The third forum on the Charity Sector’s Legalization and Development, co-hosted by the Legal Center for NGO (ForNGO) and Swanport, took place in Beijing on Oct 20. Examining how companies and charities can work together during the “third distribution”, the event saw the participation of experts from charities, the media, and the private sector, with a total of 7,000 people tuning in online.
Among the keynote speakers were Lan Yuxin, associate professor of the School of Public Policy & Management, Tsinghua University; Xu Yongguang, honorary president of the Narada Foundation; Liu Youping, secretary-general of the China Charity Alliance (CCA); Wang Lihui, secretary-general of Beijing Western Sunshine Rural Development Foundation; Li Wen, director of the Research Center of China Alliance of Social Value Investment; and Zhang Yan, deputy secretary-general of Beijing Ginkgo Foundation.
As the first speaker at the forum, Lan Yuxin shared his analysis on collaboration between state-controlled companies and social enterprises against the background of the third distribution. He pointed out that new opportunities would emerge as the tax system was adjusted, however, clear policy guidance and practical advice on how charitable organizations should react to the initiative are still mostly absent. To prepare for these opportunities, Lan suggested charities focus more on improving their service quality. In addition, he advised that the sector should create more space for organizations to cooperate and effectively distribute and share resources.
Xu Yongguang, speaking from a business perspective, outlined how companies can take part in charitable undertakings under the new tax system. He said that during the period of the third distribution, it has to be guaranteed that companies have enough capital to operate and plan for their future development. The first step for companies to contribute to public welfare is to integrate business activities with charitable concepts, such as protecting labor rights and the environment. Xu said that employees are good resources for companies to support charity work and they should be encouraged to share professional knowledge and skills with staff in charities. Meanwhile, it is important for companies to try and solve social issues through their products and services, and collaborate with charitable organizations to tackle problems that cannot be solved by the private sector alone.
The third speaker, Liu Youping, argued that the sector must be aware of the fact that charities and private companies are interdependent social entities. Many charities rely on private donations; but the effect of the third distribution should not be exaggerated, and there should be no expectation that private companies will be obliged to donate to charities. Rather, the charity sector has to improve its professionalism and efficacy, and learn from the business strategies taken by private companies.
Wang Lihui shared her own observations on the sector and experiences of facilitating communication between charitable organizations and businesses. She said that more interaction between charities and companies will benefit both sides. Wang also highlighted the need for charities to be more creative, and to think “commercially” when operating programs with companies.
Another speaker, Li Wen, also stressed the significance of creativity and said that there is room for charities to be more innovative when conducting their activities. With the reform of the tax system, some business methods may also need to be used by charitable organizations in order to achieve better cooperation. What charities can also do, Li suggested, is to work with companies and help them create their CSI plans, which incorporate social governance and global governance with corporate governance.
For Zhang Yan, the tax reform will not only bring new resources to charities; it may also affect some foundational concepts and practices of the sector through closer collaboration between charities and businesses. She used the example of some approaches used for program evaluation that were essential for donors to see but not always appropriate for staff to complete. Zhang stressed that the local context would inevitably impact the structure, pace and outcomes of a field program. Therefore, real local situations should be introduced to donors before a program is launched, so an effective evaluation system can be generated at a later stage. She said that when collaborating with companies, charities should take advantage of their skills and technologies to improve the quality of their services and programs.