Following up on my March and April posts, I wanted to return to the subject of reforms in the legal framework for CSOs in China. As I noted, there is a special relationship between the proposed reforms and economic restricting in China. They are also very much affected by the party-state’s attitudes about what we might call ‘new governance’. According to the theory, which first rolled out in the 12th Five Year Plan, adopted by the National People’s Congress in 2013. This theory, which relies on the state’s determination to create the ‘small government/big society’ system, aims to downsize government by outsourcing social services on a fairly massive scale to CSOs.
To ensure that this is not just theory but actually comes to fruition in practice, a couple of additional points need to be raised, which are for the Ministry to Civil Affairs (MCA) to address rather quickly. First is the need to create better governance within CSOs, not just foundations, which it seems is where most of the emphasis has been placed. This is not surprising, given that the major scandals of 2011 were in foundations, and questions as the credibility of government-related foundations continue to this day (witness the Ya’an earthquake funding problems).
But MCA needs to widen out its efforts to encompass all CSOs, not just foundations. There need to be efforts at board training (many CSO boards in China are dysfunctional). Some academic centres, such as the BNU Philanthropy Research Institute, are beginning to do this. It needs to be scaled up and based in academic centres throughout China (just as is done in the US and the UK).
Second is the need to ensure that fundraising rules are strictly adhered to, while at the same time opening up fundraising opportunities to all CSOs. At the present, ensuring quality has meant restricting access, by which I mean that the number of nationally registered CSOs that may lawfully give tax deduction receipts is less than 200 in a country as vast as China. While many more are permitted to do so if they are registered locally or with provincial authorities, this needs to change.
How to change it? It will only be possible to do so if the MCA and the State Administration of Taxation (SAT) gain more confidence in CSOs. They can begin by promulgating national level regulations on fundraising (based on the local ones that have been adopted) and training trainers to teach CSOs as to how to conduct lawful and ethical fund raising campaigns. This could be started almost immediately and my prediction is that in five years the scandal-plagued sector will be in much better shape.
Karla W Simon (西 门 雅) is Research Professor of Law at the Catholic University of America’s Columbus School of Law. She splits her time between Beijing and the Washington, DC area.