Charity has developed substantially in recent years in China but it has also been stricken with controversies and concerns over a low level of transparency and the necessity for reforms.

Nearly four years ago, a powerful earthquake devastated counties in Southwest China's Sichuan province, and this evoked a nationwide tide of donation.

However, charities have not yet become fully ingrained in Chinese society, and annual contribution figures may differ widely, depending on a variety of factors, including catastrophes, a government monopoly of charitable foundations, a low level of efficiency and transparency.

In 2008, mainly because of the Wenchuan earthquake, the total sum of donations nationwide surpassed 100 billion yuan ($15.83 billion), but it dropped to 54 billion yuan the next year. People are sometimes perplexed and angered by scandals such as misuse or embezzlement of donations. Even the reconstruction of quake-hit Wenchuan and several other counties was not exempt from such irregularities.

After more than 3 years and 1.7 trillion yuan in spending, the reconstruction and development efforts in the quake-hit areas were largely completed early this year.

But this focus on philanthropy has also been clouded by negative news. According to a report by the National Audit Office on April 20, irregularities were found in 63 reconstruction projects — involving 26 construction units, four surveying and design departments and eight project supervision divisions.

The irregularities include construction projects being undertaken without proper feasibility reports or environmental impact reports, excessive investment, random changes of construction plans, and some companies not upholding standards, using inferior materials and illegally subcontracting projects.

This rekindled controversy about the low level of transparency of charity foundations and the use and distribution of donations in China.

The cause of charity in China has so far been problematic, with confidence in public foundations affiliated with the government shaken by scandals, while people and private foundations face strict regulations and a complicated examining process for fundraising. The lesson to be learned is that substantial progress must be made in overcoming these systematic obstacles as soon as possible, said Wang Zhenyao, director of the Philanthropy Research Institute at Beijing Normal University and a former director of the Social Welfare and Charities Division of the Ministry of Civil Affairs.

We need much more public participation in any post-disaster reconstruction. Especially people who made considerable donations should be invited to join reconstruction projects, supervision and auditing, Wang says.

Auditing, for example, has so far been entrusted to government auditing departments and thus is done behind closed doors. Without the process being made public, audit results could generate controversies.

In Wang's opinion, to introduce post-disaster reconstruction experience from other places, professionals from charity organizations should have been invited to join the reconstruction commission in Sichuan. Those professionals, serving as representatives of donors' wishes and interests, could help to coordinate between all sides concerned and make the whole process of reconstruction transparent. This could further promote the cause of philanthropy among the public — in particular, those who made large donations could gain insight into how and where their money had been spent throughout the whole process, rather than seeing only the final results, issued by the government.

However, though Wang's words sound great, the idea may not be easy to realize. Past practice, including recently in Wenchuan, shows that the whole auditing process is entrusted to official audit authorities, with few people from charitable foundations with government backgrounds, like the China Red Cross Foundation, being invited to join the auditing process. Occasionally, famous public figures with professional skills have been invited to take part. Taking these factors into account, great coordinating efforts must be made in carrying out Wang's ideas.

Wang concedes the possibility of objection from the government. He thinks that some government officials are under the illusion that government alone can do well-coordinated and efficient reconstruction work, and therefore, if corruption cases could be ruled out, it's unnecessary to invite the public to participate.

Reciprocally, people can also become increasingly uneasy when they have difficulties learning where and how their donations have been used to help the needy, he stresses.

In Wang's opinion, if public participation had been introduced, some misunderstandings wouldn't have occurred in Wenchuan.

For example, regarding projects constructed with excessive investment (not including individual cases that violate government rules), Wang thinks the high cost came because there was no public participation early on, and not because the buildings were better built than in other places.

An important notion to uphold for such great reconstruction work is that construction must maintain advanced standards so that even after 20 years, the buildings are as good as new projects in other places. It's totally wrong to carry out reconstruction with mere restoration as the final goal, Wang says.

And that's also why public participation should be invited. Only by realizing this, can the public and the whole of society distinguish between advanced standards and embezzlement.

As the total sum of China's charity fund increases year by year, efforts are needed to regulate its use and auditing.

For the completed reconstruction work in Sichuan, the province received about 20 billion yuan in donations for quake-relief, and donations have been co-managed by the provincial charitable union, the provincial branch of the Red Cross Society of China and the provincial financial department. This donation management system lacks convenient ways for donors to see whether their wishes were met.

Most funds are raised from the public, and therefore public supervision should also be introduced, says Fang Haizhou, who holds a doctorate from the School of Public Finance and Taxation at Zhongnan University of Economics and Law.

To improve auditing work, the following factors should be taken into account:

First, pre-auditing announcements should be posted as soon as possible, with audit targets marked, audit procedures detailed and means of contact publicized.

Moreover, the result of auditing should be used for further improvement of donation usage. On this point, institutions being audited should first be notified of the results of the audit, which in return will help in accumulating experience and facilitating the adoption of measures for future audits.

Audit results should also be reported to local governments in a timely manner so that proper policy improvements and adjustments can be made for the development of charity.

And the results should also made public to the society, as a major step to improve transparency, increase charitable foundations' social influence, and raise social awareness for philanthropy.