged to keep the public informed of their financial affairs, on the grounds that doing so increases a charity’s operating costs, which is not why people donate money, and the compulsory annual audit is already a guarantee of financial integrity.

But the audit is far from sufficient to ensure clean hands and honesty.

After the Charity Law was enforced in September last year, information disclosure has become a conventional practice of these organizations, which has deepened people’s trust in them. However, the law does not specify any penalties for those charity organizations that fail to disclose their financial affairs.

The draft rules released by the Ministry of Civil Affairs stipulate in detail the punishments the charity organizations will receive if they do not fulfill their information disclosure duties, including having to suspend operations if they fail to disclose certain kinds of information in time.

Also, the rules require each charity group to disclose the duties and salaries of the five staff members with the highest pay. Putting the top management under public scrutiny in this way will help avert corruption.

The rules are necessary plugs to seal the loopholes that exist in the Charity Law.