'Mothers in law' stifle charity
It was a wonderful idea - a martial arts king asks the 700 million mainland mobile telephones users to donate 1 yuan (HK$1.16) a month for good causes, raising 8 billion yuan a year and creating the country's largest private charity. That was three and a half years ago and Jet Li, the man who set up the One Foundation, is ready to throw in the towel.
'We have no independent status and cannot realise our ideal,' he told national television last month. 'It is like a child of three years with no identity who cannot go to school. My hair has started to turn white. I have spent every minute thinking of how to achieve my objective. Everyone you talk to, from individuals to government leaders, believes that charity is good but there is no way to resolve the problem.'
Li's decision to air his frustrations in public set off an intense debate about the future of private charity in China. Like other NGOs, Li's foundation has to go through an official body - the Red Cross - and cannot operate as an independent entity. Why can the government not allow charitable institutions as in other countries and regulate them by law?
'The issue is money,' said Liu Hongbin, a legal consultant in Hong Kong. 'The government wants to control philanthropy as it controls tobacco. Both are too lucrative to give up. It is also an issue of transparency. Hongkongers gave billions to the victims of the Sichuan earthquake. Where did the money go?'
For its part, the government argues that allowing people to raise money from the public would open the way to fraud and theft, as has happened in direct marketing. It also argues that state control of charity is essential to preserve social stability and prevent organisations that could be used against the government.
In the Republican period, China had many NGOs, domestic and foreign; after 1949, they were closed or taken over by the government. They re-emerged in the Dengist period and blossomed after the NGO Women's Forum in Beijing in 1995.
According to figures from the Ministry of Civil Affairs, the mainland had 430,000 registered social organisations by the end of last year, including 1,843 foundations, of which 991 were public, like the Red Cross in each province, and the rest private.
To become legal, a foundation or NGO must find a 'mother-in-law', a state agency to which it is attached, before it can apply to register with the ministry. People refer to these as Gongos (government non-government organisations).
The actual number of NGOs may run into millions. Their scope of activity has expanded greatly from the traditional areas of women, environment and poverty relief into Aids, legal assistance, the handicapped, orphans and juvenile delinquents and spread from the cities to rural area.
Many NGOs refuse to have a 'mother-in-law' because they fear that it will interfere in their management or steal their money. By not registering, they are 'grey' or 'illegal' and vulnerable to police action.
The government remains suspicious of NGOs, especially those from abroad. An article in Study News, published by the Central Party School in 2006, on foreign NGOs said that some aimed to carry out 'peaceful evolution' and 'velvet revolution' - overthrow of the party by peaceful means. It sees foreign NGOs as having played an important role in the overthrow of communism in Eastern Europe and the Soviet Union; they had access to civil society denied to foreign governments. The government fears organisations which have a nationwide network but are not under official control.
Among mainland NGOs, the One Foundation has been one of the most successful in attracting money and official support. Li set it up in April 2007, to donate money to disaster relief, poverty, health, education and environment projects. He took a leave of one year from his lucrative acting career to devote his energies to it. It raised substantial sums after the 2008 Sichuan earthquake and the mudslides in Gansu this year, greatly helped by Li's popularity and high profile.
According to its last annual report, the foundation had, from its inception until June 30, 2009, received 170 million yuan, 88 per cent in cash and 12 per cent in goods. Of this, 41 per cent came from individuals and 59 per cent from other sources; the average for other foundations is just 20 per cent from individual donors.
Of the 170 million, it received 122 million for reconstruction after the Sichuan earthquake and 48 million for other projects.
As of June 30, 2009, it had spent 74.56 million yuan, of which 57.8 million went on Sichuan earthquake projects. It said that management and collection expenses were 1.95 million yuan or 2.5 per cent of spending, well within the limit as prescribed by the fund management regulations. But, while it can raise money, it cannot control it - by law, its bank account is controlled by the Red Cross.
'All donations received will be deposited directly into the account of the Red Cross Society of China, earmarked for use by the Jet Li One Foundation Project,' reads its website. 'The Red Cross will disburse funds and the Jet Li One Foundation Project will oversee all expenditures to ensure accountability and transparency in the use of donated funds for their intended purpose.'
Each application for funding has to be approved by a six-member committee, of which two come from the Red Cross and two from the One Foundation. After the Sichuan earthquake of 2008 the foundation proposed the projects and the money came through the Red Cross account.
The Wenchuan earthquake in May 2008 produced the greatest outpouring of public charity and volunteerism since 1949, with a flood of people and goods to the stricken and people queuing to donate blood. One newspaper even ran a headline 'Out of the earthquake came a new China.' According to ministry figures, three million volunteers from 263 NGOs and 63 foundations went to provide food, health, medicines and other services. A total of 500,000 people gave money to the One Foundation.
Ran Yunfei , a Chengdu author and social activist, said that this outpouring after the earthquake had helped spur a rapid growth in NGOs and at the same time closer government surveillance, with the closure of four NGOs last year and the introduction of new legislation to limit funding from abroad.
In July this year, after the Yushu earthquake in Qinghai , the government issued a regulation saying that the 13 anti-poverty funds seeking to aid victims had to donate the money to accounts of the provincial government, the Red Cross or the Charity Association, for them to distribute.
'Of the money given to the Wenchuan victims, 80 per cent went to government organisations,' said Ran. 'This was not good. Local governments are corrupt and divert money and do not make public their accounts. The central government needs local governments to maintain order so it turns a blind eye to local governments making money out of charity.
'Since 2008, NGOs have gone to work at the grass roots level in the cities and the villages. They are a challenge to the local government, because they are more efficient in their work and are driven by charity and not money,' he said. Foreign NGOs which have set up offices on the mainland are bound by the same rules and must also find an official 'mother-in-law'.
Li Xun, a professor of social science and one of the founders of an NGO, said that foreign NGOs had no option but to compromise with the government and provide funds to official organisations or officially controlled NGOs.
Critics say that government laws and regulations have fallen far behind the growth in civil society and philanthropy and that never has there been a time in China's history in which people and companies are more willing to donate.
Dr Victor Wang, chief executive of MTone Wireless and one of the pioneers of the mobile network industry in China, said that capital was not a problem in China. 'Many businesspeople want to contribute to charity but do not find good, credible organisations and so do not have the desire to continue. Civil organisations do not have the ability.'
In the end, Li's plea for independence fell on deaf ears. Last month the One Foundation signed a new contract with the Red Cross that will enable it to continue operating - with its 'mother-in-law'.
'We hope the day will come when we can be an independent entity,' said a spokeswoman for its office in Beijing. 'This is the hope of Mr Li.'