Press Room

Helping China Learn How Not to Run a Charity Organization

 

Charity in China is down on its luck as citizens become increasingly cynical in the wake of a slew of high-profile scandals.


Last year, China’s 1.3 billion plus people donated roughly $8 billion dollars, down almost 18% on the previous year, according to data from the Ministry of Civil Affairs.


In contrast, Americans donated close to $300 billion in 2011—up slightly year-on-year despite harsh economic conditions—according to a recent report by the Giving USA Foundation and the Center on Philanthropy at Indiana University.


Now, Chinese foundations are tapping American nonprofit organizations for help in whipping Chinese foundations into better shape.


As part of an agreement announced last week, US-based nonprofit Give2Asia will donate one million yuan (more than $150,000) to China Foundation Center, a Beijing-based registered public charity.


CFC will use the money to develop an eight-day training program aimed at between 30 and 50 senior staff from Chinese foundations. The first session is slated for kick off first half of next year.


“This is an investment to help ensure the long-term health of the foundations we want to support in the years to come,” said Ta-lin Hsu, chairman of Give2Asia and chairman of private-equity firm H&Q Asia Pacific.


The program is a modest step toward overcoming some enormous problems facing China’s charitable foundations, a good number of which are viewed by the public as being opaque and corrupt.


One contributing factor to the sector’s poor reputation has been the speed at which foundations have emerged in China: The country has 2,700 foundations, almost a quarter of which were established in the past five years alone. Most of the new foundations are privately run.


CFC chairman Xu Yongguang traces the recent surge to a policy change in 2004 by Beijing that encouraged greater private participation in the private sector.


“The government understands that many of the rich can help it achieve improvements in areas such as healthcare, education and poverty elimination,” he said, noting that China still has around 200 million people living on less than $2 a day.


According to the Hurun Rich list, China is home to 251 billionaires this year, or 20 less than last year’s list but up massively compared with six years ago when there were just 15 billionaires.


Many of the country’s new charitable foundations lack experience and are almost always run by the wealthy — often headstrong — individuals that set them up.


“China’s rich are so confident in their ability to make money they think they are good at spending it, too,” Mr. Xu said in an interview. “Many of these wealthy people have the old-fashioned idea that they can play God and scatter cash around,” he said.

 

Often, these stubborn, self-made types only succeed in humiliating and alienating the very people they intend to assist. Take, for example, recycling magnate and controversial mainland Chinese philanthropist Chen Guangbiao, who last year turned off many in the Chinese-speaking world by handing out envelopes full of cash at a “donation ceremony” in a Taiwan auditorium.