Private foundations will soon overtake government and nongovernmental organizations as the main source of charity in China, research has shown.
Sponsored by the Ministry of Civil Affairs and several charity groups, a report compiled by China Charity Information Center said private charitable foundations will play an indispensable role in the country's charity activities.
Under the new company income tax law, charitable donations of less than 12 percent of a firm's total annual earnings are tax-free. They were formerly subject to 3 percent tax.
In five years' time, the most influential foundations in China will be privately run, the report said.
Also, because of a national joint promotion involving municipal governments across the country, and media publicity, the public is becoming more enthusiastic about charity, the report said.
More celebrities are getting into the habit of giving, too, it said.
In 2006, pop diva Faye Wong and her husband Li Yapeng launched the Yan Ran Angel Foundation. Named after their daughter, it aims to help children under 14 years who have a cleft palate.
The couple donated 1 million yuan ($138,000) to start the foundation in collaboration with the Red Cross Society of China.
In the next three to five years, as government control of private foundation enrollment loosens, a large number of new foundations is expected to be established, the report said.
The number of local foundations is also expected to increase because of more favorable policies. In Jiangsu province, by the end of 2006, there were 81 foundations, up 93 percent on the year before. Some organizations in Shanghai and Jiangsu have capital in the hundreds of millions of yuan, the report said.
The number of private foundations is growing rapidly. At the end of 2006, China had 795 public foundations, up more than 3 percent year on year, and 349 private ones, up more than 71 percent, the report said.
There are now more private foundations in Beijing, Tianjin, Jiangsu, Gansu, Fujian and Hainan than there are public ones.
The information center's research was conducted over three months last year and was based on 2006 figures.