Pay-to-donate charity scandal

PUBLISHED : Thursday, 18 August, 2011, 12:00am
UPDATED : Thursday, 18 August, 2011, 12:00am

The credibility of mainland philanthropy - already tarnished by scandals involving its largest NGO, the Red Cross Society of China - has received another blow, with its second-largest group, the China Charity Federation, also hit by controversy.

The federation has been accused of issuing receipts for solar panels worth 15 million yuan (HK$18.3 million) to a solar panel company, even though the panels were still in the donor's warehouse, according to mainland media. The federation received a handling fee of 50,000 yuan.

Only large charity funds endorsed by the government can issue such receipts, which allow donors to enjoy tax deductions. Central China Television said the receipts for 15 million yuan would be able to save the donor 2 million yuan in tax.

The reports sparked an outcry.

The federation confirmed it had issued the receipts on April 15, but said the federation needed the 50,000 yuan fee for administration. It said the amount was the result of negotiations with the donor - Suntech Silicon Solar Technology in Wuxi , Zhejiang - and that the federation usually charged a 3 per cent handling fee for cash donations.

But the scandal deepened yesterday. CCTV revealed that Suntech had, in conjunction with the federation, been donating solar panels to schools for the past four years, but when CCTV called the recipients of last year's donation it found that 200 schools had only received one solar panel each, even though the donor had promised to donate 3,700 panels said to be worth 17 million yuan. And CCTV quoted a former deputy manager of the Suntech subsidiary in charge of the distribution as saying that the missing panels had been sold for 5.9 million yuan.

Federation secretary general Liu Guolin told CCTV that he was not sure if the solar panels donated last year had been sold, but promised to conduct an investigation, and pleaded with the public to allow charity organisations to 'make mistakes'.

Professor Wang Ming, from Tsinghua University's Non-governmental Organisation Research Centre, said: 'Our government should make rules to demand all NGOs improve transparency.'