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Economy

Ruth Shapiro: Civic engagement with Chinese characteristics

China's President Xi Jinping has thrown his weight behind a government drive to increase charitable giving by Chinese citizens at the annual session of parliament this month and a new draft law from Beijing aims to boost local philanthropy by obliging charities to publish financial statements and annual reports.

     Read some Western news reports on China, though, and you might think that all non-profit organizations are being forced to shut down. Clearly the situation on the ground is more nuanced than the headlines.

     Chinese opinions about NGOs have changed dramatically since 2008, the year often referred to as the "first year of civil society in China". Powered by social media, individuals and organizations flocked to Sichuan province to help with relief efforts after a massive earthquake. But in its wake, non-government organizations were treated with wariness and suspicion by the authorities and locals, so many had to leave the affected areas. Since then, those wanting to engage in charitable activities have had to learn to do good with Chinese characteristics.

     In China, many organizations are "operating foundations," receiving as well as providing funds for a particular issue, such as education or health. Some are affiliated with public universities and municipalities. Many NGOs blend their missions with government goals, forming a type of joint venture to address a public need. The lines between government, foundation and NGOs are often blurred. One of the largest NGOs is the China Youth Development Foundation, which supports poor youth through education programs. Created with a grant from the All China Youth Federation, a training ground for Chinese Communist Party leaders, its board of trustees includes many officials and its goals align with government policy. In reality, the China Youth Development Foundation is a "GONGO," a government-organized non-governmental organization.

     It is much easier for social welfare organizations to work in harmony with public efforts in China than for political advocacy organizations, whose role is to agitate for policy change. In the United States, advocacy organizations operate under a different tax code to charitable or social delivery organizations. In China, no legal distinction exists, so all organizations are called NGOs. Since Xi Jinping came to office, there has been a tightening of restrictions on domestic and international NGOs that practice advocacy. As Shawn Shieh of the Hong Kong based China Labor Bulletin puts it: "For civil society in general, this is not a good time. Everyone is taking shelter and laying low".

     But that does not mean NGOs of all types are unwelcome? There are a number of constructive trends involving social welfare organizations taking place in China today, including changes in attitude by the government, the public, and the organizations themselves.

Revival of philanthropy

Although there had been a long history of charity in China, from the time of the 1949 Communist revolution until the late 20th century, there were no philanthropic or citizen-led organizations. Official policy held that the state and the party were responsible for all society's needs. But by the 1990s, citizen-led efforts began to emerge. Foreign donors became keen to engage with China. Government-organized NGOs arose.

     The 2008 earthquake brought even greater change. The Chinese people responded on an unprecedented scale. Spurred on by the rise of social media and the crisis in Sichuan, new energy flowed into NGOs to an unprecedented degree. Domestic Chinese donations exceeded 100 billion yuan ($15 billion) for the first time.

     That level of philanthropic largesse proved short-lived. The corrupt siphoning of funds led to a plunge in donations, by some estimates a fall of 90 percent. Uncertainty about the official reception toward NGOs reduced further their presence.

     Public opinion has since rallied: charitable donations are up 50% from 2009, and publications devoted to philanthropy are proliferating, although the World Giving Index for 2015 still ranks China 144th in giving, making it one of the world's least generous nations. Official responses have warmed, however. In the 2011 Five Year Plan, the government set out the goals of increasing philanthropy, raising awareness, and developing more charitable organizations.

     Equally importantly, NGO attitudes have evolved. For social delivery NGOs to operate in China, they must partner with the government to some extent. Nellie Fong, a former Hong Kong legislator and Founder and Chief Executive of Lifeline Express, a non-profit organization that provides ophthalmological training and care throughout rural China, observes that "...in China you would not succeed unless you have full government support...you have to gain the trust of the government so that they are happy to partner with you".

     The majority of China based NGOs have decided that this partnership is not only key to their survival but brings about important benefits. Ma Jun, founder of the Institute of Public and Environmental Affairs, explains that one of the key sources of her organization's credibility is that the data it uses comes from government. According to Ma, the data allows the government and the public at large to trust the information it provides. He says, "Our country is going through a transformation. It is helpful to build a society with a more healthy interaction between the government, the private sector, and the public."

     Social media increasingly connects the three. It helped journalist Fei Deng raise 25 million yuan in just eight months to fund a free lunch program for students in poor areas of the country. Because of the extraordinary public engagement, the government instituted its own school lunch subsidy for poor children. Fei Deng's effort thus scaled to cover 26 million school children.

Quake transformed attitude

The government's views and interactions with philanthropists and NGOs are of paramount importance. During the 2008 earthquake, the government did not know how to respond to the outpouring of help, but when another large quake struck Sichuan five years later, the reaction was quite different; the government's ability and desire to work with NGOs had changed significantly. The Ministry of Civil Affairs proudly touted that the 2013 quake "organized 493 philanthropic projects together with NGOs, and attracted more than 1.146 billion yuan in donations from the public. Social groups have become an important force during the process of disaster relief."

     Through increased government acceptance, the range of charitable activities taking place has swelled. In China, change can take place very quickly and on a vast scale. According to some estimates, there are more than 500,000 registered NGOs and more than 200,000 unregistered. Only a few thousand of these meet the "Three Threes" standards of the NGO support and training organization Huizeren (entities existing for at least three years, with three or more full-time staff, and having successfully run three or more projects), but many more are coming, and many are home-grown.

     Previously, much of the funding for NGOs in China has come from abroad. However, Chinese wealth is rising, Chinese people are giving directly, and there are increasing numbers of Chinese foundations that support grassroots organizations. Even the government provides contracts to certain NGOs.

     In the not too distant past, it was common to hear Western business executives say that in ten or fifteen years, China "would be just like us." No one says that anymore. This is also true for philanthropic and social delivery organizations. In China, both will grow with Chinese characteristics.

Ruth Shapiro is chief executive of The Centre for Asian Philanthropy and Society, an organization dedicated to facilitating excellence in philanthropy.

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