Charity foundations lack transparency

The majority of charitable foundations do not disclose information to the public, although they are legally mandated to do so, according to a report on Wednesday.

Meanwhile, an incident in Sichuan fanned the flame as Red Cross Society of China (RCSC) said it is looking into complaints that its Chengdu branch carelessly retrieved cash from its collection boxes leaving some banknotes to rot.

Threads being uploaded to microblogs on Tuesday said that some of the 100 collection boxes from RCSC Chengdu are filled with advertising pamphlets and moldy banknotes that were left untouched by officials sent to collect donations.

The RCSC published a post on its official microblog Wednesday, saying that it appreciated supervision from the public and the media. "We will carry out examinations across the country to avoid similar cases from happening again," the post reads.
 
The report came a day after an official from the Ministry of Civil Affairs, the top watchdog for non-governmental organizations, vowed to make charities more transparent.
 
The report said more than 1,380 charitable foundations, about 60 percent, have not made public their annual reports that would reveal their financial status.
 
The report was jointly released by the China Foundation Center, an organization that examines the work of the foundations and their transparency, and Tsinghua University's School of Public Policy and Management.
 
It marked and rated foundations based on information collected from their websites and other open sources. The center has drawn up a transparency index, composed of 60 indicators, to evaluate information disclosure.
 
The average mark for foundations was less than 46 with the index having a top mark of 129.4. This would indicate that the charitable foundation was fully transparent. .
 
The Hubei Provincial Wetland Protection Foundation had a surplus of about 1.57 million yuan ($252,000) at the beginning of 2011 but only donated about 15 percent of it to other charities at the end of that year, it said. The foundation did not meet the legal quota — 70 percent of the previous year's surplus.
 
"Charitable foundations should have treated information transparency as a lifeline as they are in charge of huge donations from the public," Cheng Wenhao, professor at Tsinghua University's School of Public Policy and Management and one of the drafters of the report, said at a news conference on Wednesday.
 
"We could not access any information, except their names, from about 20 foundations, and 46 foundations did not give any contact information during our research," he said.
 
Li Chengyan, a professor who specializes in anti-corruption studies at Peking University's School of Government, said that the government should keep a close eye on charities.
 
"Trust can't replace supervision," he said and criticized the foundations for not giving more information. He proposed that the government introduce incentives and punishment.
 
It can consider withdrawing the qualification of foundations that come at the bottom of the transparency list for three consecutive years and giving more tax incentives to those that top the ranking, he said.
 
A crisis of confidence hit charities last year after a series of scandals.
 
In one scandal,  the RCSC was scrutinized by the Chinese public after Guo Meimei, a young woman who claimed to work for a RCSC uploaded photos showing her lavish lifestyle on her microblog.
 
An investigation later found out that the society allowed a company to profit from running a charity project.

 


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