2nd Ld: China's first charity bill for reading amid tough fight against poverty

The draft of charity law, the first bill to regulate charity activities, was submitted to China's national legislature on Wednesday, aiming to recruit help from good Samaritans in realizing the 2020 poverty alleviation target.

China expects the new law to encourage more ordinary citizens, enterprises and social organizations to engage in charity programs, said Li Jianguo, vice chairman of the National People's Congress (NPC) Standing Committee, when elaborating the draft law to NPC deputies at the NPC annual session.

China plans to lift out of poverty all rural residents who fall below the current poverty line by 2020. The number stood at about 70 million at the end of 2015, under a standard of per capita net income of 2,800 yuan (430 U.S. dollars) a year.

"Charitable programs are indispensable for the fight against poverty. Formulating a charity law ... helps nongovernmental sources work together in taking targeted measures to alleviate and eliminate poverty and makes contributions to achieving the goal of building a moderately prosperous society in all respects," Li said.

Another significance of drafting this bill is to tackle loopholes and problems in charity activities, which have boomed in the past few years, he said.

The amount of donation to charity programs increased from 10 billion yuan (1.54 billion U.S. dollars) in 2006 to about 100 billion yuan now.

Many charity organizations have not installed proper internal management nor operated under established protocols, while the charity sector have yet developed a self-discipline mechanism, Li said.

The new law is also expected to promote the cause and enhance the awareness as Chinese are not fully getting used to engage in charity.

Although several existing laws and government regulations regulate charity activities to some degree, they are not up-to-date, complete and coordinated and fail to fully cover the current vigorous development of charity, he said.

Since 2008, about 800 national lawmakers have initiated 27 motions and 29 proposals lobbying to draft the charity law. The draft law was first submitted for reading at the bi-monthly session of NPC Standing Committee in last October and for second reading two months later.

The bill, consisting of 12 chapters and 112 articles, defines charity activities and charity organizations and regulate under what criteria charity organizations should be founded and how they should be registered.

It also addresses the internal management of charity organizations, the obligation of disclosing information, fund-raising and policies to encourage charity donations, such as tax deduction.

MORE QUALIFIED FOR PUBLIC FUNDRAISING

Currently a very small number of charity organizations are allowed to raise donation from the general public, such as the Red Cross Society of China (RCSC), while the others can only raise fund from a specific group of donors.

The bill eases the restriction and expands the pool by stipulating that legally-registered charity groups can apply to the civil affairs department for a qualification of public fundraising after two years of operation and may obtain a certificate if it has sound internal governance and follow protocols. The provision is considered an effort to facilitate the operation of charity groups.

Internet fundraising has been widely used but also vulnerable to fraud and malpractice. The bill requires charity groups to either post fundraising information on the platforms designated by the government or on their own websites.

It also bans charity groups without proper certificate or individuals from raising funds from the public. Those who break the rule will have to return the donation and may face a fine ranging from 10,000 yuan to 100,000 yuan. If it is hard to return the funds to donors, the government will confiscate it and transfer to other legal charity groups. Endi