Can charitable giving go far in China?

By Ma Guihua, China Features

BEIJING, Deb. 8 (Xinhua) -- About one month ago, Chen Fashu, chairman of the New Huadu Industrial Group based in south China's Fujian Province, found himself in the middle of a controversy after declaring that he was going to set up the country's largest private philanthropic fund.

Chen, ranked 15th on the 2009 list of wealthiest people in Hurun China, promised to endow the New Huadu Philanthropic Fund with 8.3 billion yuan (about 1.2 billion U.S. dollars) worth of equity, some 45 percent of his personal wealth.

However, the goodwill move was greeted with more skepticism than appreciation. Charitable donations in the form of equity have no precedence in China. Many critics question the motives of the fund, arguing that it could be intended as a means of tax evasion.

"Corporate philanthropy is very fragile. If enterprises are really willing to take charities as their social responsibility, we should treasure that," says Howard Liu Hung To, director of China unit of Oxfam, Hong Kong.

Liu cited an old saying, of "displaying a sheep's head while selling dog meat" as a way of pointing out the skepticism. "Credibility is the key to charity funds," he notes.

Xu Yongguang, who masterminded Project Hope, the charity program enlisting nationwide resources in supporting basic education in rural China, insisted: "We should first give the Funda 'Hurray!' Whatever the motives, it is after all more money for a good cause." What's more, he added: "Tax avoidance is not something to be ashamed of if it's legitimate."

Charitable giving is not a novelty in China. Tracing back some 2,300 years, Mencius, the Chinese philosopher, advocated that a man should do good for his society when he is better off and able to do so.

However, the tradition has wandered off in the last few decades as people were engrossed in pursuing personal wealth in the newly introduced market economy. The wandering didn't last long. The increasing income disparity became a wake-up call to many of the newly wealthy beneficiaries of China's reform and open economic policies.

Against this backdrop, Xu Yongguang's Project Hope came to the fore. Since 1989, the initiative under China Youth Development Foundation has raised over 5.7 billion yuan (838 million dollars), building over 15,000 Hope primary schools and assisting more than three million children in their schooling.

"In pure economic terms, the 5.7 billion yuan money raised could only build 7-kilometer-long subway in Shanghai. But the schools sponsored by Project Hope have accounted for 4 percent of the country's rural primary schools," said Xu. He notes that the social contribution of Project Hope is more spiritual than material.

"It's far beyond the things that visible to the naked eye."

When the deadly earthquake struck southwest China's Sichuan Province last May, killing over 70,000, many school buildings were reduced rubble, taking thousands of young lives. But there wasn't a single death in one of the 500 or so Hope Primary Schools in the quake-stricken areas.

"I'm gratified that the schools have stood up to the tough test of the quake and therefore haven't let the donors down," said the 60-year-old Xu, who had to resort to court to fight allegations about Project Hope.

Project Hope has inspired others in China's philanthropic sphere: the Spring Buds Project which helps out girls dropping out of school; and the Mothers' Cistern Project that assists women from northwest China's drought-plagued Loess Plateau to collect rain water for drinking, to name two.

Since 2004 when the "Regulation on the Administration of Foundations" was issued, many private funds have joined the ranks of charity foundations. By 2006, 349 private foundations stood along with some 900 public foundations.

To date, there are 414,000 registered charity organizations in China, engaging in services ranging across the spectrum from health, AIDS, and disability to culture, education, and environment. If grassroots non-governmental organizations (NGOs) are taken into account, the number could easily top one million.

In the last decade, charitable giving in China has been growing steadily, but nothing matches the donations in 2008, when the whole country came together after the devastating May earthquake.

Statistics from the Ministry of Civil Affairs show that quake donations totaled 107 billion yuan (15.73 billion dollars) in 2008,about 3.5 times of the previous year. For the first time, private donations have exceeded corporate ones, reaching 45.8 billion yuan, more than half the total, with an average person contributing 34.6yuan (5 dollars).

"China is moving toward a modern society in terms of charitable giving," said Yang Tuan, deputy director of the Social Policy Research Center at the Chinese Academy of Social Sciences.

She believes that charity is a powerful force that brings people together in the present-day China. "In a society undergoing transition, charity is an ideology accepted by the majority."