Translated: how has the Charity Law affected the supervision of social organizations?

Editor’s Note

This is an abridged translation of parts of an article published by 公益资本论, a Chinese-language WeChat account that produces analysis on social organizations and the charity sector. The article questions the commonly held notion that government supervision of China’s social organizations has become stricter since the Charity Law came into effect in 2016.

 

“The current strictness of the supervision of social organizations has not been seen for nearly two decades”. This is a thesis that has been much discussed in the field of social organizations since July.

Currently, the supervision of social organizations mainly involves three levels. One is the organizations’ initial registration, the second is the regulation of charitable activities, and the third is the party’s grasp and lead over the organizations’ direction. Only by clarifying the developments and changes in these three aspects can we have a clearer point of view.

Since the promulgation of the “Charity Law” in 2016, the supporting system to promote its implementation has become larger by the year. On the whole, the rules regarding social organizations’ charitable activities are more and more comprehensive, ending the situation of having a philanthropy without rules in many fields, and providing a legal basis for the normative development of social organizations.

In 2018, at the national level, relevant regulations such as credit management, information disclosure, and preservation and appreciation of the Charity Law were introduced one after the other; at the local level, many provinces drew up their an implementation method for the law. The Charity Law was implemented in conjunction with a number of documents issued by the relevant Ministry of Civil Affairs and other relevant government departments in 2016, plus the regulations and policy documents promulgated in 2017 on charity tax reform, charitable trusts, and charity fundraising information platform construction. It can be said that China’s charitable practice has entered a stage of comprehensive law-based compliance.

On January 12, 2018, the Ministry of Civil Affairs adopted the “Measures for the Administration of Credit Information of Social Organizations” (hereinafter referred to as the “Administrative Measures”), which was announced and implemented on February 24. The “Administrative Measures” stipulate that social organization credit information includes basic information, annual reporting information, administrative inspection information, administrative punishment information and other information.

As the responsible department of social organizations’ credit information management work, the civil affairs departments must perform the following duties: information collection and recording, loss of trust management, information disclosure, dynamic management, credit repair, objection processing and the implementation of rewards and punishments.

Openness and transparency are the basic requirements of charity. The Charity Law stipulates the information disclosure of charity in a chapter, and completes the top-level design of the information disclosure system of charitable organizations.

In 2018, the Ministry of Civil Affairs issued the “Measures for the Information Disclosure of Charitable Organizations” (hereinafter referred to as the “Open Measures”), which refined the information disclosure obligations of charitable organizations, and answered the questions “why are charitable organizations open, who has to open up, how to disclose information, what to disclose and how to implement the issue of Internet fundraising information disclosure”.

What information should charity organizations disclose? Starting from the characteristics of charitable organizations and charitable activities, the “Open Measures” highlights the disclosure of information on charitable organizations’ property activities and public fundraising.

Regarding the information disclosure of property activities, the “Open Measures” clearly defines the information disclosure requirements of charitable organizations’ property activities from the perspectives of importance and relevance.

With the “Open Measures” major asset changes, major investments, major transactions and capital transactions are open to the public. The standards for “significant” property activities are self-determined by charitable organizations and made available to the public, allowing organizations to exercise self-discipline and social supervision.

Local related supporting regulations were also intensively introduced in 2018.

On March 1st, 2018, the “Jiangsu Province Charity Regulations” were officially implemented. The regulations take the lead in legislating and regulating “personal help”. On the basis of the state’s non-prohibition of individual help, the law further regulates the scope, obligations and media obligations of individual help; the regulations stipulate that “the civil affairs department of the provincial people’s government establishes a unified charity information sharing platform, and provides comprehensive services such as regulation and policy propaganda, charitable organization cultivation, charity demand release, and charity project promotion.”

In December 2018, Anhui Province promulgated the implementation of the “Charity Law”, which will take effect on February 1, 2019. The measures regulate the charitable fundraising and charitable donations in accordance with the general idea of “strictly managing” charitable fundraising and charitable donations; it stipulates the obligations and specific content requirements for the civil affairs department and other relevant departments to disclose charitable information to the society in a timely manner; Implement special preferential policies for charitable activities to help the poor; strengthen the cultivation of charitable professionals…

At the end of 2018, the Charity Law was officially implemented for nearly three years. On the basis of practice, important supporting systems were introduced. As a new thing, philanthropy is expected to become more and more standardized in the future.

Translated by Aida Cristina Idone Befecadu (CDB)

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