Charity Law draft limits public fundraising foundations’ management fee to 10% of expenditures

慈善法建言 | 请明确公募基金会年度管理费用含义

Source: 南都公益观察

Following the review of the third draft of China’s Charity Law during China’s “two sessions”, Article 60 of the draft has captured a certain amount of public attention and stirred up some heated debate. The original article states that ”annual expenditures for charity activities by foundations with the qualifications for public fund-raising shall be no less than 70% of the average revenue of the past three years and the annual management costs (年度管理成本) shall not exceed 15% of annual expenditures.” Many delegates to the two sessions, however, considered the percentage for annual management costs to be way too high and suggested that the percentage be lowered. In the morning of March 12th, during the 12th NPC Legislative Affairs Commission Meeting, the delegates modified the latter half of the article to “the annual management fee(年度管理费用) shall not exceed 10% of annual expenditures”. The final review will be on March 19th.

The modification has caused much discussion within the philanthropy sector. A seminar entitled “Focusing on the Charity Law, and Facing Controversial Articles” was held on March 13th. During the seminar a variety of experts, including Xu Yongguang, director general of the Narada Foundation, Jin Jinping, director of The Center for NPOs law of Peking, Yang Tuan, a researcher of the Chinese Academy of Social Science, Liu Peifeng, a law professor at Beijing Normal University, and Huang Haoming, vice director/secretary general of the China Association for NGO Cooperation, discussed article 60 and came to the conclusion that no limit at all should be set.

Translated by CDB