September start date set for China’s first charity law
The mainland’s first charity law was approved by the national legislature on Wednesday and is due to come into effect in September.
The legislation approved by the National People’s Congress lays out details on registration, fundraising and government oversight of charitable groups.
It promises tax benefits for charitable activities and tightens scrutiny of such groups’ internal management.
The regulatory framework is expected to boost public confidence in the sector after a series of scandals.
It is also expected to increase donations to needy causes. Despite having the world’s second-largest economy, China ranked 144 among 145 countries for charitable behaviour in a survey by non-government organisation Charities Aid Foundation.
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The legislation retains a controversial ban on donation appeals by individuals. The NPC’s legal committee had said such appeals were seen as personal requests for help rather than charity.
Instead, individuals can work with registered charities to solicit public donations.
Any money or goods contributed must also be managed by the charities, according to the new rules.
The legislation sets a cap on annual management fees for charities at no more than 10 per cent of an organisation’s income for that year, a clause that was opposed by many experts and non-govermental organisations.
In an effort to embrace the internet age, the law stipulates that charities making online appeals should do so through their own sites or those designated by civil affairs authorities.
Charities that rely on public donations should each year spend the equivalent of at least 70 per cent of the previous year’s income or 70 per cent of the average over the previous three years.
Donors are also allowed to renege on a donation if their financial status “seriously worsens”.
The new law also designates September 5 as Charity Day in China.
