In order to better understand the impact of the three-year pandemic on China’s NGOs and the current situation of these organizations, China Development Brief, in collaboration with 22 domestic social organizations (a local umbrella term that includes NGOs), recently conducted a survey on the current situation and needs of Chinese NGOs following the Covid-19 pandemic.
The survey aims to record the impact of the pandemic on the Chinese NGO sector and promote deeper understanding and support for these organizations from government decision-making departments, funding institutions and the general public.
The survey was conducted from March 13 to 27, with a total of 566 questionnaires returned. Focusing on local NGOs (excluding foundations), this report analyzed 505 valid samples, of which 454 were from grassroots, community service organizations.
The survey results show that the three-year pandemic has had a significant impact on social organizations nationwide, especially on small and medium-sized organizations. Although pandemic controls have been lifted and social and economic activities have resumed, the recovery of the economy will take time, and social organizations are expected to continue to tighten their belts this year.
- The past three years led to the closure of about 20 percent of social organizations surveyed and made a significant impact on over 70 percent of existing social organizations, making their survival difficult. Among them, community-based organizations below the provincial level have been most severely impacted.
- The pandemic had the greatest impact on funding, followed by difficulties in project implementation and management and team maintenance. The lack of funding far outweighs other problems caused by Covid-19.
- The pandemic has led to a decrease in income of roughly 53 percent at around 53 percent of existing NGOs in 2022 compared to 2019 (before the pandemic): 28 percent of which saw a decrease of 20 percent or more, and 12.5 percent of which saw a decrease of more than 40 percent. The loss of revenue was even more acute at NGOs operating locally, with the biggest falls in revenue coming from cuts to government procurement services.
- Government procurement contracts rank first when it comes to the main source of income of most surveyed organizations, far surpassing the second source. The second largest source is domestic charity organizations (including foundations), which also far exceeds the third source, online crowdfunding. However, for national-level NGOs, domestic charity funding ranks first, followed by corporate funding and government procurement contracts.
- Income expectations for 2023 are generally pessimistic, although 2022 was an exceptionally tough year, 37 percent of organizations that returned questionnaires said that their estimation of their income for this year would stay roughly the same. More than 35 percent of organizations even expect revenue reductions of more than 10 percent from the previous year.
- The pandemic has had an impact on the maintenance of projects and team members working on projects. While some limitations on project implementation have been gradually eliminated with the relaxation of pandemic controls, the impact on talent retention is still largely related to an organization’s level of income.
NGOs in post-pandemic era need external support
In terms of NGO-related laws and policies, organizations CDB surveyed hope the restrictions on their fundraising — as well as their daily operations and project requirements — can be relaxed, and they also hope for better support for them to exchange and learn from other NGOs. Some of them also were keen for NGOs to be able to enjoy preferential tax rates, like small and micro businesses do.
In terms of the implementation of these laws and policies, local NGOs expressed their willingness to participate and get more involved in the policy-making process related to the sector. Moreover, they hope that law enforcement agencies can communicate and interact with NGOs more and improve the implementation of the country’s Charity Law.
In addition, Chinese NGOs hope they can involve the public more in the sector, in order to improve understanding and recognition of organizations and increase the willingness of people to donate to projects and activities.
When it comes to expectations for funders, NGOs’ demands are mainly in two aspects: longer funding cycles (over 3 years), so as to stabilize projects and personnel, and that the ratio of personnel and operating expenses can be increased to ensure professional operation.
For local-level NGOs, they need training or general support for their project implementation and management capabilities, as well as capacity building activities for their sustainable development and ability to raise funds. For national-level NGOs, they need more support in communications.
All in all, the pandemic has caused enormous difficulties for Chinese NGOs in the past three years, and the biggest difficulty they currently face is funding. And as far as the CDB survey goes, it is clear that their difficulties will not ease in the near future, and are likely to get worse.
As a result, organizations will probably need to reduce expenditure and increase the social value and influence of their services to gain more social recognition. In terms of local policies and regulations related to NGOs, organizations want a more relaxed space for their development.
At the same time, the NGO sector will probably need even more government procurement services to give local NGOs “breathing space”. Grant-making organizations also need to contribute to the survival of project-based NGOs. On the one hand, they may want to consider expanding crowd fundraising to increase the amount of funding. On the other hand, it is necessary to extend the funding time and increase the proportion of funding available for the operation of projects.
Due to time and capacity constraints, this survey report was not carried out using a random sampling method, and the survey lacks in-depth sample analysis and can only provide surface-level data and conclusions. In addition, the sample size is uneven in different regions; for example it’s too small in some areas with a large number of NGOs (such as Hubei Province), and there are no samples from Tibet, so the survey is not necessarily representative of these areas. Therefore, the results of this survey can mainly be used as a reference for general trends, and are not recommended for more detailed analysis.