Fostering the growth of China's charity sector

China recently marked the first anniversary of the May 12 earthquake which claimed nearly 90,000 lives. While mourning for the dead, people are paying more attention to the development of the nation's charitable sector. Wang Zhenyao, director of the Ministry of Civil Affairs' newly founded Social Welfare and Charity Promotion Department, discussed these issues in an interview with 21st Century Business Herald, extracts from which we present here:

Q: Charitable donations in the first quarter of this year declined sharply to 4 billion yuan compared with 107 billion yuan a year earlier. Can you explain this? Is this due to the economic downturn?

A: Public concern over the drop in donations is understandable. But rather than being concerned about the decline, we are more focused on how to use the money we actually have.

The amount of donations is one side of the coin, the other side is how charities operate.

At present, policies calling for greater transparency in the charitable sector are being put forward. The diversification of charitable projects and cooperation between charitable organizations are also important issues.

As for the economic downturn, it may be a good opportunity for charities to play an even greater role in society. At a time when some companies are in trouble, charities could help them with employment and training.

Q: Some people have expressed concerns about donations intended for the victims of the May 12 earthquake. Did some government departments record the donations as operating expenses or other expenses irrelevant to people's lives soon after they receive the money?

A: On the one hand, the relevant auditing system is very strict. On the other hand, there are more laws and regulations governing the charities. I cannot completely promise what you said will not happen, but it is very difficult for this to occur.

In providing quake relief, some donations were remitted to local government accounts. But we have not found anyone who recorded donations as local fiscal revenue. In fact, areas such as Hainan province, Inner Mongolia autonomous region, Xinjiang Uygur autonomous region and Tibet autonomous region directly remitted the donations to the earthquake-hit areas.

Q: Was it the case that some of the donated money was directed to infrastructure construction projects dominated by the government?

A: That is up to the donors and charities. It is inevitable that the government will dominate the planning of infrastructure.

However, there should be connections as well as differences between the projects of charities and the government.

Infrastructure or hardware construction is important, while some small and specific human problems should also receive attention.

For example, the principals of some earthquake-hit schools, which received huge donations for reconstruction, cried because the day-to-day problems of teachers and students, which only require a small amount of money, had been neglected.

People really wish the charity organizations could change their ways of working. Small projects which truly meet the needs of people are also very important and do not require administrative approval.

Q: When compiling a charity list recently, the Philanthropy Times, a newspaper affiliated to the Ministry of Civil Affairs, also revealed a blacklist naming the companies that failed to pay their promised donations. What do you have to say about this?

A: China's charities have advanced by leaps and bounds, especially in fulfilling their donation promises.

Charitable organizations have the right to sue companies that fail to deliver on their donation pledges, but the key to solving these problems lies is professional standards as well as a sound public information system.

Q: After the May 12 earthquake, China Charity & Donation Information Center under the Ministry of Civil Affairs established an information platform (http://www.donation.gov.cn) covering major charitable organizations. Is this intended to promote professional standards? Will charities established in the future be included in the platform?

A: Yes, but the system is not mature in terms avoiding the repeated counting of donations. Organizations are encouraged to join the platform so they can discuss professional standards and information transparency.

Q: The sharp increase in donations after the May 12 earthquake reflects the government's great ability to mobilize people. But doesn't this mean that there is a blurred boundary between government and charities. What is your opinion?

A: In the initial stage of the charitable sector's development, it is hard to say whether government involvement is good or not. If governments promote charitable causes, I think that is good.

The government's promotion of charity should focus on providing platforms, and donations should be used in accordance with industry standards.

The development of China's charities ultimately relies on charitable organizations since the power of the government in this field is limited.

(China Daily 06/01/2009 page8)