On April 26, the Ministry of Civil Affairs issued “Some Regulations Concerning the Standardization of Foundation Behavior (Trial Implementation)” for public comment. In response, around 30 foundations, including China Youth Development Foundation, Narada Foundation and the Shenzhen One Foundation, came together to present their opinions on the regulations. Several items in the draft have elicited concerns voiced by NGO leaders and scholars such as Xu Yongguang of the Narada Foundation and Deng Guosheng, director of Tsinghua University’s Innovation and Social Responsibility Research Center. They include the following:
The clause that foundations should not fund for-profit organizations would create difficulties for a number of NGOs which are registered as businesses. Mr. Xu, whose foundation has funded such NGOs in the past, noted that this regulation would threaten the livelihood of NGOs in this category.
The clause about foundations keeping foundation staff salaries and office administrative costs under 10 percent of foundation expenditures was cited as being overly restrictive and prevent foundations from attracting qualified, professional staff. The regulations address some problems that have already been brought to light, but have not adequately addressed other issues that need to be clarified such as what kind of behavior constitutes “public interest” activity.
Other parts of the regulation drew praise for further clarifying how foundations should receive and use donations, allowable methods for increasing the value of foundation assets, and information disclosure standards.
