More transparency vital to restoring faith in Chinese charities

Internationally, there are few charities as venerable and respected as the Red Cross. On the mainland, though, the organisation is distrusted, in part for being closely tied to the government, but mostly due to the microblog boasts two years ago of a young woman named Guo Meimei, who appeared to be an employee with extravagant tastes. Although the organisation has denied any connection, it has been unable to repair the damage or change perceptions that it mishandles donations. Regaining trust is not about pledges and promises, but genuine transparency and accountability.

Proving how much public confidence in the Red Cross Society of China has fallen, donations to the relief fund for the April 20 Sichuan earthquake are minuscule compared to amounts being given to other charities. A day after the quake, the society had received about 140,000 yuan (HK$176,000), a fraction of the 22.3 million yuan taken by movie star Jet Li's One Foundation. Sensitive to the anger, authorities have lessened the society's role, putting it in charge of only half of aid funds.

The society had a solid reputation until the massive 2008 Sichuan quake. Huge amounts of donations were claimed to have gone missing and the organisation, as the government's main charity vehicle, was at the heart of the furore. Then came scandals involving accusations of expensive staff lunches and use of funds by a top official to buy personal items. Sandwiched in between was the even more damaging postings by then 19-year-old Guo of her life of luxury, seemingly confirmed by photos of expensive cars and handbags. The society has dismissed it is in any way connected to the woman, yet rumours that she is linked to one of its senior staff persist.

Compounding troubles, fresh anger has been sparked over the society's recent admission that tens of millions of yuan donated by artists after the 2008 quake for specific projects was diverted to other schemes. A full investigation of the Guo case has been promised and will begin this month. Done to public satisfaction, that will help, but it is only the start of the long process of rebuilding trust. Widespread mainland corruption and the government's insistence on controlling charity work and its setting of limits on what private foundations and non-governmental groups can do are also problematic.

Charities have to be as open and transparent as possible. But perceptions will not dramatically shift until the government takes a hands-off approach to their work. Donor confidence requires independence, competition and full public scrutiny.