1st LD Writethru-China Focus: NPC considers law aimed at charity transparency

China's top legislature on Friday considered a draft of the country's first charity law, which aims to regulate charities and protect the interests of donors, beneficiaries and volunteers.

With the development of philanthropy in China, new problems have emerged in the sector, said Wang Shengming, deputy director of the Committee for Internal and Judicial Affairs of the National People's Congress, while briefing lawmakers at the opening of the top legislature's five-day bimonthly session.

Wang told lawmakers a charity law was needed to "boost the vitality of charity organizations and raise awareness of social causes, regulate charity behavior and promote the healthy development of philanthropy."

Donations to charity in China have risen from less than 10 billion yuan (1.57 billion U.S. dollars) in 2005 to about 100 billion yuan today, according to Wang.

The draft, with 115 articles, says charity organizations should publicize clear information on their operations in order to ensure transparency and credibility.

"Charity organizations should disclose their fundraising at least once every three months," the draft says.

The reputation of Chinese charities took a hit in 2011 when a woman used social media to claim she managed an organization under the Red Cross Society of China (RCSC) and flaunted her wealth and extravagant lifestyle. The incident and ensuing scandals triggered public concern about embezzlement and improper management of charities.

The scandal also dealt a major blow to the reputation of the state-owned RCSC and caused a massive drop in donations.

The draft law also guarantees volunteers' rights and ensures that charity groups, donors and beneficiaries enjoy taxation favors.

It says charity organizations should strengthen internal governance and implement a standard national accounting system.

The draft has special stipulations on online fundraising to avoid cyber fraud.

Earlier this month, in east China's Anhui Province, Li Juan was seriously bitten by a dog in a kennel owned by her boyfriend, Zhang Hongyu. However, Zhang falsely claimed on the Internet that Li was hurt when trying to save a girl from dogs and raised about 800,000 yuan in donations. Later, media investigations exposed the fraud and police detained Zhang.

China had nearly 3,000 registered foundations -- nonprofit groups that manage charitable donations -- as of the end of 2012, up nearly 16 percent year on year, according to official figures. Endi