Zhongguo ci shan fa zhan bao gao (2013) = Annual report on China's philanthropy development (2013)
Annual report on China's philanthropy development (2013)
中国慈善发展报告 (2013) = Annual report on China's philanthropy development (2013)
Annual report on China's philanthropy development (2013) 2012 was a year in which philanthropy in China broke boundaries, widened its horizons and started collaborating with a range of social resources to promote domestic social reform.
The most striking feature of philanthropy in China during 2012 was the transformation of a web-based micro-blog social movement from initial concern with social assistance and social accountability toward citizen freedom of association and a search for social fairness.
In 2012, internet micro-philanthropy created a substantial movement for care and assistance and highlighted new web-based social alliances for care and compassion. These activities blended with an upsurge in reform of the registration system for social organizations in many locations and naturally led to organization for citizen freedom of association. Web-based micro-philanthropy also transformed into off-line philanthropic alliances which drew on rational thinking and the awareness of ordinary people. A large number of bottom-up grassroots-style organizations were spawned and developed into a wave of civil society organizations searching for autonomy.
By year-end 2012, China had 492000 social organizations, a 6.5% increase over the 2011 figure (462000), and the most rapid annual increase since 2009. These social organizations included 268000 social groups (representing a 5% increase over 2011); 221000 private non-enterprise units (representing an 8.3% increase); and 2961 foundations (a 13.3% increase), with private foundations outnumbering public fund-raising foundations. Moreover, there were over 70 public fund-raising foundations, like the Shenzhen One Foundation, which did not have intermediary organizations providing managerial oversight. In addition, there were more than 200000 mass organizations recording with urban communities. The total number of officially-registered social organizations did not include grassroots-style social organizations in many locations, some of which had joined the philanthropy incubators supported by local governments. These social organizations grew significantly in on- and off-line public spaces and initiated a genuine movement for social reform in China.
The level of philanthropic accountability exerted through web-based micro-blogs in 2012 surpassed that of 2011. It targeted the limitations of government-backed social organizations and extended beyond the scope of philanthropy to address issues of accountability in public power and network corruption. For example, a micro-blog assistance activity was initiated in response to the labor reform camp detention of "Petitioning Mother" Tang Hui. A huge web-based discussion was generated around abolition of the labor reform camp system and this directly spurred legal processes for its termination. In another example, Sichuan, Anhui, Zhejiang and other locations experienced resident on-line struggles that ultimately led to government agencies in those locations cancelling polluting investment projects. Further instances included public opinion on students taking university entrance exams outside of their local area; doubts over the public child assistance system following the deaths of five boys in Bijie, Guizhou; the role of civil society environmental organizations in launching public monitoring data for PM2.5 particulate matter; web-based investigations into "Uncle House" in Pan Yu and the demolition of graves in Zhoukou, Henan. These all exemplified calls for social fairness that subsequently evolved into social movements to protect social justice, and which resulted in the promotion of social policy change and an improved social system. In so doing, these examples also highlighted citizen use of micro-philanthropy to exercise their powerful social rights. Moreover, the micro-philanthropy movement also further alerted government to the accumulation of various economic and social problems over the years, particularly relating to land expropriation, housing demolition, planning, urban management, environment, housing, and so on. These problematic areas directly affected public benefit and resulted in concentrated outbursts during 2012 that also evidenced the scale of social conflicts and of web-based social movements. They also spoke to a serious loss of social fairness and of just social policies that had tested public tolerance to the limit. Public social movements had truly become a pressure and a force for government to deepen economic and social reform and move toward more equitable and just social policies.
The second characteristic of the philanthropic sector in China during 2012 was the development of mutual support between government at central and local levels and a nascent civil society. This was a response to social need which drew on social energies to create appropriate responses and to maintain momentum in promoting a series of new social policies.
Firstly, they liberalized the registration system for social organizations. In 2012, a number of local governments, including Guangdong, Shanghai, Beijing, Shandong, Yunnan, Zhengzhou, and Shenzhen had carried forward the 2011 introduction of new policies for registering social organizations and experiments in removing the two-tier process for registration and management of social organizations. These actions greatly contributed to the March 2013 central government decision to permit four different types of philanthropic social organizations to register directly with the Ministry of Civil Affairs without first securing a second-tier intermediary sponsor organization.
The second change was in greater leeway for piloting rights relating to public donations. Guangdong and then Shanghai began formal implementation of regulations governing donations, strengthening recording of donations, appropriate reductions in entry conditions, stringent requirements for transparent donation disclosure and above-board practices, which together served to both liberalize and better regulate donation rights in China. These changes hinted at future forms of government legislation, management and monitoring aimed at promoting donation rights under conditions of fair market competition.
The third change was the administrative reform of government-backed social organizations. Local governments in Shanghai, Beijing, Dalian, Shenzhen and other localities undertook useful experiments in this regard. Beijing Municipality proposed that government employees should be gradually phased out of philanthropic organizations to create fair competition in the field of social philanthropy. Shenzhen City Government separated the functions of government and society by cancelling the hierarchical administrative relationship between its City Civil Affairs Bureau and the City Philanthropy Association. This was a first step in the administrative reform of the China Philanthropy Association system.
The fourth change was central government clarification on the status of the field of philanthropy. The report of the 18th Party Congress stated that "it is necessary to accelerate the promotion of social system reform and the formation of a social management system under the leadership of the Party, the supervision of government, the cooperation of society, participation of the public and secured through legislation; to accelerate formation of a social management system that differentiates the roles of government and society and rights and responsibilities, and a modernized system of social organization that is based on legal autonomy". The Standing Committee of the National People's Congress promulgated the revised Civil Procedure Law and the Criminal Procedure Code, which incorporated a public interest litigation system into the Civil Procedure Law for the first time. Domestic environmental organizations were able to bring pioneering public class actions on behalf of affected parties in Qujing City of Yunnan Province and Guiyang City of Guizhou Province against polluting enterprises. The Criminal Procedure Code was revised to establish the principle of "respect and protection for human rights." This foreshadowed a big step forward in the legalization and guarantee of citizen rights and the creation of public space and a legal basis for the development of public benefit endeavors. The Ministry of Civil Affairs has clarified a guiding management mechanism for disaster relief donations and recommended that, in future, government shall cease designating philanthropic organizations to take receipt of relief donations. The State Bureau of Religious Affairs and associated ministries and commissions jointly publicized Opinions on Encouraging and Regularizing the Participation of Religious Figures in Philanthropic Activity to promote the mainstreaming of religious philanthropy within the wider field of social philanthropy.
The fifth change was that in government procurement of services from social organizations. In 2012, the central government established an inaugural public finance assistance mechanism to strengthen the cultivation and support of social organizations. A budget of CNY200 million was designated for a demonstration project to support the development of social organizations, to undertake a social service pilot project, and demonstration projects in social work services and personnel training. A total of 377 projects would be supported annually and over 120 training sessions conducted to train 17700 people. The project would mobilize CNY320 million in social funds, and directly benefit 1.85 million people. Local governments and agencies in Guangdong, Shanghai, Zhejiang, Shandong, Hunan, Sichuan and Yunnan also began to produce regulations and utilize dedicated funding to support the development of social organizations. Policies for government procurement of services provided social organizations with important opportunities for development and also steep challenges in terms of management capacity and competitiveness.
The third outstanding characteristic in 2012 was continued testing of different groups within the philanthropic sector. The huge public outburst over philanthropic accountability in 2011 showed no signs of relenting in 2012 and left the whole sector facing a credibility crisis. Both social accountability and market competition intensified and this stimulated a wider public understanding that civil society in China needed a diverse ‘philanthropic ecology,' a huge number of grassroots organizations to cover the whole country, and sufficient formally registered philanthropic organizations which were also of the highest standard. It was necessary for the philanthropic sector to complain less and undertake more improvements that increased self-awareness and action.
The Chinese Red Cross drew attention from government and the public. In 2012, it clarified its role and status in terms of three powers; it accepted a special national law, a statutory body of the international Red Cross movement, and voluntary public donations. It would undertake a governance reform based on its local volunteers and public transparency and an approach which balanced social power and public power to rebuild its public credibility.
A high quality national philanthropic network: The 2012 China Charity 100 (CC100) Forum convened its Fifth and Sixth Forums in Taiwan and Hong Kong respectively and discussed religion and philanthropy, and cross-sector cooperation. A total of 112 philanthropic organizations jointly launched a United Action for Transparent Charity. Private foundations and some public charity foundations also collaborated in the Fourth China Private Foundation Development Forum and discussed trust, capacity, value creation and other new topics. The China Youth Development Foundation, the China Foundation for Poverty Alleviation, the China Red Cross Foundation, the China Social Welfare Foundation and other public charitable organizations supported the development of grassroots groups through social contracting and promoted the formation of philanthropy industry linkages. The various charitable organizations experienced a new level of pressure for competitiveness and accountability that was conducive to the promotion of improved management and innovation within the sector and the pro-active acceptance of change.
The fourth outstanding characteristic in 2012 was the rise of third party research, dissemination and monitoring services.
Following from the establishment of the Research Institute of Philanthropy at Beijing Normal University in 2011, Tsinghua University, Beijing University of Science and Technology, Shanghai University, Sun Yat-sen University and Nanjing University all established philanthropy research institutions during 2012. Again following from the first China Philanthropy Development Report (the Philanthropy Blue Book ) in 2008 and the publication of the first Investigation Report on the Third Sector in 2011, 2012 saw the publication of the Social Innovation Blue Book, China Philanthropy Development Report, and the Corporate Social Responsibility Report, which reflected the rise of annual reporting on philanthropy and greatly improved conditions for its research. Philanthropy became a hot topic for different types of in-depth media reporting and CCTV released three big productions which publicized philanthropic ideas in 2012; Dream Choir, Fighting for You, and Neighborhood Hero. Famous internet companies Tencent, Sina and Baidu all moved from covering philanthropy to engaging in it and established charitable donation sites; in 2012 the Foundation Center website formally produced the China foundation transparency index, the first independent, third party evaluation system for domestic philanthropic organizations. Advanced, neutral, and high quality media and third party monitoring services provided and important guarantee of a high quality and effective philanthropic sector and led the industry in a healthy direction.
Incomplete statistics indicated that domestic social donations to the philanthropic sector totaled CNY 70 billion in 2012, a decline of roughly 17% over the year-end 2011 figure of 84.5 billion.
Three reasons explained this relatively large drop in the total amount of 2012 donations:
The first impact arose from economic downturn. The 2008 international financial crisis had also affected the Chinese economy and government responded by increasing monetary supply and undertaking huge investments. An economic surge occurred in 2009-2010, but the effect of government supplanting the market led to a range of problems that emerged in 2011 and became explosive in 2012. Over 80% of the sharp injection of new capital flowed into state-owned enterprises and local government debt financing platforms. Resource costs and management efficiency in the state economy were very low and declining. The private enterprise economy, and particularly private manufacturing industry, faced pressure from high interest rates, currency appreciation, escalating labor and transaction costs, that produced a slump and contraction in major associated employment markets. State economic penetration and the retreat of the private economy significantly and negatively affected social donations sourced from private enterprise and the populace.
Secondly, 2011 witnessed an accountability crisis which stemmed from the government-backed social organizations and affected all of the formally registered social organizations. Public doubts arose over non-transparent data and lack of disclosure of government-backed social organization receipting and distribution of donations, together with other problems about management capacity and efficiency of the organizations acting as intermediaries between donors and donation recipients. The public also began to doubt the formal social organizations and there was an increase in donations to informal groups, including web-based donations that were not captured in statistical reporting.
The third impact came from taxation policy. In terms of the formal registration system for the three types of civil social organizations, the private non-enterprise units are not eligible for the same pre-tax deduction status for philanthropic donation enjoyed by the social groups and foundations. This has resulted in difficulties in taking receipt of donations and even circumvention of procedures. In addition, in international practice, all philanthropic donations in excess of the pre-tax deduction limit can be carried forward to following years. However, this practice is not employed in China and this has adversely affected the development of large-scale philanthropic endeavor. Moreover, the current legal system in China has no detailed requirements or procedures for taxpayers to apply for pre-tax donation deductions. As a result, tax reductions on donations from the private sector and individuals have been difficult to realize in practice. This is a long-term problem which has affected donors and recipient organizations and with a negative impact that is even more marked in the current economic downturn.
Overall, and in comparison with 2011, 2012 was characterized by a greater awareness of freedom and independent resolve among citizens, freedom of association and citizen autonomy as core elements in the cultivation and further development of a philanthropic society. The social ethos moved from prevalent criticism and complaint toward more self-motivated action. This provides fertile ground for the spontaneous and gradual formation of group public choice. Good policy tidings from meetings of the National People's Congress and the National People's Consultative Conference forecast 2013 as a year of burgeoning growth for different civil society groups and social organizations.
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