Donations held back by snags
By Pan Haixia (China Daily)
Updated: 2004-06-01 22:05

Charity organizations are being held back in China due to a lack of public awareness and an ineffective preferential tax policy, say experts.

"Many enterprises' understanding about charity is restricted within helping their own staff and the outside community is given very little attention," said Wu Shusong, an expert from the Shanghai Academy of Social Sciences, in his speech delivered on Monday during the Shanghai International Charity Forum, which ends today.

During the three-day event, Lu Huansheng, from Beijing Charity Magazine, said many Chinese have the wrong understand about charity.

He quoted a survey the magazine conducted not long ago among 60,000 people nationwide, saying that 40 per cent of the respondents still felt the government should take care of charitable acts, not knowing that charity groups are actually non-government organizations.

Experts say the lack of enthusiasm towards charity also has something to do with the country's traditional culture, which stresses more emphasis on the "small society" -- the virtues between parents and children, husband and wife, emperor and subjects, and between friends and brothers. An awareness about the "larger society," such as the public good, is lagging behind.

China's charity environment has a lot of room for improvement in terms of policy also.

Presently, only 3 per cent of donations can be deducted from income tax. In some other countries, enterprises can claim 100 per cent.

"The preferential policy which is almost equal to nothing can hardly stimulate the enthusiasm of enterprises," Wu said.

Statistics show that currently, only a quarter of the enterprises in China which have donated to charities have accepted the preferential tax policy offered by the government. The rest either do not know about the policy or believe the preferential rate is not worth pursuing.

"As many of the enterprises in China are still growing, increasing their bottom lines is still their main concern, which makes it harder to convince them to give much back to society," said Deng Weizhi, another expert from Shanghai Social Sciences Academy.

But there are also good signs. The charity cause is gradually being accepted in China, the forum was told.

According to the Shanghai Charity Foundation (SCF), donations from local Chinese enterprises have witnessed an increase of late.

Last year, Chinese groups donated about 20 per cent of SCF's alms, similar to the amount donated by local foreign enterprises and expatriates.

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