Clear charity rules can boost giving

PUBLISHED : Sunday, 05 August, 2012, 12:00am
UPDATED : Wednesday, 15 August, 2012, 11:03pm


Mainland China has more than 10 per cent of the world's billionaires and 1.4 million households with assets of at least US$1 million. Despite the ever-growing wealth of its people, though, they are among the world's least giving, being near the bottom of global lists for charity and philanthropy. Creating a culture of helping the needy takes time when the concept of being moneyed is relatively new, but it has not been helped by a series of scandals involving charitable organisations. Rules unveiled in the past week to improve the transparency and accountability of such groups should go a way towards creating a more caring society.

Charities will have to publish regularly details of donations and expenditures on the Ministry of Civil Affairs' website. They will be barred from being involved in profit-making activities, and operating costs will be capped at 10 per cent of annual expenditure. Donations cannot be used for administrative expenses unless authorised by donors. Violators will be disqualified or punished.

The rules are tough but necessary. Funds were embezzled from several charities last year, harming the reputation and work of foundations and non-governmental groups. The ministry stepped in to review the rules after a public outcry over a woman who falsely claimed to work for the Red Cross Society of China and posted photos of herself online with expensive cars and luxury handbags. That incident led to a marked drop in confidence in charities and has been blamed in part for a fall in donations.

As necessary as the requirements are, though, authorities should not interfere in the work of charities. Officials have a record of keeping a tight rein on civil society to prevent challenges to their authority. NGOs are already burdened by regulations on how they receive foreign assistance. Overly tight controls will further impede their ability to do their work efficiently and effectively.