Jia Xijin: an Analysis of China’s Online Fundraising During COVID-19

Editor’s Note

This is CDB’s translation of an article by Tsinghua professor Jia Xijin, originally published by the WeChat account of the Amity Foundation’s Chuanyi Fund (爱德传一基金) on March 16, 2020. Please find the original here. Jia Xijin is an Associate Professor of the School of Public Policy and Management of Tsinghua University and Vice-President of the Institute of Charity and Philanthropy of Tsinghua University.

 

On February 23rd and March 7th, the China Association of Fundraising Professionals (方德瑞信, or CAPF) team published two observational articles, based on information publicly released by China’s 20 official Internet fundraising platforms on projects related to the fight against COVID-19, analyzing the platforms’ fundraising data during two time periods: before February 17, and between February 17 and March 2. You can find the articles at the following links:

 

The Fight Against COVID-19 – Preliminary Statistical Analysis of Data from Internet Fundraising Platforms (CAFP)

The Fight Against COVID-19 – Second Phase of the Statistical Analysis of Internet Fundraising Platforms’ Data (CAFP)

 

Under the Charity Law of the People’s Republic of China, charitable public fundraising must be carried out by charitable organizations that have obtained public fundraising qualifications, whereas online fundraising can only be conducted through the charity information platforms designated by the Ministry of Civil Affairs. As of now, there are 20 Internet fundraising information platforms designated by the Ministry; and there are 7,534 registered charities nationwide, of which 2,755 are eligible for public fundraising. The data of the 20 Internet fundraising information platforms published by the CAPF team should thus be able to reflect the current data for all legal public charitable Internet fundraising related to the epidemic in China.

 

1. Volume and trends

As of February 17, 329 public fundraising projects to combat the epidemic were launched across 20 online fundraising platforms, amounting to 1.454 billion yuan of donations made by 27.11 million individual donors. In the 15 days from February 17 to March 2, 120 new fundraising projects were launched, donations increased by 114 million yuan to 1.569 billion yuan, and the number of individual donors reached 29.93 million.

What does this total mean? As a comparison, the five organisations in Hubei Province which are designated to receive social donations and epidemic prevention supplies (the Hubei Charity Federation, Wuhan Charity Federation, Hubei Red Cross, Wuhan Red Cross and Hubei Youth Development Foundation) received a total of 13.202 billion yuan of donations as of February 29th, of which 6.746 billion was at the provincial level, and 4.628 billion in Wuhan city. In other words, online public fundraising amounts to about one tenth of the total funds received by these five designated organisations.

Compare this, then, with a popular private foundation, the Beijing Hanhong Charity Foundation. This foundation had raised more than 140 million yuan by January 31. As of February 17, online public fundraising was equivalent to the fundraising of ten Beijing Hanhong Charity Foundations.

On the other hand, statistics from the Ministry of Civil Affairs show that a total of 3.17 billion yuan was raised in 2018 across the 20 online fundraising platforms, a result of 8.46 billion people donating to 21,000 fundraising projects. This means that the funds raised through online public fundraising to fight the epidemic have already surpassed half of the total funds raised in 2018, with only about 2% of projects and 0.4% of donors compared to 2018. There is a clear focusing effect here.

Compare this now with Tencent’s fifth 9/9 Charity Day in 2019. The fifth 9/9 Charity Day raised 1.783 billion yuan in three days from 48 million donors. The funds for the fight against the epidemic raised through online public fundraising this year are close to the amount raised during the Fifth 9/9 Charity Day, but the number of donors is smaller and the average size of the donations is about 1.4 times that of the 9/9 Charity Day.

Looking at the trend, it is clear that as the emergency response phase of the epidemic passes, the number of donors and the size of the donations are also decreasing. Compared to the period before February 17, the average daily amount fundraised for the next 15 days was 7.67 million, and the average single donation had also fallen. On February 17, 31.6% of projects reached their fundraising targets. This ratio had fallen to 26.7% as of March 2.

Overall, online public fundraising has been one of the official channels to fundraise for the coronavirus epidemic, and even thought the sums raised are perhaps not that impressive, when compared to the previous record for online fundraising this has been a major event. The 2019 report “China’s Online Philanthropy: Inspiring Passion for Individual Donations”, jointly published by Bain & Company and United Way, shows that online donations account for slightly over 2% of total donations in China. Judging from this, online fundraising has likely played a far bigger role than normal in the fundraising for the struggle against the epidemic.

 

2. Who is raising funds?

 

According to the data published by CAPF, by March 2, there were 204 public fundraising charities raising funds online, which accounts for 7.4% of the total number of charitable organizations eligible for public fundraising. Among them there were 127 foundations, accounting for 62% of the total number, 73 charities, accounting for 36%, and 4 other associations. At the end of 2019, there were 7580 registered foundations nationwide, 806 of them being charitable organizations qualified for public fundraising, with foundations carrying out public fundraising accounting for around 15.9%

The online fundraising projects related to COVID-19 had 234 executing agencies, of which 60% were foundations, 31% belonged to the Charity Federation, and 22 were non-profit civil organizations, associations, special funds, businesses and other organizations. As for the amounts raised, charities raised 59.42% of the total amount, foundations 37.14% and other associations 3.44%.

This piece of data is very interesting: the number of foundations involved in fundraising is 1.74 times bigger than the number of Charity Federation branches involved, but the latter raised 1.6 times more than the former, i.e. the average amount raised by the foundations is less than 36% of the amount raised by the Charity Federation branches. People often complain about the efficiency and credibility of organizations like the Red Cross and the Charity Federation, which have a strong bureaucratic tint. What’s more, foundations perform best when it comes to information accessibility and transparency. Yet the data on online fundraising in the midst of the fight against the epidemic show that the Charity Federation has stronger fundraising capacities. This is a phenomenon worthy of attention and research.

In addition to that, taking a look at fundraising projects, we see that only 31% of them provided budget details, while 69% of them did not. In the documentation of the 449 online projects surveyed, only 9% have listed out their management fee charges, whereas 48% emphasized that they do not charge management fees, and the remaining 43% made no indications on this whatsoever. Before February 17, 76% of projects had no budget details, and 83% did not state clearly whether or not they charged a management fee. While the level of project specification has increased following the relaxation of the tension over the epidemic, still many of them have not fulfilled the requirements of the Charity Law.

To a certain extent, the urgency of the outbreak has allowed for the existence of operational irregularities in projects; however, the accounting for management fees is, to a greater extent, a conceptual problem. More than 40% of projects had no clear explanation of their management fees, showing that it was obviously not a matter that could be explained by time urgency. What’s more, 48% of projects that had a clear accounting of their management fees had waived those fees. Even though there was an incentive for organizations to be charitable during the fight against the epidemic, such a high ratio of projects waiving their management fees is not a common phenomenon, regardless of whether it was based on consideration of operational professionalism and standardization, or on catering to donors’ perceptions or due to moral pressures. It can be seen that the management fee problem has not yet been taken seriously, that the concept of professional operations still faces big challenges, and that there is a need to examine the underlying causes more thoroughly.

 

3 What is the fundraising for?

 

According to data released by the CAFP Group, up until March 2, 40% of projects in the areas covered were focused in Hubei Province. Before February 17, this figure was 46%.

69% of projects were in the categories of medical treatment and disease control and prevention. In addition, projects in categories of community epidemic prevention, existing network support and integration accounted for 10%, 10% and 9% respectively, while 2% were unspecified. Before February 17, the categories of medical treatment and disease control and prevention were even more dominant, reaching 77%.

Project content was focused on the procurement of anti-epidemic materials, covering 66%. The content of another 14% of projects was directed at relief for medical personnel and their families, with 2.7% directed at frontline protection personnel. 118 projects had unspecified service content, accounting for 26.3%, which was slightly lower than in the phase before February 17.

The main recipients of project proceeds were medical personnel, at 43%. Others included various disadvantaged groups and groups vulnerable to the epidemic, with 3.8% and 3% directed at volunteers and patients respectively, and a small amount to unified allocation. 50 projects had unspecified recipient groups, accounting for 11%, the same as prior to February 17.

The above data shows that during the epidemic, charitable organisations have directly focused on medical care, procurement of anti-epidemic materials and on medical personnel. There have not yet been significant changes in these focus points. With the emergence of secondary problems in various aspects such as epidemic control and economic and social life, whether charitable organisations can acutely perceive social governance issues, return to their organisational purpose areas and participate in all aspects of social governance is worthy of further observation.

Around one quarter of fundraising projects still do not have a clearly specified content, and more than one tenth do not have clear recipient groups, a factor which has not significantly changed. This is an aspect in which charitable organisations need to increase their professionalism.

 


 

In sum, during the epidemic, 7.4% of public fundraising charitable organisations and 15.9% of public fundraising foundations conducted epidemic-related online public fundraising. The funds raised reached half of the total amount raised in a normal year, and the amount donated per person was nearly one hundred times the normal figure. The Charity Federation has demonstrated an advantage in fundraising. The homogeneity of fundraising projects is fairly strong, focusing on aspects directly related to combating the epidemic, such as the procurement of protective materials and medical personnel. In terms of management costs and the professionalism and openness of their plans, a considerable number of projects are still in need of improvement.

In the long-term future of epidemic prevention and control, which will relate increasingly to all aspects of the recovery process, online fundraising is a resource channel for charitable organisations which has potential for development. A professional and mature model for learning is essential for fundraisers and donors.

Translated by Peta Heinrich, Aleksandra Radenovic, Feng Yuan and Vanessa Zhang

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