China's charity sector needs transparency to gain public trust

11:05, August 03, 2011      

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As the public is gaining a greater say in social affairs, they will vote with their money, which will eventually force China's charity system to mature from the bottom up.

The Red Cross Society of China recently launched a pilot online platform to disclose donor information. Although the platform has many problems, such as limited information, it is an encouraging step for the organization to become more transparent and regain public trust. The public needs to show some understanding because the organization is too big, and many problems, such as weak technical capacity, take some time to fix.

The online platform is a result of public pressure in a sense. The public distrust in the Red Cross Society of China is the epitome of the difficulties facing China's charity system.

According to the "Measures for the Information Disclosure of Foundations" promulgated by the Ministry of Civil Affairs in 2006, information about the donation activities organized by public fund-raising foundations should be released to the public. However, the fact is that there are more than 2,000 charitable foundations in China, but many of them do not have official websites. Certain local foundations do not even release annual reports, not to mention financial reports.

The long-term opacity has damaged the credibility of charitable organizations and hurt the public's enthusiasm for welfare. Recently exposed events ran contrary to the ideal of what charitable organizations should be. They showed society's consciousness of public charity and rights rising while transparency was absent and society's need for charity has been expanding while public distrust has been rising.

In this sense, the Red Cross Society of China's move can also be regarded as the directional choice of the future of China's philanthropy.

Transparency aims at accepting supervision. Corruption, such as forced donation, fraudulent donate and black box operation, will be eliminated only through opening the operation of raising and using funds to rebuild donators' trust toward charitable organizations and form the charity culture. In addition, this is also a kind of self-protection for charitable organizations. Otherwise, it will be developed as Hong Kong Red Cross secretary-general said, "An accident may be fatal."

More importantly, the "monopoly fund-raising" mode will inevitably give way to the competitive "fund-raising market" along with the development of times. Transparency will directly affect the trust level of public, entrepreneurs and even executives of government "purchase" and will also directly decide the amount of funds. Once the public becomes the subject of choice, they will force the whole philanthropy to become mature by voting with their money.

Charity institutions are faced with such a selection of the market. Cao Dewang, chairman of Fuyao Glass Corporation, made transparency and execution the top criteria in selecting the executive agency of his donations, which totaled 200 million yuan. The "Love Package" project of the China Foundation for Poverty Alleviation raised 180 million yuan of donations thanks to its transparency in the publicity of donation receipts and the feedback of donation recipients.

The transparency in the market must come with "quality assurance." Information disclosure needs to have uniform standards and classification, and the boundary between mandatory and voluntary information disclosure must be set; it should hire third-party institutions to audit the authenticity and authority of the information disclosed. Therefore, the Red Cross Society of China and the entire charity sector still have a long way to go in terms of information disclosure.

The Chinese people have never lacked the enthusiasm for charity. This awakening and outpouring of enthusiasm was shown when Internet users employed the microblogging platform for charity work, such as providing children in the mountain areas with free lunches and the "banana action," a group purchase-based charity activity, which sold more than 500 tons of bananas within 10 days. Charity institutions can only rebuild their images and restore confidence through all-around openness and transparency. Otherwise, they will surely never see such enthusiasm.

By Jiang Yun from People's Daily Online, translated by People's Daily

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