Charity's audit report falls flat

PUBLISHED : Thursday, 13 October, 2011, 12:00am
UPDATED : Thursday, 13 October, 2011, 12:00am


The government-backed China Charity Federation issued a belated audit report on Tuesday that details salary levels and administrative fees it charges on donations, but the move fails to dispel deep-rooted scepticism towards officially sanctioned NGOs.

In its audit report for 2010, the charity says it had 48 employees earning an average of about 40,800 yuan (HK$50,000) a year, and that the head of the federation, Fan Baojun, earned just 48,000 yuan last year in the form of allowances.

The report shows the federation, the second-largest charitable group on the mainland, accepted 8.55 billion yuan in donations last year and spent 7.05 billion yuan on charitable work. Administrative fees took up 7.61 million yuan, accounting for just 0.11 per cent of its charitable expenditures - far below the cap of 10 per cent allowed under state regulations.

A federation official told The Beijing News that they normally did not charge fees on money received from first-time donors, and that staff salaries were much lower than most people believed. For example, he said, seven members of the federation's accounting department earned an average of 31,800 yuan a year.

Online users were not appeased by the audit report, and some dismissed the statistics as nonsense.

'An annual pay of 48,000 yuan? This is so low that it is no wonder they are forced to covet donation money,' Professor Xu Xiaonian, who teaches economics and finance at Shanghai's China Europe International Business School, wrote on his microblog.

The heightened public distrust towards charitable groups such as the China Charity Federation came after Guo Meimei, a little-known actress, showed off her luxurious lifestyle in photos online while claiming to be the head of a non-existent business arm of the Red Cross Society of China. Though Guo retracted her claim, she triggered a massive drive to expose irregularities at charities.

The federation is being investigated over claims that it took 50,000 yuan last year from a solar panel company in return for tax-free donation receipts while the panels stayed in the company's warehouse.

Tsinghua University Professor Jia Xijin, who specialises in NGO studies, said the credibility of a charity was not entirely judged by the level of administrative fees it charged on donations, and that government-backed NGOs were special as they also received state funds to cover administrative spending and their employees were treated as civil servants.

Jia said the public's distrust reflected a lack of transparency at such NGOs, and the federation should break down its expenses and staff incomes further instead of providing broad figures. 'The salary levels for civil servants in China are low, but the amount of their take-home pay is a far different story,' she said.