As part of the ongoing social management innovations in Guangdong, new Guangzhou fundraising regulations will go into effect on May 1 of this year, and will allow social organizations (社会团体), civil non-enterprise units (民办非企业) and nonprofit public institutions (事业单位) to fundraise publicly. The first two categories are NGOs registered with Civil Affairs. Special mention was made of organizations supporting the elderly, disabled, solitary and poor individuals, and disaster relief. The regulations will have the effect of breaking the monopoly that GONGOs, in particular public fundraising foundations, have had on public fundraising.
The Civil Affairs bureau sees this regulation as a major step in promoting a more open public welfare system rocked by scandals that hit GONGOs last year. According to local authorities, the idea is to create more market competition between public interest organizations.
Some caveats apply. The principle of territoriality applies to these regulations. Specifically, the Guangzhou regulation only applies to organizations registered in Guangzhou and limits fundraising to Guangzhou municipality. Authorities also revealed that a similar regulation for Guangdong province was being considered.
The regulations will also tend to benefit larger, more mature public interest organizations that have the staff to carry out fundraising. Small organizations with less professional staff will find it more difficult to compete in this environment, and will have to increase their administrative costs.
In terms of the process, the Guangzhou regulations specify that the organization will have to submit a fundraising proposal and if approved, will have a three month period in which to fundraise, although the forthcoming Guangdong province regulations will reduce that to a two-month period, although organizations can apply for an extension.
