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Follow the money : philanthropy in China - who's giving, to whom, and why? Tipton, Benjamin A. E. 2012

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Follow the Money: Philanthropy in China - Whoʼs Giving, to Whom, and Why? by Benjamin A. E. Tipton A THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF ARTS in THE FACULTY OF GRADUATE STUDIES (ASIA PACIFIC POLICY STUDIES) THE UNIVERSITY OF BRITISH COLUMBIA (Vancouver) March 2012 © Benjamin A. E. Tipton, 2012 Abstract Surveys conducted in China suggest that the Chinese are not generous with their resources - their money, time, or help. However, there is much evidence to the contrary, when viewing the data with different lenses. Giving is increasing and the growth of civil society  is accelerating. This thesis examines the individual philanthropic giving that occurs in the Peoples Republic of China (PRC). By “following the money” this study  fills in a gap in available academic literature, and investigates the influences on giving behavior and the particular giving characteristics of the Chinese. This paper examines the social, cultural, economic and political factors; the regulatory framework - such as laws and regulations; and, other developments occurring around the PRC by  local authorities responding to civil society  crises in transparency and reporting requirements. The research strategies employed throughout are: (1) quantitative surveys, (2) qualitative eth- nographic research methods, and (3) field research conducted during 2011. By  using recent events such as the Sichuan earthquake in 2008 - when Chinese individuals donated record amounts of resources - and the public trust crisis of 2011, this study  reflects on the current is- sues influencing giving. The qualitative research provides an in-depth look at the historical influ- ences on giving. Data have been collected from government, civil society, and business reports; international and domestic surveys; media reports; PRC statutes and regulations. Some view Chinese as lacking generosity, but perspective on this issue is particularly  important when con- sidering the cultural, economic and political differences between people groups compared. This thesis explores the giving that occurs in the PRC and the influences on that giving - which we call - individual philanthropic giving with Chinese characteristics. By  following the money, this thesis provides a comprehensive perspective and interpretation of the giving that currently  oc- curs in the PRC and how it differs from giving in other countries around the world. ii Table of Contents ................................................................................................................................Abstract " ii ................................................................................................................Table of Contents" iii .........................................................................................................................List of Tables" v ......................................................................................................................List of Figures" vi ..........................................................................................................List of Abbreviations" vii ...........................................................................................................Acknowledgements" viii ..........................................................................................................................Dedication" viii ...........................................................................................................................Introduction" 1 .............................................................................................................Literature Review ! 4 ............................................................................................................................Methods! 9 .....................................................................................................Why Individual Giving?! 9 ........................................................................What is Individual Philanthropic Giving?! 12 .................................................................................................Giving and Civil Society ! 13 ..................................................................................Chapter 1: Chinese Characteristics" 15 ........................................................................................................................Economic! 19 .................................................................Rapid Industrialization and Neoliberalism! 21 ........................................................................................................Wealth Creation! 22 .......................................................................................................Business Culture! 24 .................................................................................................................Socio-Cultural! 25 ....................................................................................................Cultural Influences! 27 ..................................................................................................Culture of Business! 28 ..........................................................................................Religion and Philosophy ! 29 ....................................................................................................Familial Influences! 31 ..........................................................................................................................Trust! 32 ........................................................................................................Extreme Wealth! 35 ........................................................................................................Diaspora Giving! 36 .................................................................................................International Donors ! 37 ...............................................................................................................Technology ! 37 ............................................................................................................................Political! 39 .......................................................................................................12th 5-year Plan! 41 ................................................................................................Non-Profit Incubators! 41 ........................................................................................................................Taxes! 42 iii ........................................................................................................................Media! 43 ...................................................................................Social Welfare and Insurance! 44 .......................................................................................................Individual Saving! 45 .............................................................................................................Volunteerism! 46 ....................................................................................Chapter 2: Regulatory Framework" 47 .......................................................................................Public Welfare Donations Law ! 47 .............................................................................................Individual Income Tax Law ! 48 ............................................................................................Enterprise Income Tax Law ! 49 ........................................................................Interpretation of Tax and Donation Laws! 51 .............................................................................................Chapter 3: Further Evidence" 53 .....................................................................................................Transparency Survey ! 53 ...............................................................................................The National Charity Law ! 54 ............................................................................Institutional Behavior and Differences ! 56 ..........................................................................................Guidelines for Transparency ! 57 ....................................................Local Authorities Develop Transparency Regulations! 59 ..........................................................................................................................Conclusion" 61 ............................................................................Overall Significance of This Research! 64 ...................................................................................The Limitations of This Research! 64 .............................................................................................Application of the Findings ! 65 ............................................................................................Future Research Directions! 65 .......................................................................................................................Bibliography" 67 .............................................................................................................................Appendix" 76 iv List of Tables ...............................................................................Table 1: Trust in institutions in the PRC ! 32 ..........................Table 2: Total donations (1999-2011): recorded by Ministry of Civil Affairs! 76 .............................................................Table 3: Sichuan earthquake donations breakdown! 77 ...............................................................Table 4: Trust in NGOʼs by education level (2008)! 78 ...........................................................................Table 5: Trust in NGOʼs by religion (2008)! 79 v List of Figures Figure 1: Survey response for donating money to charity and ................volunteering time! 10 .........................Figure 2: Total recorded donations (2005-2011) in billion Chinese remimbi! 18 .....................................................Figure 3: Gini Coefficient of the PRC, Canada and USA! 23 ......................................................................Figure 4: Trust in NGOʼs between 2002-2008! 33 ...................................Figure 5: Public satisfaction with civil society information disclosure! 54 vi List of Abbreviations ABS – Asian Barometer Survey ADB – Asian Development Bank APPC – Asia Pacific Philanthropy Consortium CASS – Chinese Academy of Social Science CCDIC – China Charity and Donation Information Center CCP – Chinese Communist Party CFC – China Foundation Center COP – Center on Philanthropy at Sun Yat-sen University CSR – Corporate Social Responsibility CYL – Communist Youth League GATT – General Agreement on Tariffs and Trade GONGO – Government-Organized Non-Governmental Organization ICS – Institute on Civil Society at Sun Yat-sen University ISTR – International Society for Third-Sector Research MCA – Ministry of Civil Affairs MoF – Ministry of Finance NPC – National Peopleʼs Congress NPI – Non-Profit Incubators NGO – Non-Governmental Organizations NPO – Non-Profit Organizations OECD – Organization for Economic Co-operation and Development PRC – Peopleʼs Republic of China RCSC – Red Cross Society of China SVG – Social Venture Group VAT – Value Added Tax WTO – World Trade Organization vii Acknowledgements I pause to give thanks to the faculty  and staff of the Institute of Asian Research (IAR), with- out whom this paper would not be possible. First and foremost of whom, I wish to thank my readers, Dr. Paul Evans and Dr. Timothy  Cheek for their assistance throughout the researching and writing process. Others at IAR and UBC that have guided and assisted me throughout are, in no specific order, Dr. Julian Dierkes, Kerry  Ross, Kiley Fithen, Jing Liu and especially, to Dr. Pitman Potter who helped me develop this topic originally. To my  fellow students at the UBC, thank you for your questions, attention and encourage- ment throughout this process. I wish to specifically  thank Itay  Wand for his enduring encour- agement and thoughtful questions and Dominic Ross for his gracious generosity. During my  research, I benefitted greatly  from conversations that I had with a number of indi- viduals. I want to specifically  express gratitude to the following individuals for their assistance: Lawrence J. Ho, Dr. Shawn Shieh, Dr. Anthony  Spires, Dr. Miu Chung Yan, Erin Williams, Dr. Xijin Jia, Ted Lipman, and Dr. Lam Wai-fung. Special thanks go to my wife Morgan, who has supported me throughout these years of graduate study  - who has always been steadfast in her encouragement, thoughtful in her cri- tique and excellent in her editing. To my  parents and brothers, I offer continued appreciation for their interest in my research and work paths throughout the years. Data analyzed in this thesis were collected by the Asian Barometer Project (2003-2008), which was co-directed by  Professors Fu Hu and Yun-han Chu and received major funding sup- port from Taiwanʼs Ministry  of Education, Academia Sinica and National Taiwan University. The Asian Barometer Project Office ( is solely  responsible for the data dis- tribution. The author appreciates the assistance in providing data by  the institutes and individu- als aforementioned. The views expressed herein are the author's own. And finally, to the Hong Kong-Canada Business Association and the UBC Go Global pro- gram for their financial support to conduct research in Hong Kong and China. viii Introduction An international poll asked individuals in 153 countries ʻif they had donated money  to a charity.ʼ1 The response from the Peopleʼs Republic of China (PRC) is discouraging. Of East Asian countries surveyed, the Chinese give the least. When compared to the rest of the world, the response is not much better - just 11% of respondents indicated that they  had given money within the last month - ranking near the bottom, at 120 of 153 countries. In 2010, a much her- alded visit to the PRC by two of the worldʼs most giving individuals, Warren Buffet and Bill Gates - there to encourage the Chinese rich to consider giving away  some of their wealth - was largely unsuccessful. In the press, the visit was portrayed (in both the East and West) as evidence of Chinese stinginess. Even more troubling are the results of an international report that indexes countries according to their ʻgiving of money,ʼ ʻvolunteering of time,ʼ and ʻhelping a stranger.ʼ Of the countries indexed, the PRC ranks in the bottom 10th percentile - ranking below Algeria, Mo- zambique, and Togo; and just above Cote dʼIvoire and the Palestinian Territory. This evidence suggests that the Chinese are not generous with their resources - their money, time, or help. But is this true? What we hear about is the staggering growth in the PRC and stories of untold riches that are being created - is it really  true that they  are not sharing their resources? In a socialist state so rooted in cooperative social, political and economic systems - do the Chinese really give so little in comparison to other countries? The argument made throughout this paper is that the Chinese are generous, and are giving at increasing rates. Giving has increased dramatically  over the past decade in the PRC. Over the past six years giving has had an average annual growth rate of 171%; from 3.1 billion Chi- nese Remimbi in 2005, to 35 billion in 2011.2 Civil society - the largest recipient of donations - is 1 1 The GALLUP® WorldView World Poll included this question in 2010 and 2011. (Copyright © 2009 Gal- lup, Inc. All rights reserved. The sample size is at least 2,000 with a margin of error ± 3 percentage points. Data was retrieved March 2010 and February 2012.) 2 Two years during the same period of time have had greater total giving. In 2008, total giving was 107 billion Chinese Remimbi and in 2010, the total was 70 billion. Over the past twelve years (1999-2011) the average annual growth rate is 1450%; from the relatively small total of 200 million Remimbi in 1999, to 35 billion in 2011. The total growth rate between 2005-2011 is 1029%; and between 1999-2011, it is 17400%. All donation figures are collected by the Ministry of Civil Affairs and published in annual reports and posted on their website. For more information, see Table 2 in the Appendix. also growing rapidly, growing by  60%  between 2007 and 2010. Press coverage of benevolent behavior and giving is becoming ʻpopularʼ with famous actors and rich individuals sharing their wealth. Fundraising appeals in the media and on the web are commonplace. Where terms like ʻcharityʼ and ʻphilanthropyʼ were once not heard of, they  are now becoming widespread. Within business circles, corporate giving in the name of corporate social responsibility  (CSR) is of growing interest. This evidence suggests that the Chinese are generous with their resources - and that they do give their money - at increasing rates. If the polling evidence suggests that Chinese are not generous with their resources, then why  do other indicators - such as overall increased giving, civil society  and fundraising - support the opposite? Is it because the rest of the world is increasing their giving at a greater rate than the PRC? Or, is it because the rest of world (the other 152 countries in this case) have been in- creasing their giving for a longer period of time and thus the comparison is based on two differ- ent scales? Are differences in culture or social norms, religious or familial customs, causing these discrepancies? Or does it have to do with dissimilar economic or political systems? The answer is likely at little bit of all of the above - but there must also be reasons of greater signifi- cance that shape these differences more than others. What are they and what do they  have to say  about the current state of giving in the PRC, and more importantly  - what does the future hold? These are important questions that have broad consequences for Chinese society as well as the rest of the world. One answer to the divergent evidence is that these two perspectives are rooted in different interpretations of society  and giving behavior. The Poll and Index are produced from a Western perspective - one where gathering information about whether or not an individual gives to char- ity  (volunteers and help strangers) is an authoritative indicator for giving behavior. This is, how- ever, not an authoritative indicator of giving behavior in the PRC. Giving occurs in different forms in the East than in the West. While a westerner is accustomed to giving to a ʻcharity,ʼ a Chinese individual is less so. While giving does occur, as will be explored in this paper, the characteristics are different. In most western countries it is seldom the case to give money  to the government for charitable purposes. In the PRC, the government is a large collector of 2 donations.3  When the GALLUP® Poll was taken; did respondents include giving made to the government as money donated ʻto a charityʼ? There are other characteristics unique to Chinese giving contexts that skew polling data as well. Giving does not always occur voluntarily. Sometimes individuals are coerced into giving donations through their employer by  peer pressure mechanisms. There are even reports where employees of government and state owned enterprises have their wages garnished without permission. In response to the Sichuan earthquake, ʻspecial party  duesʼ were requested to re- spond to the relief effort.4 Would a respondent include these types of ʻgivingʼ in their survey re- sponse? This paper will explore the giving that occurs in the PRC and the influences on that giving - which we will call - individual philanthropic giving with Chinese characteristics. To understand these particular characteristics, we will begin by  examining the social, cultural, economic and political factors that influence giving in Chapter One. The first section details the economic influ- ences, such as the significance of industrialization and neoliberalism on Chinese society as well as wealth creation and business practices. The second section considers the social and cultural influences which include religious and philosophical beliefs, familial customs, dimensions of trust, and the significance of diaspora giving and technology  on giving. The last section includes an evaluation of the political influences which include the current five-year plan (Twelfth Guide- line: 2011-2015), the role of taxes as incentives and behavior modifiers, the effect of media and, changes that are occurring to social welfare and insurance structures. Chapter two examines the regulatory  framework - such as laws and regulations - that influ- ence giving. In this section, the existing tax and donation laws that stipulate the types of permis- sible giving will be examined; followed by an evaluation of the lawsʼ effectiveness in regulating giving. Chapter three reviews other developments occurring around the country  by  local authori- ties responding to crises related to transparency and reporting requirements of civil society. It 3 3 During the Sichuan earthquake relief in 2008 the government was the single largest collector of charita- ble donations. (See Table 3 in Appendix for more information.) Additionally, in 2010, “60 percent of do- nated funds were given to government-supported organizations” such as: 34.8% to various foundations, 22% to federations and 20.6% to all levels of Civil Affairs offices. Xinhua, March 16, 2011, accessed Feb- ruary 25, 2012, 4 See Table 2: Sichuan earthquake donations breakdown in the Appendix. also provides an analysis of the proposed Charity  Law being considered by the National Peo- pleʼs Congress and other national level initiatives being made to encourage giving. Throughout this paper recent events will be used to further illustrate the characteristics of giving in the PRC. The two events most commonly  used to demonstrate PRC giving are the Sichuan earthquake in 2008 - when Chinese individuals donated record amounts of materials towards the relief efforts - and the public trust crisis of 2011. “Follow  the money” may  indeed be a cliché, but it is an apt investigative technique to under- stand Chinese characteristics of individual philanthropic giving in the PRC. By  following the money  (and resources), this paper will provide an interpretation of how giving in the PRC differs from giving in other countries around the world. This paper also offers academics and profes- sionals alike with a framework for future research and practical applications on the topic. Literature Review The lack of academic literature and research on giving in the PRC is noteworthy. There ex- ists much literature about civil society  but little on the specifics of giving. The literature that does exist focuses almost exclusively  on topics of civil society, which include: non-government or- ganizations (NGO), non-profit organizations (NPO), foundations, civic and social associations, and government-organized non-government organizations (GONGOʼs),5 on topics ranging from transparency  to independence, administrative issues to program management, to name a few. Most of these resources offer insights on how civil society  has developed in the PRC, but little about the resources that support their growth. What motivates individuals to give to civil society in the PRC? Ultimately, we intend to understand: Whoʼs giving, to Who, and Why? This paper intends to fill this gap in the academic literature by drawing on the resources that are available about giving and philanthropy in the existing civil society  literature. Though some- what unconventional for a paper of this kind, government, civil society, and business6 reports; 4 5 It is debated whether or not GONGOʼs should be categorized as civil society organizations in the PRC. For the purposes of this paper, GONGOʼs have been included as part of civil society because the majority of their activities fall outside of the state and market sectors. 6 It is important to note that while the subject of this paper focuses on individual philanthropic giving, there are many reasons, which will be explored below, to include businesses and corporations when discussing individual behavior. international surveys; media reports; statutes and regulations will also be used to bolster the argument contained herein. The limited independent literature on individual giving and philanthropy is likely  due in part to the difficulty  in providing a comprehensive insight about what has, and continues to be, an area of murky  understanding. Giving is principally  overseen by  the Ministry  of Civil Affairs (MCA, mínzhèng bù, 民政部) and other quasi-government organizations (such as the Red Cross Soci- ety  of China, the China Charity  Federation and other GONGOʼs) because of the limitations that are imposed on organizations for the collection of financial and material donations. Much of the information available that does exist about giving in the PRC is derived from government sources, which complicates the partiality  and perspective of the information published. Further- more, the statistics that are published by the MCA consist only  of those that are reported to the government – which largely  are the big donation collectors (government agencies7  and GONGOʼs). Donations made to grassroots civil society  organizations are often not represented in the official statistics. Although the donations made to grassroots organizations are likely to be diminutive when compared to the giving that occurs to the government and GONGOʼs, lack of this data does represent a sizable statistical gap. Furthermore, government statistics only  cap- ture the activities of the organizations that are officially  registered with the Ministry of Civil Af- fairs. However, as Yang Tuan of the Chinese Academy  of Social Sciences (CASS) has reported, less than half of the civil society  organizations (including grassroots organizations) that operate in the country  are officially  registered.8 These realities are due to the difficulties involved with the registration process and the limited scope of activities that are currently  permissible by  Chinese law. Because of these statistical gaps and the absence of any independent reporting organiza- tions, the ability  to provide a fully  comprehensive overview of the philanthropic sector in China is limited. 5 7 Government agencies, such as the MCA during the Sichuan earthquake, collected donations. 8 “I hope the definition of charity organizations can be broader in the charity law - with goals of serving the public interest or common good, all kinds of social organizations taking part in activities like poverty alle- viating, educational, medical or cultural activities should be included in … from this broad sense, the country now has about 1 million charity organizations, among which 410,000 are registered,” said Yang Tuan, chief editor of the Blue Book report and researcher with the social policy research center under CASS. Lan Tian, “Nation to have charity law within 2 years,” China Daily, September 17, 2009, accessed February 25, 2012, There are government entities that are focused exclusively  on civil society  and philanthropic behavior, but their information does not offer a comprehensive perspective on the state of mat- ters in the PRC. The most comprehensive annually  published government resource about the growth of the sector has only been available since 2007. The Annual Report on Chinaʼs Philan- thropy Development – known as the Blue Book Report – is produced jointly  by  the Ministry  of Civil Affairs and CASS. It is wide-ranging and informative, but a fundamentally incomplete data source that provides macro-level information about philanthropic sectors in the PRC. The an- nual report outlines the various issues that the sector focuses their activities on, as well as pro- vides statistics about the previous yearsʼ growth and includes suggestions for future develop- ment of the sector. Another government resource is the China Charity  and Donation Information Center that “promotes the credibility  of charitable organizations standards”9 and disperses in- formation about the sectors activities in China. There are independent organizations and academic institutions that are producing literature and statistics on giving and philanthropy  in the PRC. China Development Brief10 has proved in- valuable for its resources and personnel support during the research and writing phases of this paper. Their Special Issue: Philanthropy and Civil Society in China (Summer 2011) proved to be a timely confirmation of many  of the conclusions contained within this paper. The China Founda- tion Center11 (CFC) provides resources on public and private foundations as well as foreign do- 6 9 Charitable contributions in the public information center (China Charity & Donation Information Center) is sponsored by the Ministry of Civil Affairs and was established in October 2006. The Center focuses on promoting the credibility of charitable organizations standards, creating a third-party evaluation system to guide the establishment and industry self-regulatory mechanisms, gradually establishing charitable con- tributions statistical information, and provides disclosure and public announcements ( 10 China Development Brief is an independent, non-profit publication devoted to strengthening construc- tive engagement between China and other countries ( and 11 The China Foundation Center maintains a database about foundations in the PRC to increase trans- parency and public confidence in charities; and actively promotes the growth of donations to solve social problems ( nations. China Philanthropy (a Blog of the Social Venture Group12) provides a comprehensive perspective on the developments of philanthropy in the PRC. Chinese academic institutions also provide resources and published articles. The most helpful of these are: Sun Yat-sen Univer- sityʼs Center on Philanthropy  (COP) and Institute on Civil Society  (ICS), Chinese University  of Hong Kongʼs Centre for Civil Society  Studies, the Center for Governance and Civil Society  at the University  of Hong Kong, NGO  Research Center at Tsinghua University, Center for the Third Sector, Shanghai Jiao Tong University, and Civil Society  Center at Peking University.13  North American institutions that served as resources include: The Hauser Center for Nonprofit Organi- zations at Harvard University14, The Center on Philanthropy at Indiana University15, and the Center for Civil Society  Studies at the Johns Hopkins Institute for Policy  Studies16. International institutions that have proved invaluable to this research process include: the Asia Pacific Philan- thropy  Consortium (APPC)17 (now  a project of Give2Asia), the International Society for Third- Sector Research,18 and Give2Asia19 of The Asia Foundation.20 Of particular interest to this paper is the conclusion offered by  Investing in Ourselves: Giving and Fund Raising in Asia, which confirms what cultural anthropologists have long stated - “that philanthropy takes place everywhere, in all cultures” - and in Asia, philanthropy is not a Western import.21 There are many  influences that Western philanthropy and civil society  have exerted on Asian giving, but the foundations for giving - the motivations behind Asian giving - are not West- 7 12 Social Venture Group's (SVG) mission is to assist individuals, families, businesses and foundations to identify and evaluate strategic charitable opportunities in China. SVG performs due diligence, ongoing monitoring and evaluation of projects to empower donorsʼ giving decisions. They seek to build a commu- nity of Chinese and overseas donors for China social sector in the 21st century ( 13 An exhaustive list of research institutions in China is included in the Appendix. 14 15 16 17 18 19 20 21 Asia Pacific Philanthropy Consortium, Investing in Ourselves: Giving and Fundraising in Asia (Philip- pines: Asian Development Bank, 2002), Xiii. ern. The argument contained within this paper agrees with this conclusion and will explore the non-western influences and highlight the characteristics of Chinese giving. Although this paper is not about the development of civil society  in the PRC, it recognizes that civil society  is intricately  linked to giving behavior. That said, there are many  issues that concern civil society  as well as giving that need to be reviewed throughout this paper. One of those is the debate over whether civil society is state-led, or autonomous in the PRC. Brook and Frolic (Civil Society in China) advance the idea of a state-led civil society. The argument throughout this paper supports the view that the largest entities within the broadly  defined ʻcivil societyʼ - such as GONGOʼs - are state-led; but the majority  of civil society  - that is the majority of registered and unregistered civil society  organizations - are not state-led. These civil society organizations are largely  autonomous and permitted to act freely  within their registered charter. This debate affects giving in two ways: the collection of donations and the securing of financial grants. The state-led entities have broad access to these two revenue streams. They are permit- ted to fundraise and are benefactors of government grants. The non-state-led segment of civil society  are not permitted to fundraise (except for rare circumstances) and administrative obsta- cles often prevent access to government grants. Spirit of Chinese Philanthropy, published in 1912, provides a very  insightful perspective on the thought, practice, and historical influences on philanthropy  in China. This volume was par- ticularly  important for its overview and evaluation of all entities that existed in China which worked in the field of philanthropy  such as: charities; grass roots organizations that met the needs of aged women and widows, orphans, destitute, and sick; clan organizations; village community societies; and the governmentʼs involvement.22 Because this paper also focuses on the government factors that influence giving and philan- thropic behavior, a thorough review of laws, policies, and official communications was con- ducted. Some of the most informative resources are the current tax laws (individuals and corpo- rations) that influence behavior and incentivize giving. For example, if a person or entity  gives resources to an organization, they can claim a tax deduction for their giving up to a statutorily 8 22 Yu Yue Tsu, The Spirit of Chinese Philanthropy; a study in mutual aid (New York: Columbia University, 1912). regulated amount. Of particular importance were the implementing regulations that give further explanations about how to interpret the tax laws. Methods The research methods employed in this paper are both qualitative and quantitative. The process of selecting the appropriate methods began with a thorough review of the publicly available social, economic and political resources. During this process, two quantitative interna- tional surveys and one domestic survey were discovered and are utilized throughout. They pro- vide both a broad perspective on giving and philanthropic behavior in the PRC as well as indica- tors for social and economic influences. They are: the Asian Barometer, co-hosted by the Insti- tute of Political Science, Academia Sinica and The Institute for the Advanced Studies of Hu- manities and Social Sciences, National Taiwan University; and, Gallupʼs Worldview World Poll. Qualitative methods were used to gather an in-depth understanding of the influences that govern philanthropic giving in Chinese culture. Ethnographic research methods were also em- ployed to investigate the influences that Chinese culture, Confucian thought, religious beliefs, family and business structures, and other cultural influences that affect giving patterns. Field research was conducted during October and November 2011, which consisted of semi- structured conversations with civil society  and philanthropy  practitioners, and academics in Bei- jing and Shenzhen, China; Hong Kong; and Vancouver, Canada. Although the conversations that occurred during that period of time are not directly  quoted in this paper, the non-participant observation and learning that occurred during this field research proved invaluable to under- standing and interpreting other data used in the research and writing of this paper. Additionally, an analysis of documents and materials included a thorough review of media publications (between October 2010 and March 2012), NGO annual reports, academic litera- ture, philanthropy  and civil society  periodicals and journals, and organization and government reports. Why Individual Giving? Individuals from all societies give their time and money to causes, but levels of giving be- tween regions and countries of the world differ greatly. A recent report called the World Giving 9 Index – which interprets Gallupʼs Worldview World Poll statistics – provides an original and comprehensive global perspective on charitable behavior. This report scored individuals in 153 countries – covering 95%  of the world's population – on whether they  had donated money to an organization, volunteered their time, or helped a stranger. China ranked near the bottom of the index at 147th.23 The breakdown of who is giving in the PRC - according to the GALLUP® Worldview statis- tics - is particularly  thought provoking. Figure 1 shows the responses to the questions about whether or not the respondent had “donated money to a charity” and “volunteered [their] time to an organization” in four age categories. Just 12% of those surveyed between the age 15 and 24 answered “yes” to having donated money; and only  8% of those aged 50 years or more an- swered “yes” to the same question. Of those surveyed, only 6% in the 15-24 age bracket said 10 23 By comparison, Canada was ranked 3rd, after Australia and New Zealand, and the United States was ranked 5th. Other notable rankings in the Asia Pacific region are: Thailand (25th), Republic of Korea (81st), Singapore (91st), Japan (119th), Vietnam (138th), and China (147th). This index ranking was the impetus for this paperʼs topic and research. Charities Aid Foundation (CAF), The World Giving Index 2010 (United Kingdom: CAF, 2010). Figure 1: Survey response for donating money to charity and volunteering time. Data retrieved from the GALLUP® WorldView database, March 2010. (Copyright © 2009 Gallup, Inc. All rights reserved.) 0% 5% 10% 15% 15-24 25-34 35-49 50 and over 2% 3% 4% 6% 8% 10% 9% 12% Donated money Volunteered time that they  had volunteered their time and only 2% of those aged 50 or more did the same. The younger respondents are more likely  to give money  and volunteer their time than the older age brackets.24  One begins to ask, why  is a culture with traditions of charity  and benevolence throughout history  at the bottom of a global giving index? And, what are the social, cultural and political influences that encourage or discourage giving in the PRC? Much of the existing research on giving in the PRC is centered on wealthy and celebrity giv- ing, corporate social responsibility, and corporate giving. However, if the PRC trends towards giving patterns in other parts of the world, corporate giving will only  represent a small portion of total charitable activities when compared to individual giving. For instance, in the United States, corporate philanthropic contributions represent four percent of total charitable giving and indi- viduals represent 75%.25 By  comparison, over 60% of charitable giving in China originates from for-profit businesses.26  But, giving by wealthy and famous individuals in the PRC represents only  a small percentage of total donations.27 Because this paper focuses on the issue of individ- ual giving that has been largely  overlooked by  previous academic research - and not on corpo- rate and celebrity  giving that represents a small and decreasing portion of total giving - this pa- perʼs findings will explain issues that have substantial influence on the future of giving and the growth of civil society in China. Worldwide, individual giving has increased dramatically  over the past few decades.28  Al- though individual giving in China has grown at a slower rate, exhibits more varied behavior, and is exceptionally susceptible to negative public opinion – there is much opportunity  for growth. Civil society, which is a sector that is dependent on individual and corporate philanthropy to sus- 11 24 GALLUP® asked the following questions in their poll: “Have you done any of the following in the past month? How about donated money to a charity? How about volunteered your time to an organization? How about helped a stranger or someone you didn't know that needed help?” (Data was retrieved from the GALLUP® WorldView database on March 2010. Copyright © 2009 Gallup, Inc. All rights reserved.) 25 Contributions in 2009 by source are in billions: Individuals, 227.4 (75%); Foundations, 38.4 (13%); Be- quests, 23.8 (8%); and, Corporations, 14.1 billion (4%). (Giving USA Foundation, Giving USA 2010: The Annual Report on Philanthropy for the Year 2009 (Chicago: Giving USA Foundation, 2010), 4.) 26 China Charity Donation Information Center - Chinese Ministry of Civil Affairs, 2009 Annual Report on Charitable Donations in China (2009年度中国慈善捐助告) (Beijing: MCA, 2009), 5. 27 See “Extreme Wealth” for more information on this topic. 28 Hudson Institute, The Index of Global Philanthropy and Remittances 2010 (Washington: Hudson Insti- tute, 2010). tain their activities, is also growing.29 With the dramatic economic growth China has experienced in the past three decades, individual philanthropic giving has the potential for equally  dramatic expansion. Plainly  stated, the reason individual giving was chosen as the topic of this paper is because it will likely become the single largest source of philanthropic giving in the PRC. What is Individual Philanthropic Giving? The term used throughout this paper - individual philanthropic giving - is a term that attempts to integrate many  different terms such as: charity, philanthropy, benevolence, welfare and dona- tions for both the eastern and western reader. To the western reader, some of the terms used to describe philanthropic giving in the PRC, when translated into English, would be difficult to understand.30  In the PRC, there are words used that are widely  accepted, and those that are not.31 For instance, philanthropy  (Císhàn shìyè, 慈善事) is a widely  understood and accepted word in western cultures. However, in the PRC, “philanthropy” has a bourgeois, or capitalist fla- vor to it that may elicit thoughts of humiliation due to a history  of having to rely  on the alms of foreign missionaries.32 Although the usage of philanthropy  is growing in the PRC, the term still has negative connotations associated with it.33 Similarly Individual philanthropic giving, is the voluntary provision of financial or material donations made by  an individual compelled by the desire to improve the material, social, and spiritual wel- fare of humanity. 12 29 Willie Cheng and Sharifah Mohamed,The world that changes the world: how philanthropy, innovation and entrepreneurship are transforming the social system, (Singapore: Wiley, 2010), 22-23. 30 A term that is often used in the PRC is “social welfare” (Shèhuì fúlì, 社会福利). 31 Less than two decades ago, the term “non-governmental organization” (Fēi zhèngfǔ zǔzhī, 非政府) implied antigovernment activism. (Nick Young, “Richesse Oblige, and so does the State: Philanthropy and Equity in China,” in Diaspora philanthropy and equitable development in China and India, ed. Peter F. Geithner et al. (Cambridge, Massachusetts: Global Equity Initiative, Asia Center, Harvard University, dis- tributed by Harvard University Press, 2004), 58.) 32 Ye Zhang, “Foundations in China: A Survey Report,” in Emerging Civil Society in the Asia Pacific Com- munity: Nongovernmental Underpinnings of the Emerging Asia Pacific Regional Community, ed. Tadashi Yamamoto (Singapore: Institute of Southeast Asian Studies, 1996), 529. 33 Wang Ming, Emerging Civil Society in China, 1978-2008 (Netherlands: Kroninklijke Brill NV, Leiden, 2011), 149-150. Giving and Civil Society After the state and the market exists the third pillar of society  – civil society. As opposed to the market and the state, civil society  is based on voluntary social relationships. It consists of civic and social organizations and institutions that seek, through collective action, common in- terests, principles and values. Although distinctions between civil society, the state, and the market are often hard to distinguish in the PRC, the most poignant idiosyncratic characteristic is a voluntary or altruistic focus of civil societyʼs activities. In the West, civil society  has emerged as a powerhouse of oppositional politics and social transformation.34  Rapid changes to social and political structures brought about by neoliberal changes to commerce and governance have caused much consternation in many  societies. In response to this growing concern, civil society  has offered an alternative perspective to both the state and the market. Groups of people have increasingly  been turning to civil society  to coordi- nate collective action, form consensus, and petition their rights on issues of inequality  and injus- tice. The efforts of civil society  have become an integral part in addressing societyʼs common interests at the national or international level through consensus and collective action. However, civil society  largely  consists of non-elected organizations and institutions.35  The common interests that they  address are often decided by  a non-democratic process and have limited accountability. The funding mechanisms by  which they operate are periodically  shrouded in secrecy  – making it easy for individuals (and corporations) to influence their initiatives and activities. But, there are many civil society  organizations which are democratic in nature and are accountable. These organizations tend to exhibit the following three characteristics: transpar- ency, independence and reliability.36 In the PRC, the development of civil society  institutions has largely  been limited by  the state because of concerns about the collective action they  are known for organizing in other places in 13 34 Nancy L. Rosenblum, and Robert Post, Civil society and government (Princeton, N.J.: Princeton Uni- versity Press, 2002).; and, Simone Chambers and Will Kymlicka, Alternative conceptions of civil society (Princeton, N.J.: Princeton University Press, 2002). 35 David Harvey, A Brief History of Neoliberalism (Oxford: Oxford University Press, 2005), 78. 36 These organizations are reliable in the sense that they are able to be trusted, or have a significant cache of social trust. the world.37  Any  critique of government performance, the rapid expansion of the economy, changes in socio-economic status, labor unrest, or inequality  that would likely  be heralded by civil society  in the PRC is not welcome. Therefore, the existence of civil society  and the growth of philanthropy  is limited to defined areas of operation. Civil society  in the PRC is not free to en- gage in debate about societal issues of concern but rather relegated to address issues of healthcare and education – issues that often donʼt elicit protest. The oppositional (and coordina- tive) politics of western civil society  is not welcome in the PRC. These realities have resulted in a small and passive civil society  that has limited opportunities for both their opportunity  to grow and to define its future. The regulatory  boundaries imposed on civil society  intersect the individual philanthropic giv- ing that occurs in the PRC in numerous ways. For example, if an individual does not have an entity  to give money to – giving will be affected. Likewise, if an individual is not solicited for money  – giving will be affected. If incentives exist for giving, but no one knows about them – giv- ing will be affected. In Chapter One, we begin to explore these and other Chinese characteris- tics that influence individual philanthropic giving. 14 37 Timothy Brook and B. Michael Frolic, Civil Society in China (New York: M.E. Sharpe, 1997), 9-10. Chapter 1: Chinese Characteristics • For 2,000 years the Chinese were subjects; since 1949 we have been citizens. This [Sichuan earthquake] is very important to awaken a sense of volunteer spirit and civil society, even if it does not exist yet.38 In 2008, the Chinese people responded to the tragic earthquake in Sichuan Province with unprecedented record-shattering donations.39 The total given in the weeks following the earth- quake was more than to total given during the whole previous year.40 Volunteerism also spiked with an outpouring of support. Individuals from all over the country  loaded supplies into personal and public transportation, and headed to the disaster area to assist with the relief efforts. The government had allowed organizations to collect donations and coordinate relief efforts, both of which were previously solely  the responsibility of the government, or government- organized non-government organizations (GONGOʼs). Because of these changes, there was much to be optimistic about from the perspective of civil society  organizations in China. Civil so- ciety  was able to operate with autonomy  and without much government oversight in the days immediately following the disaster. Optimism ran high because in the Peopleʼs Republic of China (PRC) there is a tension be- tween civil society  and government.41  A tension that is longstanding and rooted in the PRCʼs wariness of the activities and motivations of civil society. This tension plays itself out in the ways 15 38 This statement is made by the founder of an NGO named Zhai Yan shortly after the Sichuan earth- quake, whose organization offers psychological counseling to earthquake victims. (Peter Ford, “China quake: controls cautiously lifted on flood of volunteers,” The Christian Science Monitor, May 29, 2008.) 39 Ming, Emerging Civil Society in China, 165.; and, Shawn Shieh and Guosheng Deng, “An Emerging Civil Society: The Impact of the 2008 Sichuan Earthquake on Grassroots Associations in China,” The China Journal 65, (January 2011): 193. 40 Within the two weeks following the earthquake 30.876 billion yuan was given, which was just short of the total donations given in 2007, 30.9 billion yuan. The total donations attributed to the earthquake relief efforts, as reported by the Ministry of Civil Affairs, is 76 billion yuan. (Jia Xijin, “Chinese Civil Society After the 512 Earthquake,” Policy Forum Online, 08-056A, July 22, 2008, accessed February 2, 2012, 41 Brook and Frolic, Civil Society in China, 72. the PRC regulates and monitors the activities of civil society  organizations, and by  curtailing their ability to raise money for their activities with laws and regulations. Although not said in the same words, many individuals thought that the Sichuan earthquake (known as the Wenchuan Earthquake in the PRC) had been the tipping point for the develop- ment of civil society in the PRC.42 The state-run media heralded the outpouring of support, and as a result, a nationalistic swell of pride consumed the nation with reports of heroism and ex- treme acts of charity. This then encouraged more giving and volunteering. During this time, so- licitations for donations were ubiquitous; television, newspapers and the Internet were filled with opportunities to give money. Many  individuals gave money and volunteered for civil society  or- ganizations that had never given before. The context within which the earthquake occurred is also particularly  important. May 12, 2008 (when the first and largest earthquake occurred) was just three months before the Beijing Olympics. The PRC was getting ready to show off their country to the world when the earth- quake struck. For seven years,43 China had been promoting and preparing for this international event. Pride and nationalism ran high in the run-up to the Games. This had a large significance on the response of the government and citizens to the earthquake. Had the earthquake oc- curred at a different period of time – it is likely that the response would have been different. The location of the earthquake is also important. It was in an area that does not have many ethnic tensions (as opposed to the 2010 Yushu earthquake located in the Tibetan Autonomous re- gion44) and therefore the government had fewer concerns over the activities of civil society  while 16 42 Guobin Yang, “A Civil Society Emerges From the Earthquake Rubble,” YaleGlobal Online (June 5, 2008).; Amy Gadsden, “Earthquake Rocks Civil Society,” Far Eastern Economic Review (June 2008).; Gong Yidong, “Feature: Giant quake proves Chinese NGOs' rising force,” Xinhua, May 26, 2008.; Asia Development Bank (ADB), People's Republic of China: Providing Emergency Response to Sichuan Earthquake (Manila: ADB, December 2008), 22.; “Death toll from China's May earthquake remains un- changed at 69,227,” Xinhua, September 25, 2008.; Maureen Fan, “Citizens' Groups Step Up In China Wary Rulers Allow Role in Quake Aid,” Washington Post Foreign Service, May 29, 2008.; Peter Ford, “China quake: Controls cautiously lifted on flood of volunteers,” The Christian Science Monitor, May 29, 2008. 43 China was awarded the Olympic Games on July 13, 2001. 44 On April 14, 2010, the Yushu earthquake struck the Tibetan Autonomous region; nearly 2,700 were re- ported dead and over 12,000 injured. in the region. The response could also be linked to the size and scale of the natural disaster - over 69,000 persons died in the event - one of the largest natural disasters in recent history.45 In 2012, the expected tipping point has not become a reality. Total donations in 2011 are only  half of the total donations in 2010; and a third of donations given in 2008.46  These de- creases are largely  due to many  well-publicized media reports highlighting issues surrounding the transparency  of donations and the unfettered spending of those donations. Public sentiment in 2011 exhibits both positive and negative perceptions. However, there are many  examples across the country forecasting rapid growth of the sec- tor. They do not involve natural disasters this time, but rather laws and regulations. Cultural, po- litical and economic factors have changed since 2008. Giving has grown significantly  over the past decade. Many  indicators point to a surge of charitable giving if the PRC provides opportuni- ties for individuals to donate resources, and civil society  organizations the opportunity  to solicit donations. The PRC has been drafting a Charity  Law that outlines regulatory  changes that could harness the charitable behavior of 1.34 billion people to address the social, cultural and eco- nomic needs of Chinese society  and the world. The question remains though: Is individual phil- anthropic giving in the Peopleʼs Republic of China now at a tipping point? Globally, individual philanthropic giving has grown dramatically  over the last three decades. In the PRC, growth has also occurred in dramatic proportions but has been concentrated in the past decade.47  In 2005, total donations reported to the Ministry  of Civil Affairs was 3.1 billion Chinese Remimbi (490 million USD). Between 2005 and 2010 giving has increased dramati- cally. In those five years, giving increased to 70 billion Chinese Remimbi (11 billion USD) - an increase of 2,158%. 17 45 In addition, more than 374,000 persons were injured. It affected more than 45 million people in 10 prov- inces and regions. More than 5.3 million buildings collapsed and more than 21 million buildings were damaged. Some 15 million people were evacuated and more than 5 million were left homeless. The eco- nomic loss was estimated to be 86 billion USD. (US Geological Survey poster, “M7.9 Eastern Sichuan, China Earthquake of 12 May 2008,” poster, USGS, May 2008.) 46 Donations in 2010 were 70 billion yuan, and early data predicts total donations to be 35 billion yuan ($5.6 billion USD) in 2011, “Charity Briefs,” China Daily, January 16, 2012, accessed January 17, 2012, 47 Literature suggests that this growth began in the early 1990ʼs. But, the literature that does exist is very limited, so this period of time is omitted from this paper. But, for the first time since 2005, giving has actually  decreased in 2011 (when excluding the Sichuan earthquake relief48). Between 2010 and 2011, giving has deceased by  50% to 35 billion Remimbi (5.5 billion USD). Figure 2 illustrates the growth and recent decline in giving. Individual and corporate philanthropic giving is a small, but growing portion of Chinaʼs Gross Domestic Product (GDP). Total charitable giving is 0.01%  of GDP, lower than other BRIC economies, and much lower than many  developed economies which exhibit a figure closer to 2.2% of GDP.49  Since statistics started being recorded on philanthropic giving, corporations have been the single largest givers. However, in 2008, CASS reported that individual donations surpassed corporate donations for the first time, accounting for 54 percent of the total 18 48 Government statistics distinguish between the giving that occurred in response to the Sichuan earth- quake and the giving that occurred for other purposes. 49 Chinese Academy of Social Sciences, The Annual Report on Chinaʼs Philanthropy Development 2009, (Beijing: CASS, 2010). Figure 2: Total recorded donations (2005-2011) in billion Chinese remimbi 0B 50B 100B 150B 2005 2006 2007 2008 2009 2010 2011 76B 35B70B33B31B31B10B3B Total Donations Sichuan Earthquake Relief 2005-2010: Data from the Annual Report on Chinaʼs Philanthropy Development published jointly by the MCA and the CASS, 2011 data is preliminary and published by the CCDIC. donations.50  Since then however, corporations have retaken their place as the single largest contributing sector. While corporate philanthropy will continue to grow with the increased inter- national and domestic focus on corporate social responsibility  (CSR), individual contributions are likely  to increase at a higher rate and surpass corporate donations permanently in coming years. Civil society is also growing at a fast pace. The total number of organizations is increasing annually. The Ministry  of Civil Affairs has reported that the total number of civil society  organiza- tions has increased by 60% between 2007 and 2010. Chinaʼs GDP growth has hovered around 10% for the past two decades.51 Although tempt- ing to correlate the growth of GDP with giving, they  are not directly  connected. The growth of an economy does have a large significance on the growth of the giving and civil society  because individuals (and corporations) have increased disposable income and time (and profit margins) to offer as contributions. But, having the capacity  to donate money, or time does not necessarily directly  correlate to changed behavior. It only  provides the opportunity  for individuals to contrib- ute, or participate. There are also the non-economic factors that influence giving such as socio-cultural and po- litical influences. Understanding them allows for a broader and more thorough perspective on the motivations that influence individual philanthropic giving. The sections below  offer a detailed analysis of the economic, socio-cultural and political factors that influence giving. Economic Since the end of World War II, the world has experienced the greatest economic expansion history  has ever seen. This growth was spurred largely  by  initiatives motivated by  the conviction that the world must not repeat the economic and social conflicts that brought about the last global war. Changes in global trade were largely  the avenues by  which these changes occurred but also included the state and civil society. 19 50 As reported by “New charity law to bring sector into line in S China,” Xinhua, September 24, 2010. 51 World Development Indicators, The World Bank. The General Agreement on Trade and Tariffs (GATT), which subsequently  became the World Trade Organization (WTO) were established to govern universal trade. (In 2001, the PRC becomes a member of the WTO after 15 years of negotiations.) But the global set of trade rules were not the only  international agreements established, underlying the trade rules were norms that guided the new trade principles. These norms were based on western ideals of human dig- nity  and individual freedom that were assumed to be the ʻcentral values of civilizationʼ.52  The same ideals that undergird GATT and the WTO  also influence the development and purpose of states and the role of civil society - and philanthropic giving. Neoliberalism, deregulation, liberalization, and privatization are terms that represent market- driven and market-centered approaches to economic and social order – guided by  ideals of hu- man dignity  and individual freedom. These terms, and their underlying meaning, all support the opinion that the private sector (market) is efficient, and the public sector (government) is less so. Neoliberalism also supports opening markets to competition, increasing the role of the private sector to influence political and economic priorities of the state and increasing the role for the private sector to provide services to the public that have traditionally  been provided by  the state. These market-centered approaches actively  oppose and curb the power of the state. Armed with the rationale that provides more efficient and cost effective alternatives to public sector services, the private sector has gained both market access into traditional public sector serv- ices, as well as reaped large profits from their activities.53 The effects of neoliberalism are far reaching. Virtually  no sector of society  is untouched by the market-motivated rationale of neoliberalism. From social policy  on a state-wide level to eve- ryday consumer decisions, the ingrained notions of neoliberalism have profound influence. Most consumers, government officials and businesspersons agree with the notion that the cheapest and most efficient option is the best choice. This decision makes much rational and economic sense. After all, the ideals of neoliberalism were created from Western norms that believe that human dignity  and individual freedom are fundamental human rights. Supplying consumer- 20 52 Harvey, A Brief History, 5. 53 Janice Gross Stein, The Cult of Efficiency (Toronto: House of Anansai Press Ltd., 2001). focused services cheaper and quicker to more members of society makes a lot of rational and economic sense. The significance of neoliberal policies on individual philanthropic giving and the development of civil society  in the PRC is not well understood, but has likely  both spurred and curtailed its growth. The PRC government has both embraced neoliberal principles and rejected them. The international trade rules and the institutions that promote neoliberalism have largely  been adopted (GATT and WTO), but the underlying norms and central values have not. Differences in culture, governance and history  all have large significance on the acceptance, or rejection of these rules and norms. Many of the effects of the PRCʼs embrace of neoliberal policies on indi- vidual giving can only  be drawn in loose correlations, but the following topics do offer some rich insight into how neoliberal policies have influenced individual giving in the PRC. Rapid Industrialization and Neoliberalism Rapid industrialization, spurred by  neoliberal changes to commerce and governance struc- tures, have created never-before-seen economic growth in the PRC. Since the conflicts of World War II, the PRC has lifted numerous persons from poverty, more than doubled itʼs popula- tion, and spurred an economic revolution that continues today. This growth has resulted in the expansion of a middle and upper class that has disposable income to purchase goods, and with the potential to give to others. China embraced neoliberalism ʻwith Chinese characteristicsʼ  under the leadership of Deng Xaioping beginning in 1978. His Xiaokang (xiǎokāng, 小康) reforms stimulated competition be- tween state-owned firms and allowed market forces to flourish within Chinaʼs borders.54 Dengʼs neoliberal reforms threw off the central planning of the past and integrated market socialism and promoted wealth creation. His now famous quote questioning “what does it matter if it is a gin- ger cat or a black cat as long as it catches mice?” epitomizes the changes in economic policy that occurred under Dengʼs leadership. In effect, the whole of China was opened up to market forces and foreign capital, though still under the watchful eye of the Chinese Communist Party 21 54 Harvey, A Brief History, 120. (CCP).55 To do so, the PRC incorporated market-based mechanisms to achieve economic de- velopment in an increasingly  globalized world. The state opened itself to foreign investment to acquire the technologies and manufacturing processes that offer greater benefit and profits. Because of Chinaʼs emerging role as an economic and political leader, it is increasingly  ex- posed and affected by the international community. These exposures have influenced the de- velopment of giving and civil society.56  Individuals and businesses are increasingly  getting in- volved in the development of civil society  by  donating resources and time. The inequalities that resulted from neoliberalism, however, have persisted and the underprivileged have increasingly turned to civil society  in times of distress. As reliance on civil society  increases, more resources are needed. Deadly  disasters in recent years such as the Sichuan earthquake and Zhouqu mudslide “have propelled people to lend helping hands and promote the philanthropic course in China,” says Vice Minister of Civil Affairs Dou Yupei.57 Wealth Creation Dengʼs famous quote, “to get rich is glorious,” epitomizes both the opportunities and conse- quences of his reforms on the economy  and society. Chinese communismʼs ethos of social or- ganization based on holding all property  in common was changing. His reforms did not benefit all Chinese equally  though. Income inequality  was becoming an issue of increasing concern.58 Increases in production and GDP growth disproportionately  benefited the managers and owners of businesses. Worker benefits from the economic growth that occurred was not proportional and only included small increases in wages and social protections. This gap  between the rich and poor is best illustrated by the Gini coefficient – a measure of inequality. Figure 3 represents the Gini coefficient in the PRC, Canada, and the United States. 22 55 Ibid., 125. 56 Look to Anthony J. Spires, “Organizational Homophily in International Grantmaking: US-Based Founda- tions and their Grantees in China,” Journal of Civil Society 7:3 (2011), form more information about the influence of the international community on the development of civil society in the PRC. 57 “China encourages philanthropy through legal, institutional measures,” Peopleʼs Daily Online, March 08, 2011. 58 Joseph Fewsmith, China Since Tiananmen: The Politics of Transition (Cambridge University Press, 2001), 70. In all three countries the ratio has increased in the past few decades. As can be seen though, the increase is particularly  dramatic in the PRC during the 1970ʼs and 1980ʼs. Inequality  is in- creasing. Profits and the reduced cost of production created by liberalizing economies do not benefit everyone in society. In 1986, workers began to express their angst against rising ine- quality. They  began to protest. Protests by  students sympathetic to the plight of the workers and a number of other worries culminated in 1989. The violent crackdown of the Tiananmen Square protests in that year indicates that neoliberalism changes ʻwith Chinese characteristicsʼ made to the economy were not going to be accompanied by advancements in other areas of society such as human, civil or democratic rights.59 But, this inequality  has created surplus wealth that has created opportunities for philan- thropic giving. Motivated by  cultural, Confucian and Buddhist notions of charity and benevo- lence, many individuals that have surplus income have begun giving a portion of their wealth to meet the needs created by the rising inequalities. 23 59 Harvey, A Brief History, 123. Figure 3: Gini coefficient of the PRC, Canada and USA Data sources: PRC: Ravallion and Chen, 2004. China Statistical Yearbook (State Statistical Bureau, 1992, 1996 and 1997, 2001); USA and Canada source: OECD. 0 0.1 0.2 0.3 0.4 0.5 mid-70s mid-80s ~ 1990 mid-90s ~ 2000 mid-2000s China USA Canada Business Culture Business in China is a personalized venture, often viewed as a family  or individual entity. This differs from western culture that often views business as a corporate - shared by  all mem- bers - venture that maintains a detachment from personal and familial activities. From the smallest family owned and operated businesses, to the largest of corporations in the PRC, the philanthropic activities of businesses are “often personalized as the good deed of the particular key  figure of the business concerned.”60 Philanthropic activities of a corporation are therefore commonly  viewed as the philanthropic activities of an individual or family  that operates the com- pany. This is of particular importance because, as discussed above, businesses represent a large proportion of total donations given annually. Furthermore, because the activities of busi- nesses gain a competitive edge by  limiting information,61  so too are the decisions made about giving. Business or corporate giving are private decisions that often lack transparent public re- porting of their activities. Corporate Social Responsibility  - or CSR - is the new buzzword within the global corporate community. Consumers are demanding more socially  conscious business practices and prod- ucts for their consumption - and corporations are responding. Further spurred by  profit margins and a changing corporate culture that increasingly  focuses on social and ecological issues as part of their product streams and business plans, corporations have started to promote their giv- ing and socially  responsible behaviors to consumers. Corporations that do not respond to this growing interest in CSR risk loosing market share. In response, many  businesses have begun initiatives to market themselves as socially responsible – which often, is in the form philan- thropic giving. This shift has brought some transparency  to the philanthropic activities of busi- nesses in the PRC. Chinese corporations are experiencing these consumer pressures and are starting to embrace corporate social responsibility. But, how much the growth of CSR in the PRC has influenced giving trends is difficult to extrapolate; and, where the line is drawn be- 24 60 Hsin-Huang Michael Hsiao, “Chinese Corporate Philanthropy in East and Southeast Asia: A Typology,” in Evolving Patterns of Asia-Pacific Philanthropy, ed. Ku-Hyun Jung (Seoul, Korea: Institute of East and West Studies, Yonsei University, 1994), 86. 61 Joseph E. Stiglitz, “The Contributions Of The Economics Of Information To Twentieth Century Econom- ics,” The Quarterly Journal of Economics (November 2000): 1448 and 1466. tween pure ʻindividualʼ giving and giving that occurs by businesses on behalf of individuals, is difficult to answer. The economic influences on giving are largely  an overview of the opportunities that have been created for giving to occur in the PRC. The vast amounts of wealth and surpluses that have developed in the past few decades increase the opportunities for individuals to give. Busi- nesses are focusing on being socially  conscious by pursuing CSR. Neoliberal policies that have largely  benefited market interests have also set the foundation for growth of civil society  and organized giving. Concepts such as transparency  and the suggestion that government may  not be the best at solving all of societyʼs needs are ideas that will likely  benefit the growth of philan- thropic engagement over the long term. Although none of these factors alone are going to fundamentally  shift giving, they  are some of the influences that affect individual philanthropic giving. Without the opportunities that the economic growth of the past few decades has created, the growth in giving that has occurred at the same time, would not be possible. We now turn to the social and cultural factors that influ- ence giving. Socio-Cultural Social and cultural influences on giving cannot be understated. They are the foundation from which people are motivated to give. An individualʼs sense of charity, compassion, generosity, patronage and, benevolence – words often associated with philanthropic giving behavior – are influenced by  the culture that surrounds them, the family  that they  are a part of, the society they live in, and the religion that influences all of the above. Socio-cultural influences vary  greatly  be- tween individuals, cultures and regions of the world. In the PRC this is no different. The response to the Sichuan earthquake is a good example of how social and culture influ- ences motivate giving. As pictures and video footage of the aftermath of the earthquake filled news sources, feelings of empathy  – which is the ability  to identify with and understand another personʼs feelings of difficulties62 – were omnipresent. Images were streaming night and day  de- tailing the suffering that was occurring. The public response was also being covered as “Chi- 25 62 Definition from Encarta World English Dictionary. nese and international media were allowed free reign in the earthquake region.”63 The response was an unprecedented64  outpouring of philanthropic behavior. People began to give of their time, money and materials. The display  of philanthropic behavior and giving was highly  influenced by  the social condi- tions of the time. The behaviors of those highlighted in the news reports were influencing the behaviors of individuals across the PRC and the world. The tremendous societal response by volunteers, companies and civil society  organizations included donating funds, volunteering and collecting materials to be sent to the earthquake zone.65 A week after the earthquake, just one organization (the Communist Youth League, 共青) reported having about 200,000 volunteers in the earthquake areas.66 The government had also mobilized over 130,000 PLA soldiers and paramilitary police.67  The social response was unprecedented. After just two weeks, public do- nations exceeded 30 billion Yuan (4.7 billion USD).68 To many at the time, this event was thought to be the tipping point for philanthropic behavior in the PRC. Media heralded 2008 the “Year of the Volunteer” and the “Year of Civil Society”.69 The unprecedented response was thought to have changed something in the social fiber of Chi- nese culture. The cultural motivations were thought to have tipped towards continued support of and interaction with civil society  as well as continued giving. Alas, it was not to be. The social resonance around the event waned shortly  after the news stopped reporting on the event and the nation turned to other, more positive news, the 2008 Beijing Olympics. 26 63 Shieh and Deng, “An Emerging Civil Society,” 185. 64 Guobin Yang, “A Civil Society Emerges From the Earthquake Rubble,” YaleGlobal Online, June 5, 2008.; Amy Gadsden, “Earthquake Rocks Civil Society”, Far Eastern Economic Review, June 2008.; Shieh and Deng, “An Emerging Civil Society,” 194. 65 Shieh and Deng, “An Emerging Civil Society,” 185. 66 Zhai Yan, “ ʻ512ʼ Sichuan dizhen NGO zhenzai diaocha baogao” (Investigative Report on NGO Disaster Relief in the “512” Sichuan Earthquake), Zhiyuande liliang (The Power of Volunteering), No. 4 (2008): 5-9. 67 Shieh and Deng, “An Emerging Civil Society,” 185. 68 Jia Xijin, “Chinese Civil Society After the 512 Earthquake,” Policy Forum Online, 08-056A, July 22, 2008, accessed February, 2 2012, 69 Shieh and Deng, “An Emerging Civil Society,” 181. There are however many social outcomes from the Sichuan earthquakes public engage- ment that will continue to influence the future of giving in China. Many persons gave money (and volunteered) that had not previously. This engagement is one of the keys to continued growth in giving. This is because individuals that are involved in the work of the organization they give to are more likely  to give on a regular basis and increase their giving over time.70 The most important outcome though may  prove to be indications that the social capital of civil soci- ety organizations is growing. Cultural Influences Chinese culture – the beliefs, customs and practices and social behavior of a particular na- tion of people71 – is influenced by  two traditions, major and minor.72 Minor traditions are guided by  sets of rules and personal regulations that influence citizensʼ everyday  existence. Major tradi- tions are influenced by classical works of Chinese history, which are borne of Confucian, Bud- dhist and Taoist thoughts. Of the cultural traditions, social solidarity, participation in society  (and rites), benevolence, and success are the most appropriate customs and practices to discuss within the context of this paper. At the core of any  culture is social solidarity  – which are the social connections that bind so- ciety  together. In Chinese culture, the family  is the fundamental connector. The family  (or clan) is the basic unit of society and therefore the most important to maintain. In particular, is the at- tention given in Chinese culture to limiting personal burden on the rest of the family  unit – and the society  as a whole. For instance, if an individual cannot contribute to the wellbeing of the unit, then the individual blames him, or herself. Requiring any  assistance from society  is per- ceived as inappropriate and is avoided with much effort by the individual and family.73 27 70 Bodo B. Schlegelmilch, Adamantios Diamantopoulos, and Alix Love, "Characteristics Affecting Charita- ble Donations: Empirical Evidence from Britain," Journal of Marketing Practice 3, no. 1 (1997): 14-32. 71 Definition from Encarta World English Dictionary. 72 Yiyuan Li, Linkage between Major Traditions and Minor Traditions, ed. Xing Zhou, Socio-cultural An- thropology Papers (Tianjin: Tianjin People's Press (in Chinese), 1996). 73 Sibin Wang, “The Relationship between Seeking Help and Offering Help in the Chinese Society: Institu- tional and Cultural Perspectives,” in Social Work in China: a Snapshot of Critical Issues and Emerging Ideas: proceedings of the international colloquium in Beijing 2000, ed. Adolf Ka Tat Tsang et al. (Toronto: University of Toronto, 2004), 20. The major traditions of self-sustenance, based on Confucian ethics that emphasize the co- hesion of family  and clan, are also important to note. In Chinese culture, if one member of the unit suffers, the cohesion suffers and possibly  the whole unit will suffer from the inabilities of one member of the unit. Therefore, because all members of the unit are intrinsically  linked, providing for a member of the family, or clan can be seen as a sustaining of oneʼs own self.74 Culture of Business The culture of business in China revolves around the family business.75 Commerce is often conducted with extended family. A single patriarch within the family  often fosters these economic relationships and retains ultimate control of the operations. Yet the lines between purely  eco- nomic and familial are often blurred.76  Sometimes these family  business networks span the globe within the scope of their operations77  and rely  heavily  on the performance and trust of other family members to succeed economically. Paternalism plays a large role in the social order and power structure of business in China. Influenced by  the social and moral obligations of playing the role of ideal Confucian leader, a paternal leader is a “benevolent autocrat who readily  accepts the duty  to undertake responsibil- ity  for his dependents. These dependents may  be his family  and its extensions, and those treated as honorary  members such as long-term employees.”78 As a result, employers and em- ployees often view their business relationship as similar to a family relationship. Another influence is the belief that informal personal relationships and connections (com- monly  referred to as guānxì, 关系) are more important than formal, contractual, or legal ar- rangements. For this reason, it is possible that most of the individual philanthropic giving that 28 74 Ibid., 21. 75 Family businesses provide the major source of income to the family unit. (Panikkos Poutziouris, Yong Wang and Sally Chan, “Chinese entrepreneurship: the development of small family firms in China,” Jour- nal of Small Business and Enterprise Development, 9:4 (2002): 383-399.; and, Panikkos Poutziouris and F. Chittenden, Family Business or Business Families, (Leeds: Institute for Small Business Affairs, 1996).) 76 This also furthers the notion of major traditions of Confucian ethics for family cohesion. 77 Gordon Redding, “Overseas Chinese networks: understanding the enigma,” Long Range Planning 28:1 (1995): 61-69. 78 Poutziouris, Wang and Chan, “Chinese entrepreneurship,” 391.; Redding, “Overseas Chinese net- works.” occurs has a preference towards informal arrangements. This is in direct contrast to the pre- ferred formal arrangements that often occur between western civil society and donors. A Chinese family  business views its responsibly  to their employees differently  than a busi- ness in other cultures. Many of the services that governments provide in other societies - that are provided through garnished wages in the form of taxes - Chinese businesses provide di- rectly  to the employee. Many  of the social welfare and safety net programs such as: subsidized housing, elder care, food assistance and healthcare, are provided by an employer. The ʻgivingʼ  that occurs directly  between and employer and employee is not captured in sta- tistics, or other charitable benchmarks in the PRC. Additionally, much of the giving that occurs is directly given to individuals rather than using a philanthropic organization to disperse benefits. Religion and Philosophy Religion and philosophy  have a heavy  influence on socio-cultural dynamics of all societies. In the PRC, many  religions are practiced, but the four most followed are: Buddhism, Taoism, Christianity  and Islam. In addition to religion, the philosophies of Confucius also have a large effect on the society. To fully  understand the socio-cultural realities of philanthropic giving, an overview of these two influences are important to consider. The teachings of Confucius guide almost all areas of Chinese society  and culture. Govern- ment, education and even etiquette are influenced by  what were at one time the official state philosophies of China. The Confucian ideal virtue of ren (rén, 仁) - benevolence, charity, love and humaneness - is reinforced by both Buddhism and Taoism.79 On the topic of giving, Confu- cius and Mencius both believed that philanthropy  was a distinguishing characteristic of man. When Confucius was asked about philanthropy his answer was, “it is to love all men.”80 These philosophies continue to influence Chinese culture and giving patterns. 29 79 John J. Deeney, “Neglected Minority in a Neglected Field: The Emerging Role of Chinese American Philanthropy in U.S.-China Relations,” in The expanding roles of Chinese Americans in U.S.-China rela- tions : transnational networks and trans-Pacific interactions, ed. Peter H. Koehn et al. (Armonk, N.Y.: M.E. Sharpe, 2002), 165. 80 Yu Yue Tsu, The Spirit of Chinese Philanthropy, 16. Taoists, on the other hand, offer a different opinion of philanthropy. Chuang-Tzu has written on the destructive nature of philanthropy citing it to be “a false outgrowth of human nature and as a disturbing factor in human wellbeing.”81 His reflections come from an imaginary conversa- tion between Laozi (author of the Tao Te Ching) and Confucius on the topic in which Laozi says that philanthropy  and charity  is against natural providence and the moral order.82 However, Tao- ists are also supportive of ren because, “all things, human and natural, are reciprocally related.”83 The practice of philanthropic giving in Buddhism is motivated by  two commonly  practiced precepts. One practice is motivated by the opportunity  to make merit and the second is an op- portunity  to aid a person in need. Both practices are seen as important steps in oneʼs journey  to Nirvana.84 Ren is reinforced by the Buddhist bodhisattva Guanyin (Guānyīn, 音), the compas- sionate Goddess of Mercy.85 Christianity  and Islamʼs influence on giving in the PRC is more difficult to understand. Both religions encourage giving, but with different practices. Tithing is a central tenet of Christianity  in which the believer voluntarily gives one-tenth of oneʼs income to a religious or charity  organiza- tion. Followers of Islam practice zakat, which is the giving of a fixed portion of wealth to assist the poor and needy. In the PRC, Christianity  has influenced and shaped charity  since the nine- teenth century, through missionary  and other supported organizations, which further facilitated the transfer of Christian service traditions.86 Samuel Williams (The Middle Kingdom, 1849) provides some insight into the common prac- tices of individual philanthropic giving and the influence that religion had during that period of 30 81 Ibid., 20. 82 For more insight into this topic see: Chuang Tsu, Mystic, Moralist, Social Reformer, trans. Herbert A. Giles. (London: 1889); or, Yu Yue Tsu, The Spirit of Chinese Philanthropy, 20. 83 Deeney, “Neglected Minority,” 165-166. 84 Asia Pacific Philanthropy Consortium, Investing in Ourselves, 8. 85 Deeney, “Neglected Minority,” 165. 86 Nick Young, “Richesse Oblige, and so does the State: Philanthropy and Equity in China,” in Diaspora philanthropy and equitable development in China and India, ed. Peter F. Geithner et al. (Cambridge, Mas- sachusetts: Global Equity Initiative, Asia Center, Harvard University, distributed by Harvard University Press, 2004), 44-45. time. Williams states that, “good acts are considered proofs of sincerity; the classics teach be- nevolence, and the religious books and tracts of the Buddhists inculcate compassion to the poor and relief of the sick. Private alms of rice or clothes are frequently  given, and householders pay a constant poor tax in donations to the beggars quartered in their neighborhood.”87 Although the influence of religious and philosophical practices cannot be quantified, they  are important to consider when in the broader cultural context. While the traditional influences that religion and philosophy  have on giving have been re- viewed, it is important to note that the status quo of religion, and religious organizations in the PRC are rooted in history. The suspicions that were raised with the Falun Gong era impact the ability  of religious groups to create or support civil society  organizations today. As a result of the tensions between Falun Gong and the government in recent history, the government is con- cerned about the funding that every religious organization receives.88 However, this perspective may  be changing. On Monday, February  27, 2012, the State Ad- ministration for Religious Affairs issued a notice that “actively  encourages and supports religious groups to engage in charity activities.”89 The regulation requires faith-based charities to function as non-profit organizations and guarantee their financial transparency  through regular disclo- sure of expenditures and donors.90 Familial Influences Family, as described above, is the primary  relationship approached for philanthropic pur- poses, but sometimes the needs of an individual surpass what a family, or clan can provide. When this occurs, the individual is inclined to approach other resources for assistance. In Chi- nese culture an individual in need cannot approach just anyone for assistance, an individual can 31 87 Samuel Wells Williams, The Middle Kingdom, vol. 2 (New York: Wiley, 1849), 280. 88 Peter F. Geithner, Paula D. Johnson, and Lincoln C. Chen, Diaspora philanthropy and equitable devel- opment in China and India (Cambridge, Massachusetts: Global Equity Initiative, Asia Center, Harvard University, distributed by Harvard University Press, 2004), xx. 89 “Chinaʼs religious groups encouraged to run charities,” Xinhua, March 28, 2012, accessed March 8, 2012, 90 Li Yao and He Dan, “Charities open to religious groups,” China Daily, March 1, 2012, accessed March 8, 2012, only  - with cultural appropriateness - approach those that the individual has a relationship with that is based on obligation and trust. Obligation in the sense that if asking someone outside of the family unit for assistance, that individual must return the favor in the future. Trust in the sense that when returning the favor in the future, the favor will be adequate and equal to what had been given. Thus, there is much risk in both the asking for, and, the giving of assistance to those that are not trusted associates. Because of the primary role of the family  and clan in Chi- nese culture to address philanthropic needs within the unit, approaching members of society outside of this unit occurs less than in many other cultures.91 Trust Trust is the currency by  which civil society  sustains itself.92  Without trust, donations cease, volunteers stop volunteering, projects fail and civil society  ceases to exist. In the PRC, trust of civil society is in constant flux. Although no studies exist that conclusively  cross-tab trust and giving in the PRC, it does play  a large role in influencing the charitable behavior of individuals. 32 91 Hsin-Huang Michael Hsiao, “Chinese Corporate Philanthropy in East and Southeast Asia: A Typology,” in Evolving Patterns of Asia-Pacific Philanthropy, ed. Ku-Hyun Jung (Seoul, Korea: Institute of East and West Studies, Yonsei University, 1994), 86. 92 Fran Tonkiss, Andrew Passey, and Natalie Fenton, Trust and Civil Society (Houndmills, Basingstoke, Hampshire: Macmillan Press, 2000), 143. Table 1: Trust in institutions in the PRC Source: Asian Barometer Survey, Department of Political Science, National Taiwan University (Taiwan: 2008), by permission. None at all Not Very Much Trust Quite a Lot of Trust A Great Deal of Trust National Government 0.3% 5.0% 25.4% 69.3% Local Government 3.8% 38.1% 38.8% 19.3% The Courts 1.9% 21.3% 39.4% 37.4% The Police 2.1% 25.4% 36.4% 36.0% NGOʼs 10.9% 60.4% 19.2% 9.5% Newspaper 2.8% 47.4% 32.8% 17.0% One indicator that may  be used is a poll conducted by National Taiwan University  called the Asian Barometer Survey (ABS).93 The ABS has conducted two surveys in the PRC (in 2003 and 2008) that have asked respondents to rate their trust in different institutions in the PRC. The re- sults from 2008 are included in Table 1. Of the institutions that respondents rated, over 69% in- dicated “a great deal of trust” in the national government which is the highest of all institutions. The lowest response in this category  is NGOʼs with just 9.5 percent of respondents indicating “a great deal of trust.” The institution that respondents have “not very  much trust” in are the NGOʼs, with 60%. The figures from 2008 only  offer a part of the story  however. When responses from 2008 are compared to a similar survey  conducted in 2002 the overall situation is worse. Trust in NGOʼs is decreasing over time. Figure 4 shows the overall decrease of trust in NGOʼs between 2002 and 2008. The number of respondents that indicate “not very  much trust” increased and the re- 33 93 Asian Barometer Survey (ABS), Department of Political Science, National Taiwan University (Taiwan: 2003 and 2008). None at all Not Very Much Trust Quite a Lot of Trust A Great Deal of Trust Do not understand the question Can not choose Decline to answer 0% 12.5% 25.0% 37.5% 50.0% 2002 2008 Figure 4: Trust in NGOʼs between 2002-2008 Source: Asian Barometer Survey, Department of Political Science, National Taiwan University (Taiwan: 2003 and 2008), by permission. sponse of “quite a lot of trust” decreased. However, the percentage or individuals that indicated “a great deal of trust” increased over time.94 To bring life to these statistics and connect trust in NGOʼs to individual giving is a Chinese businessmanʼs thoughts on trust of civil society, saying “he could not trust Chinaʼs charity  or- ganizations.” He has “helped more than twenty college student[s] with their education by  giving money  to them directly.” His reason for giving directly to students rather than trusting charity  or- ganizations to do it for him, was that he wanted to “know  exactly  how every  penny  [he] donate[s] is used, yet most charity organizations donʼt give detailed explanations.”95 Another perspective is offered by  a Sociology  professor at Shandong University  named Wang Zhongwu who believes that “most Chinese do not want to admit how rich they  are for fear of being blackmailed by  illegal charity  groups to donate.”96 Not only  do individuals not trust civil society to administer their donations properly but they also fear being solicited for donations. The 2008 China Report Charitable Contributions (2008年度中国慈善捐助告) published by the Ministry of Social Welfare explains this mistrust even further. After the Earthquake of 2008, the Ministry conducted a survey  in Beijing about public perceptions of charitable organizations. The results were concerning. Of those that responded to the survey, “more than 50% of respon- dents worried about money  being misappropriated, or [lost due to] corruption.”97  When more than 50%  of citizens are concerned that the donations they  make to civil society  organizations will either be misappropriated, or lost to corruption, it is likely  that mistrust and negative public perception is one of the larger obstacles to individual giving. These three examples illustrate that mistrust of civil society  organizations is well established in the PRC. For individual philanthropic giving to increase, trust will have to be developed. For trust to be developed, transparency and accountability need to be addressed. 34 94 For further information about trust in NGOʼs by education level and religious affiliation, see: “Table 4: Trust in NGOʼs by education level (2008)” and “Table 5: Trust in NGOʼs by Religion (2008)” in the Appen- dix. 95 Cheng Yunjie and Zheng Qian, “New charity law to bring sector into line in south China,” Xinhua, Sep- tember 4, 2010, 1. 96 Ibid., 2. 97 Chinese quote: “但是50%以上受!担心善款被挪用或腐%”. Extreme Wealth Much of the focus and attention on giving in the PRC surrounds the extremely  wealthy. Many have heard about the dinner held in Beijing that Bill Gates and Warren Buffet coordinated in late 2010 to encourage giving. Just as in other parts of the world, the larger the donation, the more attention it is given in the media. This paper attempts to focus however – not on the attention-grabbing donations of millionaires and billionaires – but on the smaller contributions made by  individuals that go largely unreported that play  a very  significant role in total giving. This paper is principally  about understanding the giving of those other than the extremely wealthy of the PRC. However, for a complete contextual understanding of giving in the PRC, a brief overview of the individual philanthropic giving of the very  wealthy  is appropriate. The PRC is a country  of extreme wealth and extreme poverty. Often, the first contributors to philanthropic initiatives are those with the largest disposable income – which tend to be the rich. In China, there are many who are rich. In 2010, Chinese news sources reported that there are 477,000 USD millionaires in the PRC. Of that number, 1,363 Chinese individuals had wealth of at least $150M USD and of those, 189 Chinese individuals had a wealth of at least one billion USD.98 Although it is not possible to equate this wealth with actual giving, there is a resource that provides an insight into the giving behavior of some wealthy  individuals. Published annually  for the past seven years, the Hurun Philanthropy List99 ranks the top 100 most generous Chinese individuals. The list identifies the individuals and attempts to provide the motives behind the do- nations by  publishing the sectors that the giving is directed towards and the company  that the individual is affiliated with. Their statistics include “cash and cash equivalents pledged with le- gally  binding commitments” and “donations made through companies owned 50% or more” by the individual. The total giving for the 100 individuals listed over the past 5 years is 3.6 billion USD.100 This is a rather large sum, but not so large when considering that over the past 5 years, 35 98 “Hurun Rich List 2010,” accessed February 2, 2012, 99 “2010 Hurun Philanthropy List,” accessed December 9, 2011, 100 These calculations were made by the author using currency exchange rates on December 9, 2011. Please see the “2010 Hurun Charity List” for a complete list of names, sectors and companies, found here: ( (accessed February 2, 2012). 39.5 billion USD has been donated. Therefore, although the large donations and donors receive the most media attention, the donors that do not make the top-100 list represent the majority  of giving in the PRC. The larger, less-recognized and acknowledged portion, is the focus of this paper. Diaspora Giving Perhaps one of the best ways to understand the socio-cultural factors that influence individ- ual philanthropic giving in the PRC is to look outside of it borders. Diaspora philanthropy - the “giving back” to an individualʼs country  of origin - provides an opportunity  to parse socio-cultural factors from other factors that influence giving. Conclusions could be drawn from a comparison between the giving patterns of Chinese residing within the PRC to the giving patterns of those that live outside the PRC borders. Diaspora philanthropy is a large and growing part of global philanthropy  resource transfers as diaspora communities increase in size and create wealth. The transfer of resources have a large influence on the receiving communities and organizations that these resources support and have generated much academic and political interest.101 Advancements in communications and banking technology  have further facilitated the connections between the diaspora and the receiving communities. All of these factors combine for a rapid escalation in the transfer of re- sources in the last few decades.102 However, much of the flow of resources are informal transfers that take the form of remit- tances to family  and relatives in the homeland; and because of this, information on the amount, purpose, and geographic destination is scarce.103 Donations to civil society  organizations do occur, but again, information is not readily available.104 36 101 The government entity that is statutorily mandated to oversee and assist these transfers is the De- partments of Overseas Chinese Affairs. 102 Geithner, Johnson, and Chen, Diaspora philanthropy, xiii. 103 Ibid., xvi. 104 There are a few academic books that thoroughly evaluate diaspora philanthropy that are important to review if further inquiry is required. See the Bibliography for a full listing of academic articles on diaspora giving. International Donors International organizations are also financial contributors to philanthropic efforts. From US- based foundations between the years 2002-2009 alone, 2583 grants were made to 658 distinct grantees. The total value of this giving was $442,925,349 USD. But, the majority  of US-based grantmakers support government-controlled groups such as academic institutions (the largest recipients are: Chinese Academy  of Agricultural Sciences, Tsinghua University, Beijing Univer- sity, Chinese Academy  of Social Sciences and Beijing Normal University) government agencies (Ministry  of Health and Education), and GONGOʼs (Chinese Preventative Medicine Association and Chinese Association of STD & AIDS Prevention & Control). By  total value, between the years 2002-2009, 86.01% of the US-based grants went to government ministries, education in- stitutions, and GONGOʼs.105 When considering this international giving to the total official giving that occurred over the same period of time, this represents only a fraction of donations.106 Technology The power of technology  and social media to disperse information and petition individual philanthropic giving can not be understated. The Sichuan earthquake is a prime example of the power technology  has to convey  messages and images and ultimately  influence giving. During the days that followed the earthquake, images of the disaster relief efforts were everywhere. Within the PRC, if a person was watching television, reading newspapers, listening to the radio, or surfing the internet, an individual would be hard pressed to escape the appeals for money and resources. Technology  is likely  to increase participation with the activities of the philanthropic sector as well as increase financial support. Financial support for Sichuan was raised with simple phone text messages - these technological resources will likely continue to increase participation. Sites like Weibo (an internet platform in the PRC  similar to Twitter) multiply  the potential audience for donation requests and disseminate information about organization activities. 37 105 Anthony J. Spires, “Organizational Homophily in International Grantmaking: US-Based Foundations and their Grantees in China,” Journal of Civil Society, 7:3, (2011): 317. 106 Between 2005 and 2009, Total donations were 184.2 billion remimbi ($29.1 billion USD). See Table 2. With advances in technology, it is easier for individuals and organizations to solicit dona- tions. In a recent article in China Daily, the story  highlighted the outpouring of support for a boy from a family  too poor to pay  for medical treatments. The netizen response to this boyʼs medical needs was $68,750 USD in donations.107  Another example is of an organization that sent an appeal on Weibo using images of children in ragged clothes with to plea for clothing. The mes- sage was forwarded 120,000 times and over 700 packs of clothing were received by the organization.108 Another effect of technology  on giving that is particularly  unique to the PRC is the backlash by  the netizen community  against individuals - mostly  rich and famous - that pledge money to charities, but do not follow  through on their commitments. In recent years, there have been nu- merous instances where individuals have allegedly  pledged donations and not fulfilled their commitment. Zhang Ziyi, a famous film star109, was accused of discrepancies between the 1 mil- lion yuan ($147,000 USD) she pledged to the China Red Cross shortly after the Sichuan earth- quake and the amount she actually gave, 840,000 yuan ($123,000 USD). The “scandal” filled the media as Zhang worked to clear her name.110 This type of backlash is much less common in the West. 38 107 Netizens donated more than 440,000 yuan or $68,750 USD. Shi Jing, “Weibo proves effective at pro- moting charity,” China Daily, November 28, 2011, 22, accessed January 10, 2012, 108 Ibid., 22. 109 Zhang Ziyi is known for her roles in “Crouching Tiger, Hidden Dragon,” “House of Flying Daggers” and “Memoirs of a Geisha.” 110 See: Raymond Zhou, “Actress denies charity fraud,” China Daily, March 16, 2010,; and, Raymond Zhou, “Clearing her name,” China Daily, March 16, 2010, (both accessed January 12, 2012). Political Giving in the PRC is heavily  regulated and controlled by  the government.111 To understand why  the government regulates and controls giving, a brief discussion on how the government views the civil society  more generally, is necessary. To complete this, an understanding of the PRCʼs views on the role of governance is required. Differing from the liberal paradigms of western thought – where citizens have a right to share in their own governance through democratic means - the PRC governs in a more patrimonial way. Although, Article 2 of the Constitution of the People's Republic of China designates that “all power in the People's Republic of China belongs to the people” this does not indicate that the Chinese government is held accountable for its actions, or seeks guidance from the people in the dealings of the government. The PRC is guided by  a patrimonial relationship with its citi- zens, one that views its responsibility  as providing for the wellbeing of the people, but not re- sponsible to the people. Because of these underlying norms, the Chinese government is suspicious of any  increased influence of any  non-state entities that may vociferate for increased government accountability. The growth of philanthropic giving in the West has resulted in the growth of civil society. This in turn has resulted in, among other things, an increased public awareness about economic, politi- cal and environmental issues. Due to these realities in other areas of the world, the growth of civil society is likely perceived as a threat to the PRCʼs form of governance. However, in slight contradiction to the concerns above, the Chinese government has also begun decreasing the reliance of its citizens on the State - the so called welfare state model - a remnant of the original communist manifesto that guided the development of social programs since the formation of the Peopleʼs Republic of China. The likely  partner in this transfer of reli- ance away from the government is civil society, or some other type of non-state entity.112 Finan- cial support from government coffers to support the social programs that the PRC has tradition- 39 111 This is supported by the widely accepted view that civil society in the PRC is “state-led civil society” as argued in B. Michael Frolics chapter of the same name in Brook and Frolic, Civil Society in China. This point is supported further by Yu Kepingʼs views of government-led civil society in Yao Yingʼs, “Chronicle of political reform foretold,” China Daily, October 23, 2009, accessed January 17, 2012, 112 See “12th 5-year Plan” section for more information on this topic. ally  provided is likely to continue, but the charitable work would largely  be conducted by civil so- ciety. The sector would be relied upon to address the short-term needs of the citizens in times of need, such as environmental disasters as well as long-term needs such as employment serv- ices, poverty eradication, and education related services. In so doing, the PRC government would reduce the reliance of the people on the government while also addressing the needs of the citizens. These two interests are at odds with each other. The PRC desires a decreased reliance on the government for a variety  of needs that it has traditionally  provided its citizens on the one hand, but also fears the expansion of a sector that will raise awareness about social-cultural is- sues that may  threaten its power and legitimacy on the other. A cautious and calculated step forward is a likely outcome of these competing interests. However, if the PRC pursues a path of greater civil society development and perceives that the sector has overreached its statutory  mandate, it has two levers to control the sectorʼs activi- ties. The first is in the form of direct government control of sector activities and organizations by the Ministry  of Civil Affairs. This Ministry  carries out most of the tasks related to civil society  such as: formulating social assistance programs, creating policies and standards; overseeing social organizations, foundations, and private non-enterprise units; developing social welfare planning, policies and standards; as well as promoting and overseeing charity  organizations and charita- ble contributions.113  If the PRC decides to curtail the growth of the sector, it need only revoke the registration of an existing civil society organization and crack-down on their activities. The second lever is financial. This could occur through actions by  the PRC to eliminate the incentives for charitable giving such as tax deductions for businesses and individuals. Without a revenue stream, civil society could cease to exist. This section describes some of the issues that influence giving in the PRC. Although these topics are not purely  “political,” they  are issues that are in some way related to the political ide- ologies or strategies of the PRC government. 40 113 Ministry of Civil Affairs website: (accessed February 2, 2012). 12th 5-year Plan Every  five years the PRC develops a plan for the overall development of the country. It of- fers a perspective on the most pressing issues that the government would like to focus on over the next five years. The document is a good first point of reference on any  issue of interest in the PRC. Chapter 39 of the 12th 5-year plan114 discusses the strengthening and construction of social organizations. The chapter outlines the need to establish a management system and to prioritize the development of charity  and community  social organizations. The statement that is of most interest is in the first paragraph, where it states: “improve the supporting policies, pro- mote the government to transfer functions to social organizations, [and] open more public re- sources and fields”.115  By  transferring functions away from the government and providing the resources to social organizations,116 this document furthers the policy shift away from the wel- fare state model employed since the cultural revolution. However, the chapter ends with a statement that clearly  indicates that the PRC wants the social organizations to develop and strengthen but at the same time wants to keep a watchful eye on their growth by  “strengthen[ing] the supervision and management of social organiza- tion[s].” Non-Profit Incubators In some instances local government is showing more innovation and is ahead of the national government on many issues connected to philanthropic giving. One of the best examples of this are the four designated Non-Profit Incubators (NPI). Since 2007, NPI117 have been cultivating and supporting startups and small to medium sized NGOʼs.118 Through their work these incuba- tors have recognized the “growing enthusiasm towards charity  among the general public” and 41 114 The 12th 5-year plan is to be implemented from 2011- 2015. 115 English translation provided by the Delegation of the European Union in China. 116 “Social organizations” does not equal “civil society.” In the PRC, “social organizations” includes quasi- government organizations such as the All-China Federation of Trade Unions, Youth Federation, and Fed- eration of Industry and Commerce that are closely aligned with the government. But, the usage of this term does not exclude civil society either. 117 The Shanghai NPI began operating in 2007, Beijing and Chengdu in 2008, and Shenzhen in 2010. 118 “NPI Overview,” that “it is still quite difficult for resources to reach innovative grassroots NGOʼs” because of the existing “legal limitations on tax exemption and fund-raising qualifications.”119  In response to these two realities, NPI have created a public charity  foundation that is supported by the Shanghai Civil Affairs Bureau. This fund-raising platform is called the Shanghai United Founda- tion and acts as a granting and monitoring organization for entities associated with NPI. This initiative is an encouraging step made by local government ahead of the national gov- ernment to address both the administrative and financial needs of philanthropic organizations. However, this initiative is quite small and represents only  a handful of organizations.120 Addition- ally, the question should be asked: why add a layer of bureaucracy to donation collection by creating the Shanghai United Foundation in the first place? This is likely  due to the “monitoring” aspect of Shanghai United Foundationʼs role as a public foundation with close links to the gov- ernment. Taxes However mundane taxes tend to be perceived in modern societies - they  are not mundane. Taxes are regularly  the most politically  debated issues that also have some of the largest eco- nomic influence on society. Taxation has two general perspectives by  which it functions. The first being taxation as a means of generating revenue for the state and the second being taxation conducted by  the state as a means of regulating behavior. An example of the former is a value added tax (VAT) or simplified taxes, the latter would be most of the remaining forms of taxes lev- ied by  governments worldwide. The latter is also the form of taxes used by the PRC for both in- dividual and corporate taxation. It is important to make a distinction between the two types of taxes, because when govern- ments levy  taxes for more than the purpose of generating revenue, political ideology  is involved. As is the case in most countries in the West, the PRC uses taxes to encourage or discourage behavior - alternatively  known as behavior modification. Within this framework of understanding it may  be concluded that corporate or individual taxation laws that offer incentives for giving to 42 119 “NPI Fund-raising Platform,” 120 Shenzhen has 6 NPOʼs in its incubator project and provides service to 4 other organizations; Chengdu has incubated 8 NPOs; Beijing has 9 NPOʼs; and, Shanghai is unknown. the philanthropic sector - whether monetary  or otherwise - is a form of behavior modification by governments through incentives for certain behaviors.121  Most governments utilize behavior modification - particularly with respect to their tax policy. The benefits to encourage, or discourage behavior through tax incentives are many. States use this to their advantage by utilizing a universal pursuit - the perpetual desire to decrease their tax burden. “But in the world nothing can be said to be certain except death and taxes."122 These are not encouraging words but rather the reality  of current society. However futile it is to try  to reduce oneʼs tax burden, citizens are always eager to attempt such behavior; and, States use it to their advantage. States are able to encourage and discourage the behavior of its citi- zens deemed important and necessary  for State growth in the short and long term. In some so- cieties, tax incentives are offered to companies that develop new technologies through research and development - which benefits the State by  encouraging the creation of new industries and economic growth. The tax incentives offered to individuals and companies, in the form of tax deductions to encourage philanthropic giving, are of particular interest to this paper. The stat- utes and regulations that influence behavior related to tax are reviewed in Chapter 2. Media Coverage of social needs within the PRC and appeals to assist those in need have a large influence on giving in the PRC. As was the case with the Sichuan earthquake, when the cover- age and appeals began, the money started rolling in. To understand the influences that the media has on giving, a brief review of the role that media has played in encouraging or discouraging giving in China is appropriate. The historic levels of charitable donations that occurred in response to the Sichuan earthquake is an exam- ple of how, when a situation necessitates action, the government controlled media is employed to increase public awareness. Anyone present in China after the disaster, would have witnessed countless news stories and appeals to the populace for support of the people of Sichuan. But 43 121 Jon Bakija and Bradley T. Heim, “How does charitable giving respond to incentives and income? new estimates from panel data,” National Tax Journal, 64, (June 2011): 628-632, and 647. 122 Benjamin Franklin, “Letter to Jean-Baptiste Leroy,” November 13, 1789. what was the motivation behind the appeals? Surely  the largest motivating factor was of care for those impacted by the disaster, but another motivating factor is likely less altruistic - nationalism. A brief overview of domestic and international media reports concerning China will inadver- tently  result in the discovery of numerous instances of civil unrest. Corruption, unemployment, land disputes, health concerns, and working conditions are common reasons for civil unrest. The issue that best distracts the Chinese people away from these concerns is the use of nation- alism. Few concerns can bring citizens together like national pride. Nationalism is a currency that is often fostered and used by  governments to instill a cohesive bond between citizens and to redirect public attention. In the case of the Sichuan earthquake, as information about the disaster turned from the ini- tial reports about the incident to questioning the reasons for such large numbers of deaths in public buildings, the public discourse changed quickly  to public outcry  against what was seen as poor construction of public buildings due to public official corruption. This groundswell of nega- tive public discourse was abruptly  redirected. Nationalism was used as an issue to divert the negative public attention away  from corruption and anger at the PRC. The media apparatus be- gan using messages that focused on patriotic efforts made by the volunteers at the disaster site and encouraged financial donations to organizations that were helping the people affected by the natural disaster. One result of the increased focus on the patriotic efforts made by  volun- teers was historic levels of donations given towards the relief effort. Social Welfare and Insurance Chinese society, as is the case in many  developing countries, lacks fully  developed social welfare programs - sometimes called socioeconomic safety nets - to assist the poor and vulner- able in times of need. Services such as subsidized housing, elder care, food assistance and healthcare are available in China, but access to the resources is limited and varies between regions.123 Due to the lack of access to these social safety  net programs, Chinese families must often respond to the needs of the members of their own family. 44 123 Social Security Administration, Social Security Programs Throughout the World: Asia and the Pacific 2010, accessed January 17, 2012, Social insurance programs such as pensions, healthcare, unemployment insurance, and other such services that provide benefits to Chinese citizens do exist, but are largely under-utilized.124  At present, most social insurance programs are provided by  the businesses that employ  the worker instead of the State. This worker benefits in this model because he/she externalizes some of the risks of saving for retirement by pooling resources but, this is poten- tially  harmful due to the possibility  that the business will not make good on their promises for future support. The Chinese government does not have programs that ensure the financial se- curity  of pension funds like many  advanced economies have in order to support pensioners when their funds cease to provide income to those that rely  on it. A national pension system does exist, but it does not cover all citizens at this time.125 Due to these realities, Chinese fami- lies save a great portion of their annual income for their retirement. These realities offer an op- portunity  for civil society  to address these societal needs - as is happening in some areas of the country  - but also create a limiting factor for giving because families must rely  on their own re- sources for future emergency and long-term financial requirements. Individual Saving Personal savings rates in China are some of the highest in the world. Varying reports put the figure somewhere around 30%126 of the annual income that is saved for future use.  This figure indicates that individuals have a larger pool of resources to draw  from to give to charity if they choose to. However, having the resources doesnʼt translate to increased giving. Having the abil- ity  to give and actually  giving, are two very different matters and rely  heavily  upon the social and economic situation of the individual. In the PRC, most of this money is saved for speculative fu- ture medical expenses and retirement127 and as a contingency fund. 45 124 For a full listing of Social Insurance and Security programs in the PRC, the U. S. Social Security Ad- ministration provides an annual review of programs, here: (accessed January 17, 2012). 125 A breakdown of the benefits included in the recently implemented Social Insurance Law are provided here: (accessed January 17, 2012). 126 McKinsey&Company, 2010 Annual Chinese Consumer Study (Shanghai: McKinsey&Company, 2010). 127 Louis Kuijs, Investment and Saving in China, World Bank Policy Research Working Paper 3633 (Bei- jing: World Bank, June 2005),15. With the unknown risk of health and retirement being a future financial burden, the con- straints on the annual budget of a Chinese family  to contribute to philanthropic activities are sig- nificant. It may be that because of these, and other unknown future expenses, annual saving is high and individual charitable giving is meager. The 2010 World Giving Index report indicates that only 11% of Chinese respondents have given money to an organization. However, when contrasting this figure with the giving levels in other countries in Asia that also lack developed social welfare and insurance programs, a different perspective is offered. Sixty-four percent of respondents from Lao Peopleʼs Democratic Republic give money, 73%  in Thailand, 27%  in Korea; and 33% in Mongolia.128 From these comparisons it can be argued that the absence of social welfare and insurance programs are not the sole reason for decreased giving in the PRC. Volunteerism As the State continues to move away  from providing support directly  to the citizens it will in- creasingly  rely  upon the services of philanthropic organizations to provide services to individuals ,and those organizations will increasingly rely upon the assistance of volunteers. Although just 4% of Chinese respondents to The World Giving Index survey  said they  ̒volun- teered their time,ʼ it is on the rise in the country. The Office of the China Youth Research Society offers this insight into volunteering, “since the birth of China's reform ... the whole of society has gradually  [been] involved in the formation of volunteer service.”129 As citizens begin volunteering and giving of their time they will also likely increase their financial giving. 46 128 Charities Aid Foundation (CAF), World Giving Index 2010 (United Kingdom: CAF, 2010), 20. 129 Office of the China Youth Research Society, China's comparative analysis of volunteer service system (China: Office of the China Youth Research Society, 2010), (中国改革开放以来"生的志愿事,也	了 从活到体系的)*程,全社会参与志愿服的潮逐形成。). Chapter 2: Regulatory Framework The regulatory  framework is the basic structure underlying the opportunities that individuals and businesses have for donating resources. It defines the ways in which civil society  organiza- tions can solicit resources and operate in the PRC. The regulatory  framework defines how much individuals can give, to whom and for what reasons. Recent changes to the regulatory  frame- work have generally  been positive and this is integrally  related to the vast increase in donations over the past decade - particularly in the years following the Sichuan earthquake.130 The following sections provide an overview of the statutes and implementing regulations that influence giving. Tax laws for both individuals and enterprises are reviewed as well as new de- velopments in the areas of transparency  and reporting requirements that may have a large con- sequences on the future of individual philanthropic giving in the PRC. Public Welfare Donations Law The Public Welfare Donations Law (Gōngyì shìyè juānzèng fǎ, 公益事捐(法) forms the foundation for the governments regulatory  framework and defines the purpose, management and responsibilities of all issues associated with donations. More than just a legal framework, it communicates the principles and motivations supporting the law. Chapter1, Article 1 offers this: • These regulations are drawn up in order to encourage donations; standardize the behavior of donors and recipients [shou zeng]; protect the legal rights of donors, recipients and beneficiaries; and promote the development of public welfare undertakings.131 47 130 Ming, Emerging Civil Society in China, 165. 131 Chinese quote: 第一条 了鼓励捐(,范捐(和受(行,保捐(人、受(人和受益人的合法权 益,促+公益事的 展,制定本法。 userobject7ai1270.html (accessed January 23, 2012). The Law  goes on to define public welfare undertakings as disaster relief, poverty  alleviation, and other undertakings that promote social development and progress.132 It stipulates the ap- propriate use and management of donations.133 Transparency and reporting requirements are addressed in three Articles of the Law. Article 20 requires recipient organizations to submit annual reports to the government about the "use, management, and supervision of donations." Article 21 goes on to state that if the donor asks about the use and management of donated assets, the recipient should respond truthfully. Arti- cle 22 requires recipients to "make public the conditions, use and management of donations and must accept the supervision of society."134 To encourage donations, the Law specifies that corporations, enterprises, individuals and private small business will enjoy  tax benefits - but does not define the amount or the regulations on how to access those benefits.135 It only  states that if donations are made under the stipula- tions of this Law, that the entities will “enjoy  tax benefits.” These benefits are defined in the re- spective tax laws. Individual Income Tax Law The most direct link between individual giving and tax law are the incentives offered to indi- viduals for charitable giving in the form of tax deductions. The Individual Income Tax Law (Gèrén suǒdéshuì fǎ, 个人所得税法) allows individuals to deduct as much as thirty  percent of their tax- able income for these purposes. Article 6 states that “donations to education and other public welfare undertakings shall be deducted from the taxable income in accordance with the stipula- tions of the State Council.”136 As with any statute, interpretation (if offered) is important to en- sure appropriate application of the law. The ʻRegulations for the Implementation of the Individual Income Tax Law of the People's Republic of Chinaʼ offer this insight: 48 132 Public Welfare Donations Law art. 3. 133 Public Welfare Donations Law art. 4-23. 134 Translation provided by China Development Brief and located at: (accessed January 24, 2012). 135 Public Welfare Donations Law art. 24 & 25. 136 Individual Income Tax Law art. 6, sec. 6. • Donations to education and other public welfare undertakings mentioned in … Article 6 of the Tax Law refer to donations made by individuals via social or- ganizations and government institutions to educational and other social welfare undertakings and to regions hit by  natural calamities, or poverty-stricken re- gions. • The donation by a taxpayer not exceeding 30% of the taxable income of which a taxpayer has filed tax returns may be deducted from the taxable amount.137 The PRC allows for as much as 30% of an individuals taxable income to be deducted from their taxable amount. (By comparison, the United States allows for a deduction of up to 50% of an individuals taxable amount138). The Individual Income Tax Law both incentivizes and creates the opportunity for individuals give to civil society and education organizations. Enterprise Income Tax Law As previously  discussed, the separation between individual and business activities are diffi- cult to distinguish in the PRC. For this reason a brief depiction of enterprise taxation is appropri- ate to discuss. Let us now consider the incentives through which the PRC influences the philan- thropic giving of enterprises. The first is The Enterprise Income Tax Law (Qǐyè suǒdéshuì fǎ, 企所得税法)139 which al- lows enterprises to deduct a portion of their taxable income for charitable donations. More accu- rately, Article 9 states that the “portion of expenditures incurred in the form of charitable dona- tions by  an Enterprise that falls within 12% of its total profit for the year may be deducted when calculating taxable income.”140 Previous to being updated on January 1st, 2008, this tax law only  allowed for a 3% deduc- tion. It can be concluded that the four-fold increase in 2008 was a political decision intended to 49 137 Regulations for the Implementation of the Individual Income Tax Law of the People's Republic of China art. 24. 138 In some limited instances, US Law only allows for the deduction of 20-30%. 139 企所得税法 found at: (accessed January 19, 2012). 140 Enterprise Income Tax Law art. 9. increase giving by  enterprises to further support the efforts of the State to remove itself from financially  supporting philanthropic efforts. The changes made to the law were fortuitously  timed before the May 12, 2008 Sichuan earthquake that resulted in historic levels of contributions to- wards the relief efforts in response to the disaster.141 A more complete understanding of the changes made in 2008 are provided by  the ʻImple- menting Regulations for the PRC  Enterprise Income Tax Law.ʼ The Implementing Regulations - which often accompany  new laws in the PRC - provide a more comprehensive understanding of how the text of the law is to be interpreted. For example, the use of “charitable donations” - which some un-official sources translate as “public welfare donations” - in the text need clear explanations for application of the law. Article 51 of the Implementing Regulations defines a “charitable donation” as a “donation made by  an enterprise through a public welfare social organization or a peopleʼs government or department thereof at the county  level or above and used for a public welfare undertaking.” Similar to the Individual Income Tax Law, an enterprise can receive as much as a 12% tax de- duction for any donation made to a social organization or the PRC government as long as the organization that is given the donation is used for a public welfare undertaking. The Implementing Regulations go on to define a “public welfare social organization” as a foundation, charitable organization, or other such social organization that satisfies the following conditions: I. it has been registered in accordance to the law and has legal personality; II. its purpose is to develop public welfare undertakings on a non-profit basis; III. all of its assets and the increase in value thereof belong to the legal person; IV. its returns and operational balance are mainly used for undertakings that are consis- tent with the objective for which the legal person was established; V. after its termination, the remaining property will not vest in any individual or for-profit organization; VI. it does not engage in any business unrelated to the objective for which it was estab- lished; VII. it has sound financial accounting systems; 50 141 China Report Charitable Contributions in 2008 (2008年度中国慈善捐助告) (China: Ministry of Social Welfare and Charity Promotion Division, 2008), found at: (accessed March 15, 2012). VIII. donors do not in any way participate in the distribution of the social organizationʼs property; and IX. other conditions as specified by the State Councilʼs departments in charge of finance and tax together with the State Councilʼs civil affairs department and other such regis- tration departments.142 Although these conditions seem to stifle philanthropic giving by  necessitating requirements of both the donor and donee, the list of conditions actually  encourages greater transparency  and accountability. These Regulations should help  instill trust in the civil society  sector which it cur- rently lacks. Insight into the political ideology  that influenced the changes made to the Enterprise Income Tax Law are provided by  the Minister of Financeʼs speech delivered to the Tenth Peopleʼs Con- gress before enactment. His speech outlined the rationale for technical changes as well as the expected changes in enterprise behavior that would be brought about by  the new Enterprise Income Tax Law. The Minister of Finance (MoF) stated that “encouragement of ... environmental protection and energy  conservation, … promotion of public welfare, support to disadvantaged groups, and special tax reduction and exemption for relief of natural disasters”143 were integral parts of the overall changes made to the Law. This is further proof that the behavior modification of enterprises in the PRC and increased support for the activities of philanthropic organizations through increased donations and revenue were intricately involved in the creation of this law. Interpretation of Tax and Donation Laws For these tax and donation laws to influence giving, individuals and enterprises would have to know about the benefits of the law, how to claim a deduction, know which organizations qual- ify  for the statute and regulations for implementation, and presumes that individuals and enter- prises pay  taxes. If an individual or enterprise is aware of these issues, the incentives to give, as defined by  these laws, are further reduced by  bureaucratic institutional obstacles. To receive a tax deduction, the organization that the individual or enterprise has donated to must have ob- 51 142 Implementing Regulations for the PRC Enterprise Income Tax Law. (Translation provided by China Law Practice, Euromoney Institutional Investor PLC, 2008), 6. 143 Jin Renqing (Minister of Finance), explanation on the Draft Enterprise Income Tax Law of The People's Republic of China (Delivered at the Fifth Session of the Tenth National People's Congress on March 8, 2007). tained approval from the MoF and the State Administration for Taxation.144 These information and bureaucratic obstacles have the potential to turn an incentive to giving into an impediment to giving. An example of how difficult it is for an individual to receive a tax deduction is provided by  the experience of an MCA senior official that received a 500 yuan ($79 USD) deduction after two months of persistence and ten administrative steps.145 To fully  assess the effects of these laws it is important to know  how many  individuals and enterprises claim a deduction on their taxes. Such numbers are not currently  available but would provide a more complete picture about how widely  this tax policy  influences charitable giving. Without this information - it is hard to determine how influential these laws are, and whether or not they are behavior modifiers. 52 144 See: “Notice of the Ministry of Finance and the State Administration of Taxation on the Policies and Relevant Management Issues concerning the Pre-tax Deduction of Public Welfare Relief Donations,” (accessed January 26, 2012). 145 Ming Gao and Yanxin Jiang, “China Charity Conference Solves the Problem of Dominant Official Channels and Weak Informal Channels,” The Beijing News, November 24, 2005, A24. Chapter 3: Further Evidence Transparency Survey In 2010, the China Charity and Donation Information Center (CCDIC) conducted a survey  of organizational transparency practices and individual perceptions of civil society  transparency. For organizations, the results of the survey were collated to form a transparency  index that rated the five categories146 of organizations surveyed. Based on information voluntarily  given by  the organizations surveyed, such as: financial and management information practices and availabil- ity  (as well as thirty-seven other indicators); ʻfoundationsʼ were found to be the most transparent, followed by  ̒social groupsʼ (which include RCSC and China Charity  Federation), and then ʻinter- national organizationsʼ.147 However, this index does not mean that organizations are transpar- ent. It just compares the practices of one organization against the practices of another. And, what the organizations said in the survey  doesnʼt always match reality either. The survey found that of the 99 organizations surveyed, 1/5 of the organizations did not have a website, and 43% of organizationsʼ information was either outdated, or difficult to find. To understand more about the publicʼs perception of how transparent organizations are, the survey  report includes three important figures from the individual respondents. The first repre- sents the responses to how satisfied the public is with civil societyʼs disclosure of information. Figure 5, indicates that 91% of respondents are not satisfied with the current transparency  of civil society. Second, of those surveyed, more than half had donated resources, and of those, 90% had never received feedback from the organization that they  gave to.148 Third, individuals indicated in the survey  that they  want to know more about civil societyʼs business activity  (79% of respondents), financial information (73%), basic information (44%), and, internal manage- 53 146 The organizations types are: foundation (基金会); private non-enterprise units (民非企位); social groups (社会体); international organizations (国,); and, other organizations (其他). CCDIC, 2010 China Transparency Report (2010年度中国慈善透明告) (Beijing: CCDIC, 2010). 147 Foundations, were rated 2.85 on the index; social groups, 2.66; international organizations, 2.48; pri- vate non-enterprise units, 2.22; and other, 1.84. Ibid., 14. 148 Ibid., 21. ment information (36%).149  These findings reiterate the point that people are giving, but are unsatisfied with the transparency of the organizations they  give to. Civil society  is not providing information about the use of the funds they  receive and if they  do have this information, it is ei- ther difficult to find, or not on the internet. This difficulty translates into one of the recommenda- tions of the report - to  create national reporting standards - so that the information (if it exists) is more accessible and transparent to the public.150 The National Charity Law Since 2008, public announcements have been made by  the Ministry  of Civil Affairs about the drafting of national Charity  Law  (Císhàn fǎ, 慈 善 法 ). In 2008 Senior officials at the MCA ex- pressed, that the law would be passed “in no more than one or two years.”151 Since then, an- nouncements have continued but no passage or promulgation have yet occurred. Media reports have acknowledged continued delays due to the “lack of practical experience of charity  work 54 149 Ibid., 20. 150 Ibid., 23. 151 Lan Tian, “Nation to have charity law within 2 years,” China Daily, September 17, 2009, accessed January 12, 2012, 2%2% 5% 21% 70% Not satisfied Not very satisfied General Relatively satisfied Very satisfied Data source: CCDIC, 2010 China Transpar- ency Report (2010年度中国慈善透明告) (Beijing: CCDIC, 2010), 21. Figure 5: Public satisfaction with civil society information disclosure and difficulties in balancing the interests of different groups.”152 The Law has been listed on the legislative agenda of the National Peopleʼs Congress (NPC) Standing Committee but has re- mained in a drafting phase in the State Council Legislative Affairs Office since 2010. Many professionals believe that the Charity  Law will address many  of the heretofore unad- dressed or ambiguous issues surrounding giving and civil society. These issues may  include: defining (and allowing) donation solicitation and collection by  private foundations and other civil society  organizations, defining the nature of charity organizations, standardizing the preferential tax policy, streamlining the registration process for civil society, defining the internal governance of civil society, and particularly, establishing transparency  and reporting requirements for civil society  organizations. However, reports indicate that many  of the primary  changes contained in the draft law  lack consensus within the government about the overall role of civil society  in the PRC.153 Throughout 2011, announcements continued about the Law in the press. As the scandals broke throughout the year, the press published quotes and stories in support of the passage of the Law  - saying that “institutional rules are needed to regulate and supervise the countryʼs charity operations.”154 The continued delay in passage of a national Charity  Law establishing transparency  and re- porting requirements (as well as other improvements) of civil society, has further deteriorated the publicsʼ trust in civil society. The NPCʼs slow action has resulted in the MCA to promulgate their own transparency  guidelines. Provincial and local governments have also acted in the fol- 55 152 Bao Daozu, “Charity law faces delay,” China Daily, November 3, 2010,; Lian Mo, “Beijing looks at laws on philanthropy,” China Daily, November 3, 2010,; Fu Wen and Song Shengxia, “Banquet grills Chinese rich,” Global Times, September 29, 2010, (all accessed January 12, 2012). 153  Translated by Bo Liang Xin Li, based on original report in Chinese from Peopleʼs Daily, November 10, 2011, accessed January 24, 2012, 154 Editorial, “Charity legislation,” China Daily, April 28, 2011, accessed February 6, 2012, lowing places: Jiangsu and Henan Province, Ningxia Autonomous Region, Guangzhou and Ningbo City.155 Institutional Behavior and Differences The Ministry of Civil Affairs156 and the Ministry  of Finance (MoF, cáizhèng bù, $ 政 部)157 are the principal regulatory  authorities that influence individual giving behavior. These ministries are guided by  their own institutional behavior158  as regulated by  the statutes that created and direct their work. In 2008, the MCA issued their own “Working Rules of Civil Affairs”159 that directs their institutional behavior. It includes sections on all of the major issues of organizational oversight such as leadership and implementation rules, as well as puts forward the philosophies that should guide their work.  The MoF has the statutory  responsibility  to develop tax legislation re- forms and policies, it also has itʼs own institutional directives that guide its behavior. In the PRC, like most other governments around the world, institutions - although working for the same government - have differing priorities and interpretations of their role in govern- ment. The competing mandates often work themselves out in policy. This is likely  the case when considering the Charity Law. The MCA was asked to draft the Charity  Law and submit it to the State Council and National Peopleʼs Congress. While the MCA does have a large role in the oversight and administration of giving in the PRC, the MoF oversees changes in tax reform. The final draft of the Charity  Law is likely to include changes to tax exempt status of organizations and other tax related issues. It is likely  that the MCA has a more progressive interpretation of what the Charity  Law should consist of with a focus on monitoring and supporting civil society. Their draft of the law 56 155 Jianghong Chen, “地方性慈善条例出台重推“透明”条款” (Local charity regulations have introduced the terms of the re-launch the ʻtransparentʼ),China Philanthropy Times, November 8, 2011, accessed Feb- ruary 6, 2012, 156 For Ministry of Civil Affairs responsibilities, see: 157 For more information, see: 158 Floyd Henry Allport, The Behavior We Call Our Institutions, in Institutional Behavior: Essays Toward a Re-Interpreting of Contemporary Social Organization (Chapel Hill, North Carolina: University of North Carolina Press 1933), 3-28. 159 Further detail is provided at the MCA website: (accessed February 2, 2012). and the tax related issues are likely  to support the increased tax preferences for civil society. Conversely, the MoF is likely  to have a more traditional view  of the purpose for the Charity Law, because it is responsible for the administration of fiscal policy  and government macroeconomic issues. Itʼs interpretation would therefore be inclined towards limiting overall tax deductions be- cause they would decrease the revenue stream for government expenditures. These and other differences in institutional behavior are likely to continue influencing giving opportunities. Guidelines for Transparency This year (2011), was a difficult year for giving and civil society. Numerous scandals160 were reported and publicized throughout the year which affected giving dramatically  - emphasizing the connection between public perception of civil society  and donation levels. During the three months after the Guo Meimei scandal161  donations declined by  80%.162  This was the best known incident, but there were many others during 2011.163  Issues surrounding financial over- 57 160 See: Edward Wong, “An Online Scandal Underscores Chinese Distrust of State Charities,” New York Times, July 03, 2011,; Ken Wills and Jonathan Thatcher, “Donations to charities in China plunge after scandals,” Reuters, August 12, 2011,; Grace Ng, “China acts on anger over charity scandals,” The Straits Times, August 29, 2011,, (all accessed January 25, 2012). 161 Guo Meiei claimed that she worked at the Red Cross Society of China (she did not) on Sina Weibo (which verifies professions) where she blogged about her wealth through posts about her cars, travel and other upper-class trappings. Going viral in June 2011, the scandal resulted in public distancing and even- tually apologies from the Red Cross Society of China and a closure of the commercial arm that Guo claimed to work for. 162 Donations fell from 6.26 billion yuan during the three months previous to the scandal to 840 million during the three months after the scandal broke. Malcom Moore, “Chinese charity donations fall 80 per- cent,” The Telegraph, August 12, 2011, accessed January 25, 2012 nt.html. 163 In April, a photograph of a restaurant receipt for a 9,859 yuan ($1,510 USD) meal hosted by the Shanghai Red Cross was posted on the web. In July, the tennis star Li Na publicly shunned the Red Cross and gave a donation directly to a recipient in her home town. Pan Yan, “Trust in charities waning,” Global Times, April 19, 2011, sight of civil society  resources were so damaging in some places that organizations were shut- tered because of public mistrust.164 Transparency, trust and accountability  were the central themes in the media and blog post- ings during that period of time. Most called for improved transparency  and reporting require- ments to restore public trust to these organizations. Repeated calls for information about the murky institutional inter-workings of the organizations in question were also made. However, public disapproval was not directed at all civil society. It was drawn particularly  at state-affiliated organizations (in this case the Red Cross Society  of China165). But, in the end, the scandals affected donations sector wide.166 In response to the continued scandals and calls for improvements in the sector - and likely due to the lack of a national Charity Law - the MCA promulgated new Charity  Donations Disclo- sure Guidelines (公益慈善捐助信息公开指引) on December 30th 2011.167  These guidelines are for “all types of charitable organizations” and are intended to “enhance the transparency  of in- formation, improve the social credibility  of the charity  organizations, to guide the effective use of charity  resources, and promote sustained and healthy  development”168 of charitable giving to 58 164 It has been reported that a public foundation in East China will be shut down due to fraud and trans- parency issues. The Ningbo Anti-cancer Health Foundation is said to have lost credibility since 2007 when it raised 1.5 million yuan but gave 45 percent of its donations to an advertising company that was involved with its fundraising campaign. The local authorities have responded by banning the Foundation. See Zhang Yuchen He Dan, “Jet Li's One Foundation goes public,” January 12, 2011, accessed January 12, 2012, 165 Donations to the RCSC fell from 3.01 billion yuan in 2010 to 385 million yuan in 2011. He Dan, “Chari- ties ʻmust boost transparencyʼ,” China Daily, February 6, 2012, accessed February 6, 2012, 166 Ibid. 167 Charity Donations Disclosure Guidelines are found here: (accessed January 12, 2012). 168 Chinese text: 第一条 增强慈善捐助信息的透明度,提高公益慈善的社会公信力,引
公益慈善& 源的有效使用,推慈善事持健康 展 (Translation provided by Google Translate). the public. These guidelines are a step towards better transparency  and reporting of donations in response to the deteriorating environment, but after-all, they are only “guidelines.”169 Local Authorities Develop Transparency Regulations Even before the scandals of 2011, local authorities recognized the need for improved trans- parency  requirements. Provincial and city  governments have developed their own standards to thwart misappropriation of civil society  resources. The following examples provide an insight into the ways local authorities have moved ahead of the national PRC government on this issue. Jiangsu Province was the first local authority  to pass their own regulations in January 2010, which went into effect on May 1, 2010.170  Articles 14 and 15 directly  address the issues of transparency  by  requiring the establishment of financial management and auditing, as well as requiring that annual reports be made publicly  available and include: information about organi- zation leadership (board of directors and staff), financial statements, audit reports, distribution of work funds and staff wages, and the condition and effectiveness of charitable programs.171 The Henan Province Civil Affairs Office released their own regulations on October 25, 2011. The “Measures for Donation Information Openness in Henan” require civil society  organizations to disclose publicly  their donation information and if they  do not meet these measures face clo- sure by  the authorities. The measures also require civil society  organizations to respond to in- 59 169 The Guidelines are “intended to guide specifications for public information of the various charity or- ganizations and institutions, local government authorities to develop relevant policies and regulations to provide a reference text for the understanding of the community and the public, access to and supervision of charitable contributions information to provide a reference standard, thereby enhancing the transpar- ency of the charitable contributions of information and improve the social credibility of the charity organi- zation, and guide the effective use of charity resources, and promote sustained and healthy development of philanthropy” (Translation provided by Google Translate) The original Chinese text: 本指引旨在各类 公益慈善和机公开信息提供指
性范,地方政府主管部門制定相关政策法提供参考性文本, 社会和公了解、取和督慈善捐助信息提供参照性准,从而增强慈善捐助信息的透明度,提高公 益慈善的社会公信力,引
公益慈善&源的有效使用,推慈善事持健康 展。The guidelines are available here: (accessed February 7, 2012). 170 “Jiangsu province passes first local regulation on charity,” China Daily, January 25, 2010, accessed on February 7, 2012, 171 Called the “Regulations on Promotion of the Public Welfare” 《江省慈善事促+条例》were passed by the Jiangsu Provincial Peopleʼs Congress and are available here: quiries by  donors about the allocation of their resources - and if they do not - donors may report their inaction to Civil Affairs. Ningxia Autonomous Region, released the “Regulations on Promoting Charity” (慈善事促 +条例) on November 1, 2011 which requires civil society  organizations to report their budget to the local Civil Affairs office every six months. The Regulations also require organizations to dis- close publicly  a detailed annual financial and donation report that includes how resources were used (including working expenses and staff salaries) by January 30th each year. Ningbo City  passed their own “Regulations on Promoting Charity  Causes” a month before Ningxia to curb popular negative perceptions of civil society. Recognizing the need to enhance the credibility  of civil society  organizations, the regulations require organizations to make public their fundraising activities 20 days after a fundraising campaign and submit a report to Civil Af- fairs “to facilitate public oversight of the whole process.”172 The organization is also required to issue donation receipts and open itself to external audits. Guangzhou City  passed similar “Regulations on Donations” (广州市募捐条例) October 26, 2011,173 requiring an annual audit “in order to enhance transparency” of civil society  resource allocation. These Regulations go one step further than the previous provinces and cities how- ever by  providing an opportunity  for civil society  organizations to fund-raise.174 As passed, these Regulations provide the first opportunity  for civil society  organizations to solicit their own funds without the direct oversight of a government entity  or for a brief allowance as witnessed after the Sichuan earthquake. The purposes of these fund-raising activities do come with certain limita- tions175 and requires that fundraising activities (the money spent to solicit funds) not exceed 20% of the annual budget. 60 172 Information about Henan Province, Ningxia Autonomous Region, Guangzhou and Ningbo City are provided by: Jianghong Chen, “地方性慈善条例出台重推“透明”条款” (Local charity regulations have introduced the terms of the re-launch the ʻtransparentʼ),China Philanthropy Times, November 8, 2011, accessed February 6, 2012, 173 The Regulations are similar to those passed by the Guangzhou Peopleʼs Congress. Ibid. 174 The ability to fund raise in Guangzhou had previously been restricted to the Red Cross and public foundations. These Regulations removed the previous limits. Ibid. 175 The limitations are: supporting the old, disabled, save the solitary, poor and needy, and disaster relief (如扶老、助残、救孤、困或者'灾目的而 立的#类。). Ibid. Conclusion • “If people stop  donating due to the lack of transparency of nonprofit organizations...the development of Chinaʼs modern charity  will have no hope.”176 Yongguang Xu (Narada Foundation Chairman) This paper has evaluated the two diverging perspectives of giving in the PRC. One rates the giving that occurs to a ʻcharity;ʼ the other, includes characteristics specific to the Chinese con- text. It has been argued throughout this paper that rating giving in purely  western terms of giving is not appropriate - even misleading. China has a long history  of benevolence and charity-like organizations that continue to influence charitable behavior today. Giving is increasing dramati- cally and civil society is growing. It has also been argued that a decay of trust in civil society  organizations has resulted in an alarming decrease in giving. There are however solutions that can reverse this trend. Political decisions to improve the transparency  and reporting requirements of these organizations could serve to bolster trust. When trust is restored, giving will increase. This paper has also provided an overview of the social, cultural, economic and political in- fluences on giving in the PRC. Chinese socio-cultural and religions underpinnings, and current economic climate all point towards increased growth in giving. Political decisions such as changes to tax laws, drafting a national charity  law, and instituting transparency  guidelines, have also generally  supported the growth individual philanthropic giving and the development of civil society. The following conclusions can be drawn: Individual giving is growing. Remarkable economic growth has provided an opportunity for increased giving as incomes rise and disposable resources grow. These changes have cre- 61 176 Chinese text: 如果因慈善透明度不高而 誓“永不捐款”;如果因慈善官色彩重而把去行政化 成去化;如果把慈善化管理所需成本看成是“雁*拔毛”而倒退-光式的个人布施行, 那中国代慈善 展就没有希望了。(Translated by Yuan Wang, revised by Michael Tozer, Harvard Ken- nedy School, accessed January 11, 2012, ated the opportunity  for the burgeoning new  sector of society that is increasingly  providing serv- ices that the PRC government has traditionally provided. Individual giving is changing. The modification and development of tax, donation and civil society  laws have encouraged and incentivized individuals to give resources. Individuals are increasingly  giving to civil society  organizations, a shift from the historical model of giving di- rectly  between donor and donee, or to a voluntary  society, or benevolence association located in an individualʼs own community. Chinese giving is different from western giving. Unlike giving that occurs in western countries, the majority  of donations go to government departments, state-led organizations (Chinese Red Cross, China Charity  Federation) and public foundations.177 During the Sichuan earthquake the proportion was even higher - 94% of public donations went to the government, the Red Cross Society of China, and charity federations.178 Individual philanthropic giving is at  a critical juncture. Public sentiment has shifted against giving and civil society  due to repeated publicized scandals and concerns about trans- parency. The year 2011 has typified the publicʼs skepticism about the collection, use and disper- sement of resources by  civil society  organizations. Total donations have decreased by 50% from 2010 levels and down 67% from 2008 levels. National transparency and reporting requirements are needed. It has been argued throughout this paper that the PRC government has not moved fast enough on the issues that plague the growth of individual philanthropic giving. The scandals that have occurred in 2011 could have largely  been avoided. Transparency and reporting requirements would help  to curb future scandals and build trust in civil society. National policy  needs to be enacted to improve transparency  and oversight requirements, to strengthen trust in civil society, and to reduce the negative consequences of the current statutory requirements. Local authorities are moving ahead of the national government. With the developments witnessed around the country, such as in Guangzhou, individuals are beginning to have oppor- 62 177 Combined, 61.22% of total donations made in 2009 were received by the Ministry of Civil Affairs, China Red Cross, China Charity Federation and public foundations. 2009 Giving Summary, Ministry of Civil Affairs, September 25, 2010. 178 See Table 3 for more detail on these calculations. tunities to donate to civil society  organizations that have not been able to solicit funds in the past. Innovative solutions, such as the NPI affiliated Shanghai United Foundation are also pro- viding opportunities for organizations to solicit and receive resources for their operating and program expenses. The government  needs more giving and civil society. The PRC government is uncom- fortable with the expansion of civil society, because of the potential threat to the status quo. The dilemma though, is that it also needs to decrease reliance on the state for needs that it has tra- ditionally  provided. As the PRC balances the growth of giving and civil society  with heavy regu- lations and monitoring due to fears about subversive activities; while also addressing the needs of the people - the result will be a shift towards a greater reliance on the financial support of in- dividuals to support the services once provided by the state. Unchecked giving concerns the government. As with the concerns about the growth of civil society, unchecked and unmonitored giving has the potential to support subversive activi- ties. Opportunities for organizations to solicit funds and for individuals to give to civil society  will increase, but oversight of these funds will continue for the foreseeable future. Neoliberalism influences giving. Neoliberal changes to commerce and governance have both spurred and curbed the growth of giving and civil society. The structural adjustments ne- cessitated by  neoliberal principles and changes to government revenue streams have resulted in the reduction of government programs. These changes have spurred the growth of civil soci- ety  to meet the needs of individuals that were once dependent on the state for assistance. Likewise, the increasing financial and personnel needs of civil society  organizations have re- quired an increase in philanthropic resources. Individuals that have benefited from neoliberal economic changes will increasingly  practice philanthropic giving to dampen the affects of ine- quality. Interest  in civil society is growing. Inequality, a growing gini coefficient, a changing soci- ety  and governance shifts all contribute to a growing interest in the issues addressed by civil society. As the middle class grows and more individuals have disposable income, more indi- viduals will have the ability to act on their Confucian social-cultural motivations for giving. 63 Giving is not always altruistic. Individuals give for many reasons. There are those that give because they  are motivated by  benevolence. There are also those that are motivated by more selfish motives. Giving sometimes serves to quell inequality, raise the profile of an individ- ual, or play  a role in business and governmental relations. In the PRC, these realities have par- ticular peculiarities. Individual philanthropic giving is therefore not altogether altruistic. Overall Significance of This Research This paper provides an innovative investigation of the influences on giving and an interpreta- tion of the underlying motivations in the PRC. This review has also provided an overview of  the critical juncture in the relationship between the state and civil society  in China - one that could develop into mutual assistance if adequate reforms are made to transparency  and reporting re- quirements. It has also laid out policy  recommendations for reasonable advances and opportu- nities for future growth. The Limitations of This Research The availability  of accurate data is the single largest limitation of this research. Although the MCA does publish more information than might be expected, there still exists an acute lack of data about donations made to organizations that either donʼt report their activities to the PRC government, or are not officially  registered and also donʼt report their activities. Of the over one million organizations that are believed to exist in the PRC, fewer than half are registered.179 Those that are not registered - it is assumed - do not report their activities and financial ac- counts. Additionally, the statistics that do exist are those made available by  the PRC govern- ment. No non-governmental independent organization is currently  tracking total donations, rais- ing further concerns about the accuracy  of the information that is published. As more information becomes available and independent organizations begin reporting on the overall flow of re- sources, more advanced study can occur on this topic. 64 179 Lan Tian, “Nation to have charity law within 2 years,” China Daily, September 17, 2012, accessed Feb- ruary 2, 2012, The surveys that were used in this research were limited in scale and scope. The Worldview poll represents only  2,000 respondents from a country  of 1.3 billion people. The Asian Barome- ter is a slightly larger sample size with 3,154 respondents. Much of the information contained within this research relies heavily  upon official govern- ment announcements, literature and news media reports. Relying on the press in the PRC is a limitation in its own right. Independent reports and evaluations were used in instances that they were available, but inevitably  the majority  of these independent reports relied on PRC news sources. This approach provides a country-wide perspective of giving, but does not provide much information about regional and local realities and advancements. Academic resources to draw from are very  limited. Literature abounds on topics of civil soci- ety  which did provide a useful perspective on the overall development of the sector in the PRC, but lacked a thorough evaluation of individual philanthropic giving. This paper has described only  a slice of modern Chinese history  with respect to giving cul- ture. History  - particularly  in China - influences the giving that occurs today, and the laws and institutions that exist in the current context. While a thorough review of the historical factors that influence giving in the PRC today was not included, an attempt was made throughout this paper to draw the influence of history on the issues raised herein. Application of the Findings The findings of this paper may inform policy  directions and decisions. It is this authorʼs opin- ion that with small changes to the regulatory  structure in the PRC - as recommended - unprece- dented giving will start to occur. This paper could also function as a road map for navigating the nuances of Chinese culture, business practices, and government regulations that influence giving in the PRC. International foundations, NGOs and academics may use this paper to further inform their understanding of giving in China. Future Research Directions If the regulatory changes that are recommended in this paper become reality, individual phil- anthropic giving will continue to grow  at a rapid pace. In the near term, this growth will first be 65 felt within the borders of the PRC  as government begins increasing its partnership with civil so- ciety  to address the social needs of the country. In the long term, this growth will be felt around the world. Already, Chinese civil society  organizations are looking beyond their own borders to provide aid to victims of natural disasters.180 As this trend becomes more common, Chinese giv- ing will start to have a great influence on the shape, form and character of international disaster relief. This trend will undoubtedly  continue into other international concerns such as poverty  al- leviation, environmental issues, and other international aid issues and will influence the direction of future work in these areas. The following are other areas that are suggested research directions: • Conduct a quantitative study to better understand the questions: How many Chinese know that their charitable giving qualifies for a tax deduction? • Develop a case study that evaluates these two hypotheses: If transparency and donation reporting requirements of organizations receiving donations are improved, then trust in these organizations and individual philanthropic giving will increase. If improvements are not made to increase transparency and reporting, then philanthropic giving and trust will deteriorate. • Complete a comparative analysis of giving and philanthropy in East Asia. 66 180 “One Foundation Provided Emergency Aid to Yunnan and Japan Earthquake Victims,” March 15, 2011,; and, “One Foundation, Thailand, Korea Disaster Relief - funded one million yuan to help children affected,” January 6, 2012,, (both accessed January 16, 2012). Bibliography Alagrappa, Muthiah, ed. 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Information available here: 76 Table 3: Sichuan earthquake donations breakdown Type of organization Amount received (¥100 million) Proportion (%) Departments of Civil Affairs 209.38 32.1 Other central functional departments of government 44.65 6.8 Other local functional departments of government 28 4.3 Special party dues 97.3 14.9 Red Cross Society of all levels 138 21.1 Charity Federation of all levels 96.53 14.8 National public fund-raising foundations 10.64 1.6 Local  public fund-raising foundations 28 4.3 Total 652.5 100 Total: Government, the Red Cross Society of China, and charity federations 613.86 94 Data sources: China Charity Information Center, “Donation for 5.12 Earthquake Disaster Relief Sets Re- cord”, China Philanthropy Times (special issue of All-China Charity Conference), December 12, 2008. Information collected by Shawn Shieh and Guosheng Deng, adapted by permission. 77 78 Total Incomplete primary/ elementary Complete primary/ elementary Incom- plete secondary /high school: technical/ vocational type Complete secondary /high school: technical/ vocational type Incom- plete secondary /high school Complete secondary /high school Some uni- versity education University education completed Post- graduate degree Decline to answer Trust in NGOs None at all 8.30% 6.80% 7.90% 11.60% 9.40% 12.30% 9.00% 7.90% 5.70% 17.30% 4.20% Not Very Much Trust 45.70% 33.10% 44.90% 49.10% 52.30% 57.50% 53.00% 67.40% 62.90% 79.80% 30.60% Quite a Lot of Trust 14.50% 14.70% 15.60% 14.10% 14.40% 7.40% 14.20% 11.20% 14.50% 3.00% 14.80% A Great Deal of Trust 7.20% 8.90% 7.30% 9.00% 6.40% 10.70% 5.10% 1.10% 3.40% - 9.30% Do not un- derstand the question 3.10% 6.00% 2.80% 2.90% 1.90% - 0.40% - 1.70% - 7.20% Can_t choose 18.10% 26.10% 18.70% 11.60% 13.50% 6.10% 15.00% 12.30% 8.60% - 31.20% Decline to answer 3.00% 4.40% 2.80% 1.60% 2.10% 6.00% 3.40% - 3.30% - 2.70% Total 5098 (100%) 1182 (100%) 995 (100%) 341 (100%) 1419 (100%) 74 (100%) 588 (100%) 44 (100%) 176 (100%) 7 (100%) 273 (100%) Table 4: Trust in NGOʼs by education level (2008) Source: Asian Barometer Survey, Department of Political Science, National Taiwan University (Taiwan: 2008), by permission. 79 Source: Asian Barometer Survey, Department of Political Science, National Taiwan University (Taiwan: 2008), by permission. Table 5: Trust in NGOʼs by Religion (2008) Total Roman Catholic Protes- tant Islam Bud- dhist Taoism Other None Decline to answer Trust in NGOs None at all 8.30% 11.10% 5.40% 23.30% 11.00% 5.20% 12.70% 7.90% 6.70% Not Very Much Trust 45.70 % 55.20% 40.00% 54.30% 44.10% 31.00% 33.50% 47.10% 20.60% Quite a Lot of Trust 14.50 % 5.80% 21.10% 11.60% 13.10% 2.90% 6.80% 15.00% 8.10% A Great Deal of Trust 7.20% 4.50% 7.00% 5.50% 8.20% - 11.50% 7.20% 7.80% Do not under- stand the question 3.10% 9.30% 8.20% - 2.10% 4.80% 1.70% 3.10% 2.40% Can_t choose 18.10 % 14.20% 13.70% 5.40% 19.60% 52.70% 33.90% 17.00% 40.10% Decline to answer 3.00% - 4.50% - 1.90% 3.50% - 2.80% 14.30% Total 5098 (100%) 13 (100%) 128 (100%) 24 (100%) 625 (100%) 54 (100%) 16 (100%) 4119 (100%) 119 (100%)


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