Caixin Weekly | Why Are Charitable Fundraising Efforts Being Strangled? (AI Translation)

财新周刊｜公益筹款缘何“卡脖子”

[para. 1] The Da Ai Qing Chen Fund, a public welfare project providing financial aid to pneumoconiosis patients, has suspended operations due to the inability to extend its registration number. Established for over 13 years, the fund alleviates medical expenses for farmers, offering up to 10,000 yuan each. Over 600 patients monthly benefited from this fund. However, since January 1, 2023, the nationwide suspension has directly affected more than 10,000 aid instances. This predicament is not isolated, as various charitable organizations have faced suspension of fundraising due to the expiration of public fundraising activity filings. In total, over 30 public welfare projects have announced suspended fundraising, covering education, healthcare, poverty alleviation, and environmental protection sectors.[para. 2][para. 6]

[para. 3] The controversy stems from new regulations under the revised "PRC Charity Law," effective September 5, 2024. These stipulate that fundraising activities must be filed separately and each organization with public fundraising qualifications must oversee their collaborators closely. Despite no explicit limit on filings or joint fundraising, organizations report confusion and inconsistency in filing processes across regions, causing fundraising disruptions.

[para. 4] A survey in December 2024 revealed that around 90% of charities need re-registration due to expired files. The majority faced difficulties, with only 5% not encountering issues. Some managed re-registration post-2025 Lunar New Year by switching partners. Still, many face hurdles, with halted fundraising affecting the ability to cover rent and staff costs, leading to potential project downsizing or suspension. Moreover, January's onset brought a complete halting of new medical assistance applications for pneumoconiosis patients in need.

[para. 5][para. 7] Regulatory tightening is reportedly a reaction to past scandals, such as the China Charities Aid Foundation for Children’s embezzlement case. These incidents spotlighted the need for stricter supervision in the charity sector. Nevertheless, a balance between necessary regulation and operational vitality remains unresolved. Some organizations experienced a drop in income and social resource mobilization capability amid stringent scrutiny.

[para. 8][para. 9] Criticisms target the increased precautionary stance of civil affairs departments in the transitional policy phase, a response to past negative public opinion. Unclear national guidelines have led to varying implementations and the introduction of higher filing expectations in some regions, further complicating project filings.

[para. 10] A report from over 30 organizations in December 2024 highlighted that monthly donations, a crucial fundraising source, would pause. This type of donation provides stable operational funding. Grassroots organizations often lack substantial donations or commercial backing, relying heavily on these monthly contributions.

[para. 11][para. 12] The shutdown of monthly donation mechanisms and ensuing financial strain posed survival challenges for grassroots organizations. With limited funding, maintaining operations without monthly donations seems unfeasible for many. Organizations, having already compressed costs, find no room for further cuts. The halt forces them to reconsider and potentially prioritize projects with higher fundraising potential at the expense of innovative ventures.

[para. 13][para. 14] Grassroots organizations, dependent on collaborations with public foundations, face heightened pressure. The new regulations necessitate more detailed project execution plans and oversight, prompting some foundations to scale back or refrain from cross-regional cooperations, further stressing grassroots entities.

[para. 15][para. 16] Public foundations themselves are navigating self-examinations in light of stricter responsibilities for managing partnerships and adhering to new guidelines. Many are reassessing their operations, shifting from general fundraising efforts to more targeted project designs in response to regulatory demands.

[para. 17][para. 18] Despite these challenges, experts see potential benefits if regulations are internalized and not overly restrictive. Current lack of positive interaction between administrative bodies and charity organizations, alongside historically low ethical barriers, impedes optimal charity sector standardization.

[para. 19] Breaking the stalemate requires clear administrative understanding of responsibilities and organizational adaptation. Only through proactive governance adjustments and collaborative regulator interactions can the charity sector reconcile standardization with vitality, ultimately achieving mutual objectives in the nonprofit landscape.