Charity law will give donors greater confidence

Scandal involving the Red Cross in China shows that legislation which encourages – even demands – transparency will boost philanthropy

PUBLISHED : Tuesday, 26 July, 2016, 1:11am
UPDATED : Tuesday, 26 July, 2016, 1:11am

The mainland Red Cross is linked to the government rather than affiliated with the International Red Cross, which must be thankful given the former’s tarnished image, but also dismayed by the reflection on the name of an organisation that depends on trust to carry out its humanitarian mission. It is good therefore that just three months after passing a law to revive philanthropy by wealthy Chinese that lapsed with the rise of state ownership, the National People’s Congress has now turned its attention to the Red Cross law to safeguard its image from further smears.

Draft amendments, tabled recently, target spreading of false information, financial misconduct, impersonation and misuse of the Red Cross brand. Offenders risk administrative punishment or even criminal prosecution.

Beijing to change law to punish any person or group that harms image of Red Cross Society of China

This is a reminder of how the public was scandalised in 2011 when a woman called Guo Meimei flaunted luxury goods online while claiming to work for the organisation. She was later jailed for five years for operating an illegal casino. Her claim may have been found to be false but the damage was done, and compounded when the mainland Red Cross was found to have redirected earmarked funds to other projects without the consent of the donors, and by perceptions that it mishandled donations.

Most importantly, for the peace of mind of donors, the draft says the Red Cross should set up mechanisms to independently audit and monitor its funds and assets, and be transparent about donations. Lawmakers should call for the amendments to spell out how these changes should be implemented. That would help set the stage for the Red Cross to cut its dependence on and links to the government. Loss of confidence in the mainland Red Cross highlighted the need for a modern legal framework and regulation to ensure the trust essential to vibrant charity and philanthropy. The mainland’s first charity law seeks to tackle the lack of trust and clarity, and recognises the value of civil society in helping to address social issues that stretch government resources.