The ‘Foundation Supervision Regulations’ were issued in June of 2004, opening the door to the non-governmental funding and establishment of private foundations. In November of that same year, the fourth Plenum of the 16th Central Committee put forward their “social construction” concept. It was then that private foundations – one of the completely new type of social organisations that rely on funding and autonomy – began to play an important function in social construction. However, due to the experiences of previous years, the development of foundations stagnated. The official introduction of the new Regulations didn’t really see quick results. Those who were enthusiastic recipients of charitable funding were excited by these developments but also remained cautious, watching and waiting to see what happened. The fixed degrees of the design of the dual management system also placed new restrictions on registration. Consequently, even at the time of the first anniversary of the launch of the Regulations, some provinces still didn’t have a single newly registered private foundation. Furthermore, even in some of the more developed areas such as Zhejiang and Shanghai, the newly set-up foundations only operated in a relatively narrow band of sectors: mainly the two large areas of education and poverty alleviation.
At the same time, the effective control and supervision of the newly established foundations also turned into a pressing issue. The 2006 sixth plenum of the 16th Central Committee set the tone with its message of “construct a harmonious society”. A series of guiding policies appeared in the public welfare field: charitable laws were drafted, and the ‘Foundations Annual Inspection Methods’ and ‘Foundations News Announcement Methods’ laws were issued. These “Two Methods” were established so that they could in the future become an important foundation for the development of transparency in foundations.