Caixin
Oct 30, 2020 06:31 PM
POLITICS & LAW

Experts Call to Loosen the Rules Strangling China’s Charities

Charity organizations collect materials bound for the frontline workers of Hubei province in Fuzhou, East China's Fujian province, Feb. 3.
Charity organizations collect materials bound for the frontline workers of Hubei province in Fuzhou, East China's Fujian province, Feb. 3.

Dozens of experts have written to the Chinese government calling for an overhaul of the country’s Charity Law, claiming excessive regulation is undermining the work of philanthropic organizations.

The move comes after statistics collected over several years indicated slowing growth in China’s charity sector and persistently low public interest in philanthropy.

In a set of recommendations submitted to a law enforcement group affiliated with China’s national legislature, more than 60 high-profile members of the country’s academic, political and business sectors wrote that the law in its current form is “impractical” and gives rise to “over-regulation.”

They argue that officials in charge of enforcing the law should adopt a more hands-off approach so that charities have more freedom to operate. The number of newly registered charities has declined every year since the law came into force, from 3,450 in 2017 to just 1,017 last year, statistics show.

“Over-regulation is seen as one of the most important reasons why the development of charitable organizations has been hindered since the implementation of the Charity Law,” the experts write. “These methods run counter to the objectives and stipulations of the Charity Law and in practice undermine it.”

Philanthropic groups in some sectors complain of “hardline” rules that prevent them from using charters that depart from official models, appointing legal representatives on a part-time basis and paying social service workers more than twice the local average salary, the recommendations say.

They advocate a review of a perceived culture of excessive bureaucracy and interventionism among law enforcement officials, which they claim stops charities from operating efficiently, puts them under pressure and makes them feel distrusted.

The experts argue the shortcomings of the law, which took effect in 2016, are directly related to the slow growth of social organizations, the comparatively small number of charities in China and a decline in the growth rate of charity donations.

China had around 6,000 registered charities by the end of last year, accounting for less than 1% of the total number of social organizations in the country.

Additionally, evidence suggests the law has done little to increase public donations to charity. No more than 27% of all donations to social enterprises in China in a given year come from private individuals, according to Wang Zhiyun, president of the Shanghai United Foundation, a philanthropic group.

Total donations to social organizations have remained largely steady since 2016, hitting a peak of 152.6 billion yuan in 2017 and falling to 127 billion yuan a year later, according to China’s Blue Book of Philanthropy, an annual record of charitable giving in the country.

The reputation of China’s charity organizations suffered a blow this year after vast numbers of public donations to groups working in Wuhan, the city at the center of the country’s Covid-19 outbreak, failed to immediately relieve acute shortages of personal protective gear for frontline medical staff.

Contact reporter Matthew Walsh (matthewwalsh@caixin.com) and editor Gavin Cross (gavincross@caixin.com)

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