Suspect charities face new shake-up

PUBLISHED : Sunday, 17 July, 2011, 12:00am
UPDATED : Sunday, 17 July, 2011, 12:00am

A crackdown is looming for rogue charities that require compulsory donations or fix donation quotas, as a wave of public activism uncovers more misconduct among philanthropic groups on the mainland.

The tough action is among initiatives laid out by the Ministry of Civil Affairs in a blueprint for improved charity work via greater transparency and the rule of law. Guidelines were released on Friday, after a five-day public consultation period.

Official statistics show that mainland charity groups received a record 100 billion yuan (HK$121 billion) in donations in 2008, after a devastating May 12 earthquake in Sichuan province. The scale of the disaster triggered an unprecedented outpouring of aid, which in turn cast a spotlight on a lack of transparency and code of ethics at some charities.

More recently, intense public scrutiny, including a high-profile online campaign, has focused on the Red Cross Society of China (RCSC), the biggest charity organisation on the mainland.

The public outrage stems from a web posting by a young microblogger named Guo Meimei, who claimed to be general manager of the 'Red Cross Chamber of Commerce' while showing off luxury cars and designer handbags late last month. It turned out she had faked the title and the organisation did not exist; police have also ruled out any direct link between her and the RCSC.

But the public furore did not die down. Internet activists continued to investigate and uncovered murky deals between Red Cross China Business System - a business arm of the RCSC - and several private businesses, including one in which Wang Jun, allegedly Guo's boyfriend, reportedly has a stake.

The campaign underscores ubiquitous discontent with the RCSC and other mainland charities. Irregularities implicating the RCSC, founded in 1904 and which oversees 95,000 subsidiaries, have come to light. Driving school students in Chongqing, Ganzhou in Jiangxi province, and Kunming in Yunnan province are required to pay their regional RCSC branch up to 90 yuan for so-called first-aid training, though they do not actually take any classes.

An official from a provincial RCSC branch admitted to the Shanghai Morning Post that they imposed the fees - just as many other RCSC subsidiaries did - to make up any shortfall in charity funds.

In Chengdu, Sichuan, cab drivers are forced to promote a Red Cross 1 yuan donation scheme to passengers and must cover the losses if they fail to raise 100 yuan within a fixed period.

And in the latest revelation, the Hefei Evening News reported yesterday that the RCSC Wuhan branch acquired 1.3 hectares of land in 1993, through a central government scheme, to build a disaster relief warehouse. However, it leased the lot to a private company for 100,000 yuan a year from 1998, and that firm in turn leased the land to other tenants from 2005.

Meanwhile, the China Red Cross Foundation (CRCF), a RCSC subsidiary, admitted running a charity scheme in which a Beijing-based medical equipment supplier donated ultrasound equipment to more than 100 hospitals.

In return, the hospitals must pay up to 600,000 yuan each to the foundation.

The CRCF raised about 61 million yuan via the scheme, it said in an audit report. It gave the supplier 50.6 million yuan and kept the rest.

The foundation claimed the equipment was worth 5 million yuan. Shanghai-based National Business Daily accused it of inflating the price of the equipment from 120,000 yuan, an allegation that the CRCF rejects.

Professor Jia Xijin, of Tsinghua University's NGO Research Centre, said the pricing of the equipment should be evaluated by an independent institution and the details subject to public scrutiny.