China to Improve Transparency in Philanthropy

China will further improve transparency in charities through a variety of measures, including formulating regulations, publicizing yearly reports and implementing annual inspections and assessments, the minister of civil affairs said Monday.

Minister of Civil Affairs Li Liguo said that certain foundations must publish their annual reports on specified media and undergo inspections and assessments by social organizations.

"The Ministry of Civil Affairs issued a guideline for publicizing donation information at the end of 2011," Li said. "The ministry will make further regulations to meet public demand for charity transparency."

Li stressed that under the guidance and support of philanthropic policies, transparency in the charity sector should be ensured by professional teams with outstanding abilities in financing, operations, publicity and providing service.

Moreover, the ministry is coordinating with the Legislative Affairs Office of the State Council to formulate regulations for the registration and administration of social organizations, foundations and civil non-enterprise units, in order to improve public supervision, Li added.

According to a report on China's philanthropy in 2011, social donations reached 103.2 billion yuan (US$16.4 billion) in 2010 due to the frequent occurrence of major natural disasters, representing only 0.26 percent of China's GDP.

The percentage is much lower than the average level in developed countries, which stands at 2 percent, and also lower than Brazil and India, whose figures are 0.5 percent and 0.3 percent, respectively.

"China still needs to cultivate the nation's awareness of philanthropy and set up a more complete system to develop the cause," Li said.

In 2011, the Red Cross Society of China (RCSC), China's largest charity, came under fire after "Guo Meimei," a young woman who claimed to be a general manager for "Red Cross Commerce," posted photos on the Internet to show off her lavish lifestyle.

Her actions provoked the ire of Internet users who speculated that she might have funded her extravagant purchases by embezzling money from the RCSC.

The RCSC denied the existence of "Red Cross Commerce" and that it employed Guo Meimei, and vowed to set up a public supervision committee and build up an online service to receive supervision and promote transparency in donations, financial management and fund distribution and use.