Editor’s Note:
This is an edited and abbreviated version of an article from the Chinese Academy of Social Science’s annual “Blue Book of Philanthropy” of 2015. The article summarizes the development of China’s charity sector during 2015. For the most part the year is described as a period of positive change, during which the legal framework improved, the sector continued to expand, the public’s participation intensified and online charity became increasingly popular. What’s more public interest litigations became the new preferred form of action on the part of environmental organizations, and the earthquake in Nepal allowed Chinese NGOs to scale up the pace of their internationalization. On the other hand various scandals concerning the missapropriation of funds came to light, exposing weaknesses in the industry’s regulations, and disagreements between social organizations and the government remained.
2015 will go down as an important year in the development of the charity sector in China, during which the legal environment for charity improved rapidly. It was the year when the “Law on the Management of Overseas NGOs” and the “Charity Law” were successively published for public consultation. The Central Committee of the Communist Party of China (CPC) strengthened party-building aimed at social organizations, presenting documents on party-building for this purpose. The state published an overall plan to separate administrative authorities from professional associations and chambers of commerce, thereby achieving the administrative reform of these organizations. China’s civil affairs departments at all levels explored new types of supervisory systems to achieve the comprehensive supervision of social organizations.
Furthermore, during 2015 China’s public welfare industry quickened the pace of building up its basic infrastructure. The industry vigorously took part in the legislative discussions on the “Overseas NGO Law” and the “Charity Law,” reflecting popular sentiment. The emergence of the “September 9 Public Welfare Day” promoted the productive link that now exists between the public welfare sector and public participation, and mass public welfare continued to become more mainstream. Academic institutions and professional support alliances continuously sprung up within the public welfare industry, furthering its maturation. Social enterprises explored new paths that go beyond traditional public welfare, while many new social enterprises and social investment platforms were established. At the same time, measures for the certification of social enterprises were introduced. The attention drawn by the “Under the Dome” documentary made environmental organizations realize the public’s potential. Public participation platforms like the Public Environment Research Center, Guangzhou Green Net and others were able to take advantage of this situation for their own development.
On the other hand, during 2015 incidents like those involving White Student Aid Online and the Special Starlight Fund continued to come to light, making it clear that governmental and organizational supervision are insufficient. Student aid organizations, environmental organizations, labor organizations and women’s organizations continued to see their space to exist and operate come under government pressure. Managing the relationship with the government is a challenge always faced by public welfare organizations. Finally, under the government’s One Belt and One Road strategy, China’s public welfare organizations actively advanced their internationalization.
▼Constructing a Comprehensive Institutional Environment for the Development of the Charity Sector
The “Charity Law” and the “Overseas NGO Law” are Drafted in Order to Standardize the Management of Foreign and Domestic Charity Organizations
In 2015, two laws on China’s public welfare industry were published to solicit feedback. The “Charity Law” was drafted with the aim of developing the charity sector, while the goal of drafting the “Overseas NGO Law” was to standardize and guide the activities of overseas NGOs in mainland China. The “Charity Law” was passed during the 4th Plenary Session of the 12th National People’s Congress (NPC) in March 2016, while it is still unclear when the “Overseas NGO Law” will be put to the vote. The promulgation of these two pieces of legislation will have a profound effect on China’s public welfare sector.
Beginning in February 2014, when it launched legislative work on the “Charity Law,” the NPC has implemented an open law-making procedure. In the process of drafting the “Charity Law,” the Internal and Judicial Affairs Committee of the NPC used a variety of formats to hear opinions on the legislation from relevant government departments, local people’s governments, charitable institutions, experts and the public, creating a law-making procedure founded on state/society interaction. In 2014, the Internal and Judicial Affairs Committee received many feedback reports on the charity law from academic institutions. In October 2015, the NPC conducted the first reading of the “Charity Law.” The “Charity Law (Draft)” was then released to solicit feedback. Overall, there were many excellent elements in the first draft. The first draft clearly defined the concept of charity in broad terms, expanding the previous legal limitations on the term. The sections of the first draft on matters such as charitable organizations engaging in online fundraising, individuals engaging in public fundraising, charitable trusts and tax benefits triggered debate and drew the attention of charity circles, academia and the public.
In December 2015, the NPC conducted the second reading of the “Charity Law”, followed by a second round of public consultations, once again displaying a spirit of open law-making. The sections from the second reading’s draft on matters such as social organizations engaging in online fundraising, individuals engaging in public fundraising, tax benefits, real-name registration of volunteers and information disclosure triggered debate and drew the attention of charity circles, academia and the public. On March 9th 2016 Li Jianguo, vice-chairman of the NPC, introduced the “Charity Law (Draft)” during the 4th Plenary Session of the 12th NPC. Concerning the third reading’s draft of the law, the focus of charity circles, academia and the public was on the limits placed on the management expenses of public fundraising foundations as a proportion of total expenditures, and the precise definition of management expenses. On March 16th, the 4th plenary session of the 12th NPC voted to pass the “Charity Law,” effective from September 1st 2016. From that point onwards, China’s charity sector will enter a new period of legal certainty.
In 2014, as the state launched the drafting of the “Charity Law,” the drafting of a separate law on overseas NGOs was pushed forward at an even greater speed, although the legislative procedure decelerated following comments received in response to a request for feedback on the second draft law in 2015. In December 2014, the State Council submitted the draft of the overseas NGO management law to the NPC for deliberation. That draft was not made available for public consultation. Currently, the main Chinese laws touching on overseas NGOs are the 1989 “Provisional Regulations on the Management of Foreign Chambers of Commerce” and the 2004 “Regulations on the Management of Foundations.” In 2009, the central government authorized Yunnan to introduce local regulations on overseas NGOs, the “Yunnan Province Provisional Regulations on Standardizing the Activities of Overseas NGOs.” In April 2015, the 14th meeting of the 12th NPC Standing Committee deliberated on the “Law on the Management of Overseas NGOs (Second Draft)”, after which the law was published to solicit feedback from society.
The main areas regulated by the “Law on the Management of Overseas NGOs” are overseas NGOs registering representative offices and conducting temporary activities, the scope of these activities, relevant measures for protecting the legal rights and interests of overseas NGOs and the supervision and management of the activities of representative offices. The second draft clearly adopts the dual-management system and confirms that the Ministry of Public Security and the public security departments at the provincial level are the registration authorities of overseas NGOs, that organizations authorized by national-level departments and commissions, relevant provincial level authorities, the State Council or local people’s governments are the professional management units, and that public security departments and other relevant departments below the provincial level may not act as registration authorities or professional management units, respectively.
After the “Overseas NGO Management Law” was made public, it immediately drew a high degree of attention both domestically and internationally, especially among overseas NGOs and the domestic public welfare organizations working with them. International NGOs and the international media generally believe that this law will severely restrict the activities of overseas NGOs in China. Currently, issues such as how overseas NGOs and activities conducted by overseas NGOs are defined in the “Overseas NGO Management Law” are drawing considerable attention. In July 2015, the Ministry of Foreign Affairs, the Ministry of Public Security and the Ministry of Civil Affairs (MCA) convened a forum for overseas NGOs in Shanghai in order to understand the situation of overseas NGOs working in China and to listen to feedback on the services and management provided by the authorities. Following the forum, there was no clear progress in the drafting of the “Overseas NGO Management Law.” According to information published by China’s two national legislatures in 2016, the “Overseas NGOs Management Law” is still being revised.
A Series of Institutional Measures Taken by the Central Committee Strengthens Party-Building and Ensures the Presence of the Party within Social Organizations
In recent years, especially after the government lowered the threshold for the registration of social organizations, their scope and variety has been rapidly increasing. At the same time, the Central Committee recognized that party-building was weak within social organizations and especially that the insufficient presence of party organizations made it difficult for the party to establish itself as the leading core within social organizations. The report of the 18th National Congress of the CPC clearly proposes intensifying party-building among social organizations. In 2015, the Central Committee released two important documents to strengthen party-building among social organizations. In June 2015, the party’s central committee issued the “Regulations of the CPC on Party Organizations (for Trial Implementation)”. These regulations clearly call for party organizations to be established within social organizations. Previously, as stipulated in the “Charter of the Communist Party of China,” social organizations were allowed to establish party organizations, but there was no clear requirement for them to do so. In September of 2015, the General Office of the Central Committee of the CPC published the “Opinions on Strengthening Party-Building among Social Organizations (for Trial Implementation)”.
The Central Committee had two goals in mind when releasing this document: on the one hand, to expand the party’s presence within the space occupied by social organizations, increasing the influence of the party; on the other, to establish the party’s leadership in guiding the development of social organizations along the correct trajectory and encourage social organizations to play a role in the modernization of China’s governance system and governance capabilities. The document clearly defined social organizations: for the most part, the term refers to social associations, civil non-enterprise work units, foundations, social intermediary organizations and urban and rural community social organizations. These steps demonstrate that the Central Committee will comprehensively strengthen party-building within all types of social organizations and complete the expansion of its presence within these organizations.
The document clarifies the management system for party-building among social organizations: party-building in national-level social organizations is subject to the unified leadership and management of the work committees of authorities directly under the Central Committee, the work committees of central government departments under the Central Committee and of the party committee of the State-owned Assets Supervision and Administration Commission; party-building among local level social organizations is subject to the unified leadership and management of the party-building institutions for social organizations established at the provincial, municipal and county levels; the management of party-building among urban and rural community social organizations is to be undertaken by sub-district, township and village party organizations.
Leading and managing party-building in social organizations with professional management units is the responsibility of the party committees of the professional management units, subject to the guidance of the authorities responsible for party-building within social organizations. Party organizations can be established in three ways as proposed by the “Opinions” Document, namely, in the context of a work unit, industry or region. In most cases, the “Opinions” requires the secretary of the party organizations to come from within the social organization and suggests that the head of the organization fill that post if they are a party member. If the head of the organization is not a party member, the secretary of the party organization can be chosen from the management level of the organization. If there is no suitable person within the social organization, it can request a higher level party organization to appoint someone according to internal party regulations.
The Administrative Reform of Industry Associations and Chambers of Commerce is Intensified and a Pilot Program to Increase the Administrative Independence of these Organizations is Launched.
According to statistics, the number of industry associations and chambers of commerce in China reached 70,000 by the end of 2014, and is currently increasing at an annual rate of 10-15%. Industry associations and chambers of commerce play an active role in areas such as providing government consultation and business development services, improving resource allocation, strengthening the industry’s self-regulation, rethinking social governance and taking on social responsibility. Because China’s industry associations and chambers of commerce were established in the wake of government downsizing and institutional reform, they were linked to the affected departments in countless ways. It is not rare for industry associations and chambers of commerce to use these links to exploit the authority of government departments to their own advantage. In 2014, the National Audit Office published a report stating that the Chinese Medical Association, under the management of the National Health and Family Planning Commission, illegally received 820 million RMB from pharmaceutical companies. In accordance with the policies implemented by the Central Committee since the 18th Party Congress, which emphasize clean government, the relationship between market and society, and the decisive role played by the market in resource allocation, the state began pushing administrative reform forward among industry associations and chambers of commerce.
In July 2015, the General Office of the Central Committee of the CPC and the General Office of the State Council published the “Overall Plan for Separating Industry Associations and Chambers of Commerce from Administrative Authorities”. The state pushed forward this plan to break the chain of special interests that linked administrative authorities with industry associations and chambers of commerce, as well as to promote their independent operations. The plan called for completing the “five separations and five standardizations”: separating institutions and standardizing the overall supervisory relationship; separating functions and standardizing the administrative entrustment and division-of-labor relationship; separating financial assets and standardizing the financial relationship; separating personnel management and standardizing the human resources relationship; separating party-building, foreign affairs and other matters and standardizing the management relationship. Later on, the State Council began to push forward a pilot program for increasing the independence of national industry associations and chambers of commerce, expecting to complete the program within three years.
In September 2015, the MCA released the “Measures on Appointing the Heads of National Industry Associations and Chambers of Commerce (for Trial Implementation).” The document stipulates the process for selecting candidates to manage national industry associations and chambers of commerce, abolishing the old system whereby candidates were generally recommended by the relevant professional management unit. In addition, the measures stipulate that managers of industry associations and chambers of commerce should not hold an administrative post. The position shall also not be held by current officials or former officials who have not completed the procedures for stepping-down. Cadres in leadership positions who retired less than three years ago shall not hold positions in industry associations and chambers of commerce. Passing these measures ensures that there will be a thorough separation between government departments, industry associations and chambers of commerce in terms of personnel.
A Comprehensive Supervisory System is Created to Ensure Supervision is in Place as Social Organizations Expand
As the development of social organizations flourishes, the question of how to establish a supervisory system suited to their development trajectory is one that civil registration authorities urgently need to consider. In response to the increasing diversity and sheer number of social organizations, the state has proposed the establishment of a comprehensive supervisory system for these organizations. Fundamentally, this system would include legal, governmental and societal supervision, as well as self-regulation among social organizations. According to the recently issued “Charity Law,” civil affairs departments at all levels must fulfill their legal obligation to supervise and inspect charitable activities and to guide organizations belonging to the charity industry. The MCA released numerous documents in 2015 to plan relevant aspects of the comprehensive supervisory system.
In May 2015, the MCA released the “Guiding Opinions on Exploring the Creation of a Third-Party Assessment Mechanism for Social Organizations.” The document noted that establishing a third-party assessment mechanism is an important component of improving the comprehensive supervisory system for social organizations. A third-party assessment mechanism is beneficial for strengthening the continuous supervision of social organizations. At the end of 2015, the MCA drafted the “Opinions of the Ministry of Civil Affairs on the Mechanism for Terminating Social Organizations (Draft for Public Consultation)”. The document stipulates the different types of termination, the grounds and procedures for doing so, and establishes the legal obligations of the registration and management authorities of social organizations. In March 2016, the MCA released the “Regulations on Registration and Management Authorities Arranging Meetings with Social Organizations for Administrative Law Enforcement (for Trial Implementation)”, providing detailed regulations for conducting meetings with social organizations. According to reports, the MCA is considering releasing a comprehensive document on the supervisory system for social organizations.
▼Chinese NGOs’ Response to the Charity Law and Recommendations for the Philanthropic Sector
Philanthropic organizations had an extremely successful year in 2015. According to the latest statistics from the Ministry of Civil Affairs, by the end of December 2015 there were a total of 658,000 social organizations in China. These included 326,000 community organizations, 4,719 foundations, and 327,000 private non-enterprise work units. By way of comparison in 2014 there was a total of 606,000 social organizations, meaning that in 2015 there was an increase of 8.6%.[2]
According to statistics from the China Foundation Center on December 31st 2015 there were a total of 4,846 charitable foundations in China, representing an increase of 609 from 2014, with an annual rate of growth of 14.37%. Out of these foundations, 1550 (31.99%) were public, and 3296 (68.01%) were private. Only 61 of the newly created foundations in 2015 were public, four less than the number of new public foundations from the previous year. On the other hand there were 648 new private foundations, making up 89.98% of the total amount of newly established foundations in 2015. This increase was about the same as the previous year’s one. The newly created foundations of 2015 were primarily located in Guangdong, Beijing, Shanghai, Jiangsu, and Zhejiang. A total of 330, or 54.19%, of the new foundations of that year were located in these five provinces.
In 2015, there were approximately 100 million people registered as volunteers in China (Mainland), accounting for 7.27% of the total population. The number of people who were actually active as volunteers totalled 94.88 million. In 2015, the number of volunteers increased by 6.9%, the number of volunteered hours totalled 1.559 billion, and the net value of volunteer contributions totalled 60 billion Yuan. In comparison to 2014, there were 4,870,000 more active volunteers in 2015, representing a 5.4% increase. The rate of volunteer donations increased by 4.9%, and the total time donated by volunteers increased by 337 million hours, which is a 27.5% increase. The net value of volunteer contributions increased by 15.7 billion Yuan, which represents an actual growth rate of 29%.
The total anticipated amount of donations from 2015 is expected to reach 99.2 billion Yuan. Out of this, foundations are expected to receive 37.4 billion Yuan in donations. Charities are expected to receive 36.2 billion Yuan; civil administration programs are expected to receive 5.623 billion Yuan, and other organizations will receive 2 billion Yuan. Additionally, taking into consideration the monetary value of volunteer time (60 billion Yuan), as well as the estimated value of the public welfare lottery funds used (34 billion Yuan), the total amount of charitable funds is expected to reach 193.2 billion Yuan.
Although the expected amount of material donations from society in 2015 was anticipated to be less than that of 2014, the increase in the number of volunteers and the increase in volunteered time in 2015 caused a clear increase in the overall value of the volunteered service time. This means that comparing 2015 to 2014, there has actually been a significant increase in the overall value of philanthropic contributions from society. This shows that volunteer services have already had a notable effect on China’s growth and maturity.
The Nonprofit Sector’s Discussion and Concern Regarding the “Charity Law” and the “Law on Overseas NGOs”
Since 2014, Chinese academic organizations and nonprofit platforms that are concerned with the philanthropic sector have actively participated in researching and discussing the Charity Law, and especially the law’s first draft, the revised second draft and the third draft that were all made publicly available in order to get public feedback. This method of improving the legislation not only promoted discussion and attention towards the Charity Law from the Chinese nonprofit community, but also provided feedback to the national legislative organizations, thereby providing an effective response to the Charity Law’s open-door style legislative process.
In 2015, the Chinese nonprofit community was consulted three times about the Charity Law. At each stage, it energetically returned with feedback and suggestions, and through the legislative feedback mechanisms in place, the nonprofit community, to a large extent, had an influence on the law’s content. For the first draft, the Chinese nonprofit community provided key points of discussion regarding online fundraising, individual public fundraising, charitable trusts, and tax benefits, among other things. For the second draft, the nonprofit community heavily focused on online charitable fundraising, individual public fundraising, tax benefits, use of one’s real name when registering as a volunteer, and public disclosure of information. For the third draft, the implications and proportional limits of the management costs of public foundations became the focal point of discussion.
Since the 1990s, international NGOs have been entering China in large numbers. According to statistics, there are currently around 7000 international NGOs operating in China. For quite some time, international NGOs have not only been stable sources of funding for Chinese NGOs, but have also provided great assistance in raising their level of professionalism and the development of philanthropy as a philosophy. In 2015, when the “Foreign NGOs Management Law (Draft)” (Second Draft) was published, there was much concern among international and Chinese philanthropic organizations. The main point of discussion was how the legislative intent, content, and subsequent legislative impact of the “Foreign NGOs Management Law” (Second Draft) would affect Chinese and international NGOs’ ability to exist. National security was the basic legal objective of the “Foreign NGOs Management Law,” and it focused on effectively regulating international NGOs at an organizational and behavioral level.
The second draft of the “Internal Security Act” was made public at almost the exact same time. From a certain perspective, this confirms that the legislative intent of the “Foreign NGOs Management Law” is to provide social security and stability. The content of the law aims for safety and stability, and it emphasizes the selection and management of foreign NGOs. In this way, there is a structural conflict with the development of international NGOs in China. In this draft, the Public Security Administration is clearly responsible for the registration and management of foreign NGOs. This is a point of contention between foreign NGOs and the Chinese philanthropic sector. As the department responsible for the strength of internal stability, it is worth discussing whether or not the Public Security Administration is indeed capable of achieving professional management of international NGOs.
The Chinese philanthropic sector proposes that the Department of Civil Affairs should be responsible for the registration and management of foreign NGOs in order to maintain consistency in the management of foreign and domestic nonprofit organizations. The subsequent impact of the “Foreign NGOs Management Law” drew the most concern from the Chinese and international nonprofit community. International NGOs were most concerned about whether or not they would be able to legally exist and work in China after the law was implemented. In accordance with the regulations of the draft, the space international NGOs had to operate would be severely restricted, and to a certain degree, the independence of their activities would be impacted. At the same time, the Chinese nonprofit community was concerned about whether or not international NGOs would be able to support Chinese grassroots organizations or act as advocates by supplying them with funding, thus impacting the diversity of Chinese nonprofit organizations.
The 9th of September Day of Giving sparks an increased emphasis on crowd-sourced fundraising, and fundraisers and donors create a deeper connection through the Internet
Internet Plus has been one of the hottest topics of 2015. Every industry in China has been working to promote and deepen its integration with the Internet, and the nonprofit sector is no exception. Chinese NGOs are drawing support from the tremendous growth of domestic mobile online platforms; the traditional framework for public welfare is being reconstructed, and the public is now capable of accessing public welfare projects at their fingertips. In 2015, the Tencent Charitable Platform received over 540 million Yuan in donations, 5.4 times more than what was received in 2014. Over 23 million people donated money, which is 4.7 times more than the sum for 2014. There were 7241 fundraising programs in total, which is 6.4 times more than in 2014. Over 95.32% of the donations were completed on a mobile device. Only 4.68% of the donations were completed through a PC device. By contrast, in 2014, nearly 40% came through a PC device.
In 2015 Tencent, in collaboration with many other organizations, launched an annual philanthropic program called the 9/9 (9th of September) Day of Giving. In Europe and the United States, these special charity days are very common. In the United States, the Tuesday following Christmas is called “Giving Tuesday.” In England, on every odd numbered year a “Red Nose Day” is organized in March. The 9/9 Day of Giving draws support from Tencent’s products’ “connecting” function, connecting the public with public welfare and donors with recipients. It can thus become a source of connection, promoting public service in a genuine way to a greater audience. In order to add a certain amount of weight to the event, Tencent invested 99.99 million Yuan in matching funds, encouraging public charity and participation. According to statistics, during the three days of the 9/9 Day of Giving, the public donated 127.9 million Yuan through the Tencent online platform. A total of 2.05 million people participated and made donations. For China, this represented a record number of online donations and of people donating online. In total, 95 publicly-funded organizations hosted 2178 projects, covering areas of need such as poverty alleviation, student aid, medical relief, assistance to the disabled, women and children, environmental protection, animal protection, preservation of traditional culture, public works projects, humanitarian aid, and social innovation, to name but a few.
From this first edition of the 9/9 Day of Giving, we can gauge the following facts: first of all, NGOs are currently very much lacking money, and they strongly sought after the matching funds from Tencent. There were 2178 nonprofits that heavily utilized social media to mobilize a large number of supporters to donate from the middle of the night of September 7 through to 10 am, in order to receive a higher amount of matching funding from Tencent. On that single day there were 33.33 million Yuan worth of donations for matching funds. Because of this, Tencent quickly revised its rules and began to limit matching funds from public and organizational donations. If Tencent had not revised its rules, 99.99 million Yuan worth of funds could have been matched by the end of one day. “How to Pluck Goose Feathers,” “Three Days Looting for 100 million, Celebrating the 9/9 Day of the “Diaosi” (losers),” “NGOs Raise Money through Stealth”– these article headlines certainly reflect the current state of the nonprofit industry. Additionally, what needs to be considered regarding the programs hosted by NGOs is whether the purpose of fundraising is to solve social problems or to solve the monetary problems of the organizations themselves.
Secondly, as a large-scale online charitable activity organized by Tencent, the 9/9 Day of Giving shows us that capital has started to draw on support from technology, which will influence the Chinese philanthropic sector and the public. We notice that the Internet gives notable outside support to the Chinese nonprofit sector, and we see that technology will have a restructuring effect on Chinese philanthropy. When creating the rules and regulations for the 9/9 Day of Giving, it was decided that donors must have a bank card linked to the Wechat app in order to be able to accept their online or mobile payments. By using the mechanism of matching funds, which mobilized the public and nonprofit organizations to enthusiastically participate in the fundraising, and by adjusting the rules and regulations for these funds, these new rules have created a brand new “arena” for philanthropy. If NGOs and the public want to enter this new arena, they must be ready to adapt.
Thirdly, there were 2.05 million people who donated money during the 9/9 Day of Giving. If we count the number of people who may not have donated but spread news of the event through social media, the actual number of participants is extremely large. Tencent never published any statics or data about these 2.05 million people, but we should still conduct a preliminary analysis of this group. Tencent decided that only the money donated through Wechat and QQ would be counted in the total for matching funds, so we are going to focus on analyzing the Wechat group. According to statistics published in August 2015 by Tencent, the average age of a Wechat user is 26, and 86.2% are between the ages 18-36. The vast majority of users are one of the following: staff of corporations and business enterprises, freelance workers, students, and staff of public institutions. By looking at the distribution of age and occupation of Wechat users, we can roughly estimate that those who donated during the 9/9 Day of Giving were mainly educated people living in a city and belonging to the middle class elite. This group of people is, in fact, currently the key target audience for public fundraising by Chinese NGOs. In this way, we can see that truly mobilizing the entire population for something like the 9/9 Day of Giving will still be a long process.
Academic organizations and alliances for support continue to emerge within the charity sector
2015 is destined to be a year worth remembering for Chinese philanthropic research and education. The Tsinghua University Institute for Philanthropy became the first national-level think tank to focus on the philanthropic sector. On April 26 2015, this institute was jointly established by the Bureau of Civil Affairs and Tsinghua University. The strategic mission of the Institute of Philanthropy is to fully promote research into philanthropy and public welfare and build a system for encouraging talented personnel in the industry.
In April 2015, the Beijing Recende Fundraising Research Center, the Narada Foundation, the Shenzhen One Foundation, the China Foundation for Poverty Alleviation, the Zhejiang Dunhe Foundation and five other organizations jointly set up a member-led alliance for professional fundraisers in the Chinese philanthropic sector. In September 2015, the China Philanthropy Service Alliance was established at the fourth meeting of the China Charity Exhibition. The China Philanthropy Service Alliance (Yilian Alliance) was put together by third party service organizations wanting to support the development of the philanthropic sector, as a kind of complete, comprehensive service for all the different needs in public philanthropy, including human resources, maintaining and increasing value, fundraising services, financial support, legal aid, communication services, IT support, intellectual rights, project evaluation, event planning, and volunteer management.
Under the national policy of promoting public entrepreneurship and innovation, the Chinese philanthropic sector actively encourages the domestic development of social enterprises
Starting in 2014, when China produced a national policy on public entrepreneurship and innovation, social enterprises begun to tackle social problems. They have simultaneously been working to create economic benefit, creating lasting programs that will generate large amounts of interest from the public toward philanthropy. During the past two years, China’s philanthropic sector has started to pay serious attention to social enterprises, and many platforms for social enterprise and social investment have been created one after the other. In 2014, 16 organizations jointly held a symposium for Chinese social enterprises and social investment in order to integrate resources to encourage their development.
That same year, the Youcheng China Social Entrepreneur Foundation, in collaboration with many other partners, launched the first Chinese social investment alliance, following the principles of “building together, sharing together, winning together”. This alliance will connect the government, business, society, and platforms for international cooperation and innovation, and select programs and resources with both a social and business value. On June 18 2015, the first annual symposium on Chinese social enterprise and social investment was held in Shenzhen. During the conference, Xu Yongguang stated that he believes China’s social enterprises and social investment will see four main trends and patterns of development; 1) companies and private non-enterprise units coming together in a common drive; 2) cooperation in the private and public sector between the government and the people; 3) diversified investment from public welfare foundations and private capital; 4) equality and efficiency in social and economic development.[4]
In September 2015, the Peking University Center for Civil Society Studies, the China Philanthropy Research Institute of Beijing Normal University, the Narada Foundation, the Shenzhen Charity Foundation and Development Center, and the Social Enterprise Research Center published “Methods for the Development of Chinese Philanthropy and Social Certifications (Trial)”. This methodization draws on the experience of certification of social enterprises in China and abroad, as well as relevant factors involved in the ISO certification system. The organization’s goals, sources of income, profit distribution, organizational management, and registration information will be the core elements of certification for social enterprises. The organizations that pass the social certification process will receive financial, personnel, and incubation aid and support. In 2015, a total of seven Chinese businesses received the certification, making up the first group of enterprises to receive this recognition.
Public participation and environment-related lawsuits from NGOs become an important avenue of civil action for environmental protection in 2015
In February 2015 Under the Dome, a documentary published by former investigative journalist of CCTV Cai Jing, became extremely popular on the internet. In one respect, this is indicative of the fact that within the public there are others like Cai Jing who have developed an environmental awareness. We can also see from this that the public is paying much more attention to environmental issues. In 2015, the Institute of Public and Environmental Affairs and the Guangzhou Green Network implemented an effective mechanism to mobilize public participation in regards to issues of industrial pollution. The Institute of Public and Environmental Affairs launched a Blue Sky Map application, which compiled all of the government information available about environmental pollution. By releasing this app, public oversight and the power of consumer choice has been broadly mobilized, thus transforming mere data on pollution into viable action. Currently, there are over 2 million people who follow this app. In 2015, the Guangzhou Green Network Center for Environmental Protection focused widespread media attention on an investigative report of China’s Environmental Impact Assessment. This investigative report let the world know about the current disarray of Environmental Impact Assessment in China. One month after its release, the Department of Environmental Protection quickly began special corrective action to rectify its EIA.
The Guangzhou Green Network is not only an organization that overseas the EIA, it also promotes the Green Network— this is a website that has content from over 40 thousand EIA programs as well as their geographical locations. The public can quickly search and find all the places where there is an environmental risk.
In 2015, the new Environmental Protection Law was passed. According to media statistics, in 2015, there were only nine social organizations that acted as the plaintiffs in environmental protection lawsuits. For example, Fujian’s Green Home organization sued as the plaintiff against poultry and livestock breeders in Fujian, Changting County for causing water pollution. The Putian Lvyin Binhai Research Center and Lufa Hui filed as co-prosecutors. In addition to this, there are some social organizations that will file as the plaintiff in public litigation cases that deal with environmental protection. For example, Green Anhui acted as the prosecutor in the case against Changzhou Wintafone, Ltd Co. In 2015, only 14 of the 34 provinces and administrative regions of China accepted public interest litigations concerning the environment.[8] In 2015, Friends of Nature and Fujian Green Home filed the first successful legal case on environmental protection filed by a social organization. The success of this case shows us that environmental protection organizations can utilize public interest litigation to combat pollution.
Many Chinese NGOs are suspected of malpractice, sometimes giving rise to scandals.
The 2015 Charity Law has a provision that does not allow individuals to conduct public fundraising, something which has sparked widespread debate. The Bai’se Student Aid Network incident reveals the shortcomings and problems with individual donations. According to reports, the Bai’se Student Aid Network was founded in 2006 by Wang Jie as an online platform for student financial aid. It was never registered with the Department of Civil Affairs. The incident reflects the difficulties of regulating individual and grassroots level donations and self-regulation in the industry. The network was intended to help solve the problem of students in the area who are unable to go to school. Its existence and mission had been disclosed by the local media. With this understanding, the government, to a certain extent, was tacitly allowing this student aid platform to exist without legal status for nine years.
Because the Bai’se Student Aid Network is located in an area where the development of China’s civil society sector is weak, there is a lack of supervision and regulation among public welfare organizations. The fact that the Bai’se Student Aid Network was able to exist for so long shows that the government and philanthropic sector were both unable to provide any supervision or oversight. According to regulations contained in the Charity Law, organizations that do not have the qualifications to receive public donations or individuals with charitable purposes can collaborate with charitable organizations that do have the necessary qualifications for public donations. The donations collected will be managed and overseen by the qualifying charitable organization. This regulation closes a legal loophole for personal donations, while also providing a legal channel for individuals to initiate fundraising.
By September 2015, media coverage of the Special Starlight Fund of the China Charities Aid Foundation for Children had ended over two years previously, but there were many patients with cerebral palsy who were still waiting for financial aid. Investigation of this foundation revealed that the Special Starlight Foundation raised 1.4 million Yuan and 670,000 donated items. However, the administrative fees and payment to the management team of the funds totalled as much as 860,000 Yuan. In 2013, the China Charities Aid Foundation for Children found out that the money from the Special Starlight Fund had been used up and decided to end its cooperation with the foundation. In the process of making this decision, there were seven issues that were noted about the Special Starlight Fund, including among others lack of planning, being behind on debt payments, poor staff management, non-submitted work reports and unpaid costs related to the foundation.
In actuality, the incident with the Special Starlight Fund revealed certain long-standing regulatory and management issues of the program. According to national law, a foundation is allowed to set up a corresponding special fund. However, these special funds exist in a “black space” that current laws are unable to get involved with. The problems with the Special Starlight Fund had made the government realize that there are a number of such funds that are facing management problems. At the end of 2015, the Ministry of Civil Affairs issued “Notifications Regarding Further Strengthening the Management of Special Funds of Foundations.” It requires foundations, responsible business units, and registration and management bodies to strengthen oversight of these special funds.
NGOs are searching for methods of survival and strategic moves for development within the boundaries set by the government
In August 2015, an essay described as “the most sorrowful essay,” written by a fourth grade elementary student named Muku Yiwumu from the Liangshan Yi autonomous prefecture in Sichuan, led to the demolition of the Suoma Elementary School, founded by the Suoma Charity Foundation of Sichuan. The elementary school had been built in 2012. The organization’s leaders were also called in by the police for questioning. This sparked widespread concern in the philanthropic sector and in Chinese society. In 2015, during a routine inspection of the school in July, the chairman of the Suoma Charity Foundation, Huang Hongbin, saw an essay entitled “Tears” written by Muku Yiwumu, “The food was ready. I went to call Mom, but Mom was already dead.” He shared it on Wechat, and the post was rapidly spread online. Because of this essay, 920,000 Yuan were donated to Muku Yiwumu and the Suoma Foundation. It also led to public criticism of the local government in Liangshan.
Very soon after, the local government published the “Notice of Set Date of Demolition for the Suoma Elementary Due to Illegal Construction”. Following this, under pressure from the public, the Xichang city government held a press conference to announce why the Suoma Elementary would be torn down. Immediately following this, the chairman of the Suoma Charity Foundation received a summons for questioning from the local public security administration. In this way, we see how grassroots-style NGOs are always conducting a challenging balancing act: how to draw public interest to local social problems and implement effective fundraising, while simultaneously maintaining a “tacit understanding” with the local government.
In December 2015, two volunteers from the Nature University and Tianjin Green-Collar who had begun conducting an investigation into industrial pollution in Ningde, Fujian, were taken in by the local police under suspicion of being involved in prostitution. Eventually, the two volunteers were released without charges. Prior to this, the aerial photography equipment of a volunteer from Beijing was confiscated by the Radio Administration Bureau while the volunteer was photographing the state of the environmental protection of the wetlands in Ningde. The Ningde municipal government has been especially concerned about any activity related to environmental groups and organizations because of the impact caused by the media’s exposure of pollution from a local nickel alloy industry and from fraud discovered in the relevant Environmental Impact Assessment (EIA).
Since 2015, many public interest organizations in China have either closed or gone out of business, or even more seriously some of their employees have been held in criminal detention. In May 2015, a women’s rights advocacy organization called the Hangzhou Wei Ming Center was closed. In December 2015, employees of labour organizations such as the Panyu Workers Group Service Bureau and the Foshan Southern Birds Social Work Center were detained by the police for criminal activities. In January 2016, China’s first NGO to specialize in women’s legal aid and research, the Beijing Zhongze Women’s Legal Consulting Services Center (formerly known as the Peking University Law School Women’s Legal Studies and Service Center), announced that it would close on February 1.
These are not isolated cases for rights advocacy groups in China. According to the English publication the Guardian, about half of the world’s countries have adopted restraining measures towards rights advocacy NGOs, and thousands of organizations have been affected. In this world, democratic countries and authoritarian countries alike all exert administrative control over NGOs. The logic behind this is an understanding that developing NGOs weakens the power of the state. According to Tang Hao, in an economically developing country that has concentrated power, controlling international NGOs is needed to maintain the concentration of power. In a democratic country that is economically behind, controlling international NGOs is needed for economic development.[10]
By participating in the relief efforts for the Nepal earthquake, Chinese NGOs have accelerated the process of internationalization
On April 25 2015, an 8.1 scale earthquake struck Nepal. Chinese civil organizations that had gained experience from their work in the wake of the earthquakes in Wenchuan, Yushu, Lushan, and Ludian were first-responders in Nepal, utilizing their strong rescue capabilities. In comparison to past relief efforts by Chinese NGOs, which focused primarily on the donation of money and supplies, this time Chinese organizations participating in earthquake relief were able to implement large-scale evacuation plans, sending many support and rescue teams into Nepal. The Chinese Red Cross, One Foundation, China Foundation for Poverty Alleviation, Amity Foundation, China Social Welfare Foundation, Siyuan China Foundation for Poverty Alleviation, and other associated rescue teams, Blue Sky Rescue Team, and China Women’s Development Foundation participated in the emergency rescue operations.
The China Foundation for Poverty Alleviation, the Amity Foundation, the China Youth Development Foundation, and other organizations participated in post-disaster reconstruction in Nepal. The Chinese Foundation for Disaster Relief, together with the United Nations Development Program (China Office), the Asia Foundation, Save the Children, and other international partners established the “Chinese NGOs Emergency Coordination Response Center for the Nepal Earthquake of 4/25.” The Anping China Foundation for Poverty Alleviation and the Disaster Information Service Center of Zhuoming also provided broadcasts and informational support.
This time, the Chinese government did not place any restrictions on avenues for donations, and many participating NGOs engaged in fundraising in the community. According to statistics from the China Charity Information Center, over 220 million Yuan were raised for earthquake relief, out of which 70% were donated funds, or approximately 170 million RMB.[12] Chinese NGOs’ participation in relief efforts following the earthquake in Nepal also brought to light certain challenges the industry is facing: Chinese NGOs still lack sufficient professional experience in rescue operations; Chinese NGOs lack the ability to adjust to foreign environments; communication and cooperation between Chinese NGOs and local organizations abroad is lacking; Chinese NGOs lack a stable mechanism for cooperation and support amongst themselves.
In April 2015 Ma Che, the Director of the Institute of Public and Environmental Affairs and creator of the “Air and Water Pollution Maps,” became the first Chinese person selected to receive the Social Entrepreneurship Award from the Skoll Foundation. In September 2015, the Yunnan’s Green River Valley Management and Promotional Center was awarded the Equator Prize from the United Nations Development Program. In 2014, the Pendeba Society won this award, making this the second year in a row that a Chinese NGO was selected as the recipient. In October 2015 Yang Dongping, the president of the 21st Century Education Research Institute, was awarded the 2015 Prix Charles and Monique Moraze Prize from France’s “Foundation House of Human Sciences” (Fondation Maison des sciences de l’homme), in recognition of his many decades of work contributing to the promotion of educational reform in China. In 2015 the Compassion Award of the Hong Kong, Macao and Taiwanese Charity Fund was also given to people from Mainland China for the first time. The award was given to philanthropists Deng Fei and Zhe Chengqing.
In 2015, with the support of the Foundation for Disaster Relief Coordination as well as the Institute of Post-Disaster Reconstruction and Management of Sichuan University and the Hong Kong Polytechnic University, Chinese NGOs were represented for the first time at the third UN World Conference on Disaster Risk Reduction. During the conference, the “Sendai Framework for Disaster Risk Reduction for 2015-2030” was agreed upon. In 2015, the UN Millennium Goals Achievement Fund, the China Women’s Development Foundation, and the Sino-American Friendship Association jointly organized an International Forum on Women and Sustainable Development in order to commemorate the 20th anniversary of the World Conference on Women.
Chinese NGOs are rapidly moving onto the global stage, which is not only in keeping with a broader national framework, but also indicative of a maturing philanthropic sector. In 2015, the China Foundation for Poverty Alleviation became registered as a legal international NGO first in Myanmar and then in Nepal. The Amity Foundation set up an office in Addis Ababa, the capital of Ethiopia, making it the first Chinese NGO to open an office location in Africa. It then opened its second overseas office in Geneva, Switzerland. In addition to this, Chinese nonprofit organizations are actively advocating for NGOs to become involved in the broader national framework of foreign aid.
The Charity Law will pass into effect on September 1, 2016. This is China’s first step in creating a comprehensive, foundational law for China’s philanthropic sector and will have an extremely important influence on Chinese NGOs. NGOs will move from the current dual management system to registering directly with the Bureau of Civil Affairs, which will greatly promote the organizations’ development. Requirements for public donations will be fully dropped; organizations that have reached a certain time requirement will be allowed to acquire public funds. Chinese public fundraising will change from its past government-led model to one that is genuinely supported by the people, achieving a market allocation of public welfare resources. Preferential tax benefits are expected to be fully put in place, and nonprofit organizations will be able to get tax-exempt status.
The implementation of charitable trusts will allow the property and funds of private individuals to enter the public welfare sector, bringing large-scale charitable resources into that sector. This income from charitable trust funds will resolve China’s long-standing bottleneck, which has caused a lack of resources and funding for public welfare. From here on, NGOs will have to face much higher expectations of openness, which will raise the transparency and credibility of these organizations. At the same time, regulations in the Charity Law such as those related to online fundraisers setting up an information platform, or foundations with public-funds managing their donations are, to a degree, lagging behind the nation’s current development.
In regards to online fundraising and charitable information platforms set up by the Ministry of Civil Affairs, we must still wait and see whether or not the existing online fundraising platforms will be able to fit into the specified criteria for charitable information platforms. The management fee for public fundraising foundations is set at 10%, which will inhibit the development of these types of foundations. Additionally, in regards to individual soliciting donations, the Charity Law does not restrict people seeking for help, but it sets clear limits for such fundraising.
[1] 2015年4季度全国社会服务统计数据：http://www.mca.gov.cn/article/sj/tjjb/qgsj/201602/20160200880171.htm。
[2] 2015, Fourth Quarter, National Statistics and Data of Social Services：http://www.mca.gov.cn/article/sj/tjjb/qgsj/201602/20160200880171.htm。
[3]徐永光：《社会企业与社会投资的中国趋势》，南都公益基金会http://www.naradafoundation.org/content/4598
[4]Xu Yongguang: “Chinese Trends of Social Enterprise and Social Investment,” Narada Foundation. http://www.naradafoundation.org/content/4598
[5] 顾远：《社企认证有待氛围成熟》，《公益时报》，2015年11月24日http://www.gongyishibao.com/newdzb/html/2015-11/24/content_12698.htm?div=-1
[6] Gu Yuan: “Social Enterprise Certification Waits for the Right Atmosphere to Mature,” China Philanthropy Times, Nov 24, 2015 http://www.gongyishibao.com/newdzb/html/2015-11/24/content_12698.htm?div=-1
[7] 刘蓉：《2015年仅9家社会组织成为环境公益诉讼原告》，《经济日报》，2016年3月22日
[8] Liu Rong: “In 2015, Only 9 NGOs filed as plaintiff in public interest lawsuits,” Economic Daily, March 22, 2016
[9] 唐昊：《全球化时代的“权力扩散”，金砖国家如何管理境外NGO》,《凤凰周刊》，2016年第3期
[10] “The Age of Globalization and “Diffusion of Power,” How Brazil, Russia, India, and China Manage Foreign NGOs,” Phoenix Weekly, 2016, No. 3.
[11] 中民慈善捐助信息中心：《4.25尼泊尔强震捐赠报告》，2015年5月12日。
[12] China Charitable Donations Information Center: “Report on Donations of the April 25 Nepal Earthquake,” May 12, 2015.
[1] 董强 中国农业大学人文与发展学院副教授、博士。
[2] Dr. Dong Qiang – Associate Professor at the College of Humanities and Development Studies of China Agricultural University.
