The Guo Meimei Incident and Grassroots NGOs

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This essay by Yu Fangqiang recounts the various scandals that hit China’s philanthropy sector in 2011, and takes grassroots NGOs to task for remaining on the sidelines during this period and not taking a more public stance in promoting transparency and accountability in the sector. Yu’s message is reminiscent of another recent CDB article that criticizes NGOs for staying on the sidelines during environmental protests.

The soon to be over summer has not been as hot as in the years before. Three months ago, those people in Benghazi were still ‘rebels’, Shaxian Xiaochi was planning a master game and Biden was lying in bed trying to decide if he really wanted to try local delicacies in Beijing. On Weibo, Miss Guo Meimei was quietly exhibiting her Maserati and Hermes. Unfortunately for her, the posts were reposted tens of thousands of times.

Following that was the story we all know now. The Guo Meimei incident has caught more attention than that of Lai Changxing and the CRH train accident, and was accompanied by the story of her ‘good sister’ ‘Lu Meimei’, which dug up some dirt on the China Youth Development Foundation (中国青少年发展基金) ((Editor’s Note: Lai Changxing was a private entrepreneur from Fujian who bribed more than 300 officials during the late 1990s in what became the biggest smuggling ring in the history of the People’s Republic of China.  “Lu Meimei” (or what some call Guo Meimei II) is the name used tongue-in-cheek by netizens to refer to Lu Xingyu, the 24 year old daughter of billionaire Lu Junqing.  Lu Junqing is founder of the World Eminence Chinese Business Association (WECBA) and acting chair of the China-Africa Hope Project which works with the China Youth Development Foundation (a GONGO with close ties to the Communist Youth League that started the well-known Project Hope in China) to build 1000 Project Hope primary schools in Africa.  The Lus, WECBA and the China-Africa Hope Project caught the attention of skeptical netizens and the media in the summer of 2011 when it was revealed that Lu Xingyu was made the executive chairwoman and secretary general of the multibillion dollar Project.  Allegations of nepotism and the status of WECBA and its raising of funds for charity quickly followed.  For more about the WECBA, see below.)). These events were then followed by the exposure of the charity hoax of the China Charity Federation (中华慈善总会) and the scandal involving loans worth billions of yuan by the Henan Soong Ching Ling Foundation (河南宋庆龄基金会). The summer temperature has fallen to freezing – public donations have only been at ten percent of the level of the previous quarter ((Editor’s Note: The China Charity Federation was accused of mishandling 15 million yuan in corporate donations in August of 2011.  The Soong Ching Ling Foundation was reported in November of 2011 to have embezzled donations to invest in a real estate deal. All of these scandals involved high-profile GONGOs with close ties with the government.  As the author suggests below, this gave grassroots NGOs a reason to celebrate.)).

If it were the stock market, then it would be either hitting the bottom or bouncing back by this point. Nobody with large amounts of cash or stocks would leisurely light a cigarette and watch the stock indicies.  Yet with regard to NGOs, it was quite a different situation. GONGOs worried that they would be the next targets, while grassroots NGOs were sitting in the stands ready for a show. One side was panicking yet reluctant to sell while the other was secretly enjoying the scene yet with no intention to buy. It was quite a harmonious scene unprecedented in a market economy.

It seems that all of these events never occurred. First, I’ve never seen any of those disappearing donations anyway. Second, I was too busy making ends meet myself. After all, we are just second-class NGOs.

The intellectuals and media couldn’t keep their cool though. In the media, no effort was spared in replaying the whole thing, headline after headline, commentary after commentary.  Yet, as it is said in Chinese, different professions are worlds apart. When talking about the World Eminence Chinese Business Association (世界杰出华商协会), the intellectuals and media said ‘it’s actually a private company’ ((The WECBA is a Chinese organization registered in Hong Kong whose income came from management fees for charity fund and membership fees from people that desire access to government leaders.  A portion of these fees were to go to charitable purposes such as the China-Africa Hope Project of which the WECBA is a founding organizational member, but WECBA was criticized in the Chinese media for not being registered in China; and (2) not being registered with Civil Affairs as a social or charitable organization.  The comment “it’s actually a private company” refers to this criticism that the Association was not so much set up for charitable purposes but for profit-making purposes.)).  When talking about charitable organizations, they said all charity organizations in China are government organizations. When talking about information transparency, they said ‘that’s hard to guarantee through internal self-discipline and moral regulation alone’. When talking about donating to charities, they said ‘I don’t care if you donate or not, I definitely will not!’

Despite all this chatter, we grassroots NGOs exist in a happy and peaceful state, posting job announcements (with specific salary unmentioned because it’s too low at the risk of being penalized by the Labor Bureau), hiring volunteers (they are practically free anyway), and holding conferences (nobody knows what good comes out of those countless so-called training and exchange seminars). It seems that grassroots NGOs are a tight-knit group, closed but neither excluding nor embracing the outside world.  It’s like a monastery; all you see are the monks.

There were some media who listened to voices coming from the people. They interviewed some organizations and scholars. Those who were interviewed, however, were either NGOs registered with Ministry of Civil Affairs or scholars having close ties with GONGOs. Therefore, it became obvious that during the reporting of the Guo Meimei affair, these commentators were laymen trying to speak like insiders.  They were people within the system reflecting on the system itself ((Editor’s Note: The  term “within the system” (tizhinei) is sometimes used by Chinese to describe those who are inside the government-supported system, such as universities and GONGOs, whereas grassroots NGOs are “outside the system” (tizhiwai). The author here seems to be suggesting that those “within the system” cannot speak for those “outside the system”.)). As a result, the total four million NGOs received a black eye due to the actions of a mere 400,000 NGOs that are officially registered with the Ministry of Civil Affairs ((Editor’s Note: The author is obviously adopting the perspective of grassroots NGOs here in arguing that the voices of China’s four million grassroots NGOs have not been heard in the public’s respond to the scandals.  The contrast between the four million grassroots NGOs with the 400,000 legally registered NGOs is also overdrawn.  The number four million is a very high estimate of the number of grassroots associations in China and includes many self-help, mutual-aid associations that engage in cultural, recreational, technical and professional activities on behalf of their members.  In other words, the vast majority of these grassroots associations do not engage in charitable or philanthropic activities.  In addition, just because a NGO is legally registered does not mean it is not independent.  A number of the 400,000 legally-registered NGOs — including well-known NGOs such as NPI, Friends of Nature, and Facilitator – have a strong grassroots pedigree.)).

Perhaps, this is just the normal state of being for Chinese grassroots NGOs because we have always been passive, negative and easy targets for bullying. We had to wait for an event like the once-in-a-hundred-years earthquake to be able to show a good collective image in front of the public.  [Editor’s Note: The author is referring to the Sichuan earthquake of 2008 which provided a public stage for grassroots NGOs to show their worth.]  Not willing to, not knowing how to, and not daring to speak up has always been our weakness. When we are right, we don’t often speak. When we are wrong, we don’t want to speak. In public, we talk as if facing a CCTV camera. In private, we talk like shrews.

Speaking is indeed an art, but it’s about how to speak.  Lying is undoubtedly bad. Not speaking is definitely an attitude, and an altitude that is against the basic ethics of NGOs, whose responsibility is to give voice to groups of people when the government or legislator cannot. If you don’t speak up, it means you don’t want to represent their interest, or you actually represent the silent majority. Given the tripartite social governance model of ‘government-market-civil society’, not speaking up would be tragic.

Therefore, when nobody spoke, like everything else that happened in China, the athletes retreated to the locker room and the judge came onto the field. He took out the draft of “Guidelines for Disclosure of Charity Donation Information” 《公益慈善捐助信息 披露指引》(Guidelines henceforth). He cited a few paragraphs and said they were going to straighten things out—just like what some government office said about the real estate market a few years back. Then he patted the heads of the people from the Red Cross and left the field.

Tianxiagong (天下公) has suggested raising the legal status of the Guidelines, but it is actually a dilemma. On one hand, whether donation information should be disclosed to the public should be determined by the market and NGOs themselves. The Ministry of Civil Affairs  inappropriately played the role of an athlete ((Editor’s Note: The author seems to be saying here that Civil Affairs should not be involved in regulating information disclosure in the charitable sector.)).  On the other hand, the charitable sector has indeed reached a critical moment. If there is no collective response and if the enforcement of the Guidelines is not enhanced, once the public finds out it’s no more than just a fancy façade, the charity sector that four million NGOs have been devoted to will be on the verge of complete collapse ((Editor’s Note: The author argues that the Ministry of Civil Affairs faces a dilemma.  Given the scandals in the philanthropy sector, Civil Affairs felt it had no choice to respond by issuing guidelines encouraging greater transparency and accountability in the philanthropy sector.  But, as the author notes, these guidelines are only guidelines and are not legally enforceable and thus will not have the desired effect of strengthening the public’s trust in the philanthropy sector.  At the same time, the author questions whether Civil Affairs should be in the business of setting financial disclosure guidelines for NGOs.  Is this an area that should be left to the marketplace and to NGOs to address?  Finally, the author goes a bit too far in suggesting that four million NGOs are engaged in the charity sector, and that the charity business will collapse.  As mentioned above, most of China’s grassroots associations are not engaged in what we could think of as “charitable” work.)).

Tianxiagong chose to do the latter by trying to promote collective action. But unfortunately this view was not heard in public.  Only when different voices from NGOs are heard by the public, can the public start to question and think. Public discussions can also help answer questions such as ‘can NGOs be private firms’ and ‘are there non-government NGOs in China’. I believe that, in this transitional time of Chinese society, an NGO’s most important role is to make the public think.

Unfortunately, the Ministry of Civil Affairs said later that the Guidelines only received 200 pieces of feedback—with the word ‘only’ added by me. Yet Miss Guo Meimei, now extremely well-known, took the opportunity to enter into the entertainment business, and claimed to donate her future income to charities. What a ridiculous situation.

I think, this is both the best and worst time for Chinese NGOs, but by no means a time to stand by and watch.

In Brief

This essay by Yu Fangqiang recounts the various scandals that hit China’s philanthropy sector in 2011, and takes grassroots NGOs to task for remaining on the sidelines during this period and not taking a more public stance in promoting transparency and accountability in the sector
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