China yesterday published a new regulation on the management of charitable foundations. The new rules allow foreign charities to set up offices on the mainland but they cannot engage in fund-raising activities or accept donations.
The regulation is mainly aimed at strengthening the management of such foundations. It lays down specific guidelines - covering personnel to the use of funds - for these organisations.
A major difference between the new regulation and its predecessor is a significant increase of the threshold of registered capital.
Under existing rules, foundations require only 100,000 yuan in capital to register. The new rules raise the amount to 8 million yuan for national foundations with public fund-raising activities. The threshold for regional foundations is 4 million yuan and the amount for foundations that do not raise money publicly is 2 million yuan.
The regulation comes after a number of charitable organisations - including the nationwide Project Hope Foundation - faced allegations of misuse of donations. Auditors later found the allegations mostly unfounded.
One article of the new regulation states that foundations must use the donations raised only for the purposes for which the money was raised. 'In organising and accepting donations, foundations must follow the objectives and scope of charitable activities they promote in their charters,' it says. 'Representative offices of foreign foundations cannot organise fund-raising [activities] or accept donations in China.'
