19 Sep. 2017 | Comments (0)
Despite legitimate concerns about tightening controls on civil society, China’s new philanthropic regulations portend important improvements to problems long—plaguing corporate giving for foreign companies active in the country. Download the full "Quick Note" from The Conference Board China Center.
- Since January 2016, more than 50 new regulations regarding philanthropy have been issued at the central leadership level in China. This is part of an ambitious national plan to establish a new, “comprehensive1” regulatory system for China’s non-profit sector.
- The new regulations have positive and negative implications for both Chinese civil society development and for foreign donors active in China. On the positive side, it is explicit that the government intends to make the non-profit sector more effective, transparent and orderly. On the potentially negative side, it intends to do so via stepped-up regulatory control and supervision, meaning that there will be less autonomy for the sector, and likely less diversity in activity.
- For MNCs, key impacts of the new regulations are threefold:
- There should be a larger pool of qualified “charitable organizations” to work with, and meanwhile the transparency, efficiency and professionalism of charitable organizations should begin to improve.
- New provisions on donation methods and taxation incentives should make it easier and cheaper for MNCs to give.
- The new regulations introduce crowd-funding platforms that MNCs may be able to leverage for more effective, socially inclusive, and larger-scale philanthropic engagement.
- Despite legitimate concerns about tightening controls on civil society, China’s new philanthropic regulations portend important improvements to accountability and transparency problems long-plaguing corporate giving for foreign companies active in the country.
- Corporate Philanthropy leaders should fully appraise the new regulations (listed in the annex of the full Quick Note), and pay attention to three aspects in particular:
- Review the legal status quo of current philanthropic partners in China and make adjustments if necessary.
- Review new tax incentives on charitable giving, and develop optimized giving plans.
- Explore the feasibility of crowd-funding platforms to improve effectiveness and increase publicity.
Download the full version of this Quick Note for more information about Chinese philanthropy regulations and the implications for corporate donors.