Scandal-hit organizations should improve transparency and efficiency to regain people's trust and donations

This year has seen a crisis of trust hit China's charity system, as many scandals have been exposed and stirred great controversy. Because of this, it is high time that we thoroughly reflect on the work of the country's charities.

When news related to philanthropy has appeared, it has always drawn much greater attention from Chinese people than similar cases have from people in foreign countries. This tells us two things: people here are in greater need of charity, and/or they want their charities to be more transparent.

There is no doubt that transparency is the foundation of a sound and sustainable system of charities. When it exists, people are more likely to donate and the needy have more hope that their plights will be eased. However, China's philanthropic causes are still hampered by relatively low levels of transparency.

On July 2, a man named Li Yidong helped to raise 80,000 yuan (about $12,400) at a charity auction in Beijing through the Angel Fund, which is affiliated with the Chinese Red Cross Foundation (CRCF). The sum, according to conditions set by Li and former Miss World Zhang Zilin, who put a teapot up for the auction, was to go to Zhang Shiliang in Hunan province for his daughter's leukemia treatment.

However, Zhang Shiliang was later told that he would get only a one-off payment of 30,000 yuan. Zhang's complaint, presented on a micro blog, triggered widespread concern. CRCF spokeswoman Li Jing then said it was a misunderstanding and that staff had forgotten to cross out the "one-off" terms on the form sent to Zhang Shiliang. Angel Fund has since said that, according to its rules, it will pay the girl's medical expenses and any surplus money would be kept to treat others of suffering from the same disease.

Naturally, people may say Zhang's family should get all of the money and worry about the cumbersome procedures and confusion.

The complicated procedures and rules that ignore donor's requirements are major barriers to promoting the transparency of charities. To improve the situation, charities should release all data related to donations in a timely manner.

Charities must also improve their efficiency, as a recent case in Fujian shows.

Two years ago, Su Tiantian began suffering a disease that caused her stomach to swell to five to six times its normal size. On June 14, the local Red Cross branch opened a special account to raise money for her treatment and it received 50,000 yuan.

Due to unforgivably poor efficiency, the local Red Cross branch finally completed it accounting and administrative procedures, and notified Su's mother on Aug 15 that she could withdraw the money. Unfortunately, Su died on July 11.

Naturally, this episode also angered the public.

To start improving transparency and efficiency, the Ministry of Civil Affairs has established a new regulation requiring organizations to make timely releases of information related to their fundraising, projects and distribution of donors' money.

But this is more of a beginning than an end, and we still need to make great efforts to push forward reform of our charities, especially given that, in many cases, corruption bedevils efficiency and transparency.

For example, China Charity Federation was recently accused of mishandling 15 million yuan in corporate donations and charging extra cash fees for management when donations were in the form of goods. However, according to the Beijing Times, insider Luo Fanhua said the extra charges were actually the sale of invoices to donors seeking tax breaks.

On top of this, the now infamous Guo Meimei, who was the self-proclaimed "business general manager for Red Cross Society of China", caused much controversy. In her micro blog, she proudly displayed pictures showing off her extravagant lifestyle.

Of course, no charity can withstand such a black mark on its name, whether it deserves it or not. After the scandal, public donations to the Red Cross' Shenzhen branch fell to nearly zero in July. The branch in Foshan, also in Guangdong province, had raised more than 889,000 yuan between June last year and June this year, but got nothing in July.

This is proof that we must reform the government-led philanthropic model. Charities can maintain their trustworthiness only if they maintain a certain distance from administrative power. The government should abandon its management and involvement in charities, but strengthen its supervisory role.

Meanwhile, non-governmental charities should be encouraged and administrative barriers to their operation removed.

Fundamentally, this is a question of whether a sense of philanthropy can be fostered among China's citizens. Such a sense is based on the assumption that all people should have access to society's limited resources. Only on this basis can charities make a difference.

Clearly, we still have a long way to go.

The writer is with China Daily.

(China Daily 10/08/2011 page5)