Opinion

Wealthy wary of grand giveaways

By Qian Yanfeng (China Daily)
Updated: 2010-10-20 15:33

Charitable donations in China reached a record high of 107 billion yuan in 2008, equal to 0.4 percent of gross domestic product (GDP), according to figures from the Ministry of Civil Affairs. However, much of that money came after the eight-magnitude earthquake that year in Sichuan province and went to relief funds for victims.

In China, the combined total of donations made in 2007 and 2009 was roughly 60 billion yuan. In the US, where per capita GDP is 10 times more than that of China, charities receive an annual average of $300 billion.

"The Chinese don't lack a culture of giving, historically," explained Deng, "but the rapid accumulation of wealth (fueled by) the economic and social transformation of the past few decades has made China's nouveau riche indulgent in fortune, rather than made them think about charity."

Wealthy people are also less willing to donate for fear of being pushed into the media spotlight and having their motives questioned, he added.

Many of the rich and famous in China have been scrutinized despite their proclaimed good intentions.

Chen once sparked controversy when he stood behind a wall of bank notes to announce his charity trip to poor rural areas in western regions of China.

He later said the move was designed to put pressure on others and spearhead a change in values.

"With the widening gap between rich and poor, China's wealthy class has become resented and, in many cases, misunderstood," said Deng. "If they don't donate, they are considered indifferent; if they give money away, there must be a selfish motive behind it.

"How can that social mentality encourage philanthropy?" he asked.

Ultimately, China has yet to build a healthy environment for charity, one that fosters an active and reputable community of foundations that can act as a platform for the rich and general public to help people in need, say experts.

Although there are no specific laws or regulations banning the establishment of public foundations, in practice most applications fail unless the organization is affiliated with a government department.

Those that actually acquire support from an authority and get the green light to collect donations are subject to official expropriation and tend to lose credibility with the public, said Deng.

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Examples abound of public foundations falling short of expectation and even being found to be involved in corruption.

Three months after the massive earthquake hit Yushu, a Tibetan autonomous prefecture in Qinghai province, last April, five government departments jointly issued a circular requiring all public foundations to pass on donations to the provincial government for "better and more efficient distribution of disaster relief funds".

The circular specified the use, management, distribution, supervision and reporting of the funds.

Despite the document's clarity, the move triggered a heated debate in the charity sector, with many arguing that authorities "should not intervene in the operation of charity foundations", as it would be difficult to effectively supervise the flow of money.