Report reveals transparency of China’s top corporate foundations

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In recent years, as the public became more aware of charitable work, Chinese enterprises began to explore ways to fulfill their social responsibilities. Apart from direct donations and organizing employee volunteering, many companies have set up their own foundations.

In order to examine the transparency of corporate foundations during the past year, the Foundation Transparency Index (FTI) reviewed the top 500 companies in China.

FTI is a tool developed in 2012 by the China Foundation Center and the Center for Integrity Governance Research of Tsinghua University to reflect the level of self-regulation and transparency of the foundations in China.

The index is designed based on laws and regulations such as the Charity Law of China and the Measures on Information Disclosure of Charitable Organizations, covering information disclosure of foundations in four areas — namely governance, finance, projects and fundraising.

The results show that in 2022, 101 companies (about 20 percent) of China’s top 500 companies have established corporate foundations.

Among the 101 corporate foundations, 53 foundations (52 percent) have their official websites that can be accessed effectively — a higher rate compared to 31 percent (2,561 out of 8,220) of all foundations nationwide that have official websites with open access.

Also, compared with the overall situation of the foundation industry, among the top 500 corporate foundations, the average score of FTI 2022 is 71.05, and the median score is 74.47, higher than that of all reviewed foundations across the country (average score: 58.98; median score: 54.40).

Despite all these, since most of the FTI indicators are compliance indicators that were mainly designed according to the compliance requirements of relevant laws and regulations, a high FTI score is only the starting point for boosting the transparency of China’s foundations and eventually the whole charity sector.

In terms of charity information disclosure, China’s Top 500 corporate foundations are expected to play an active leading role — leading more corporate foundations to attach importance to charity information disclosure and jointly push for a more transparent charity sector.