Lijun HeOpening Up Chinese Philanthropy

By: Lijun He In: Global Philanthropy| Nonprofits| Public Policy

17 Aug 2011

Since China’s Deng Xiaoping embraced the Open Door Policy in 1978, the Chinese economy has witnessed astonishingly rapid growth, leapfrogging Japan to become the world’s second-largest economy. Along with a vertical increase in the number of billionaires (China trails only the United States now), the number of Chinese private foundations has increased from 202 in 2005 to 1,186 in 2011, according to the China Foundation Center.

Both the number and speed of private foundations now have overtaken the growth of public foundations-the quasi-government organizations that are eligible to raise money from the general public and to operate programs that advance mainly government agendas. Various nonprofit professional trainings, research centers on philanthropy, and nonprofit academic programs also have been developed across China in recent years. The development of organized philanthropy in China is unprecedented, robust, and vigorous.

But it is not all good news for the Chinese philanthropic sector. A recent report from the Beijing Normal University One Foundation Philanthropy Research Center stated that the restrictions on the interactions and operations of international nongovernmental organizations (INGOs) on the mainland highlighted the changes of the Chinese regulatory environment in 2010. INGOs have fostered the growing nonprofit sector over the past two decades. Yet they are still perceived as a threat to Chinese authority.

In a society where political stability is the top priority and the rapid modernization of society has greatly increased the gap between the rich and poor, the Chinese government now chooses to foster philanthropy, especially domestic private foundations, as a preferred way to curb social unrest supported by foreign countries, reduce the social antagonism toward the wealthy, and share burdens with the government in addressing social problems in an increasingly complex country.

Although INGOs’ operation in China is restricted, the opportunity for the international philanthropic community to collaborate with Chinese philanthropy remains open. From my experience both as a Ph.D. candidate in philanthropic studies at Indiana University and as a summer associate at the Council on Foundations, I see the following three opportunities:

  • Regulatory: As philanthropy increases in China, the Chinese government faces the challenges of how to regulate its philanthropy toward more transparence and accountability. Tax policy is also one of the long tug-of-wars between Chinese donors and government. Experience and knowledge in the regulation of foundations and charities from the international community are welcomed.
  • Professional development: In spite of the controversy in China surrounding the 2010 Gates-Buffett Giving Pledge, Chinese philanthropy is still in need of technical support from experienced countries on how to build professional organizational structures, design and manage programs, and refine its financial investment model.
  • Best practices: With globalization increasing, issues such as education, health, and the environment concern all countries. Sharing best practices that have proven successful through either private initiatives or public-private partnerships from other countries are encouraged.

As people often say, “When one door closes, another door opens.”  Restrictions on INGOs’ direct operations may be limited. But the international philanthropic community, including the Council, can help the Chinese philanthropic sector improve its effectiveness and professionalism-and open the door to untold possibilities for philanthropy in China.

Lijun He is a summer associate for global philanthropy at the Council on Foundations.

1 Response to Opening Up Chinese Philanthropy

Jeffrey Falkenstein

August 18th, 2011 at 7:24 pm

Great post! The rapid development of the philanthropic sector in China has been incredible to witness, and in parallel China’s growing openness about its foreign aid policy has been equally as impressive. The Guo Meimei scandal created a public outcry for the increase of accountability and transparency of philantropy in China, as scandals tend to do everywhere (it’s good to see that some things are the same everywhere). Calls for transparency have led to criticism from nonprofits and the public to not only overhaul their tax forms, but also seemly has caused the Chinese govenrment to ease the restrictions for Chinese nonprofits to become legitimized and legally recognized entities. The Foundation Center’s work with the China Foundation Center has been an amazing experience for both of our organizations, allowing us to learn a great deal about the differences and similarities of Chinese and US philanthropy. Through our continuing partnership we hope to continue to help with the growth of the sector in China and bridge the knowledge gap between our two countries, all the time learning from and teaching each other through our lessons learned, and at the same time creating an ability to create comparable data sets through which research and analysis of philanthropic data will lead to an even broader understanding of each other, because as we continue to work together we have learned that while there are many differences in our philanthropic sectors (and some of them are huge) understanding that we are part of a sector that is trying to make the world a better place make us see that the similarities are much greater.

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