'One bad apple'
"In the charity sector, one bad apple spoils the whole barrel. Illegal behavior jeopardizes the whole sector, so it's very important that supervision is strengthened to make philanthropy more popular with the general public," said Li Jing from the One Foundation.
Kan said the proposed legislation aims to improve the development of the charity sector, raising public awareness and encouraging more people to donate money.
"Over the past few years, the total amount donated annually has been about 100 billion yuan. That may sound a lot, but in fact, it's not a huge sum," he said.
According to the 2015 CAF World Giving Index, published in November by the Charitable Aid Foundation in London, Chinese people are reluctant to donate money to charities or volunteer to help. The survey ranked China next from last on a list of 145 countries and regions, only above Burundi.
"The reason lies in the public's low awareness of charity, and distrust of charitable organizations. We hope the new legislation will regulate the founding, operations and the methods of donation of charitable organizations, because the more regulated the industry is, the more donations we will receive," Kan said.
Fung Danlai, a CPPCC National Committee member and a former member of the board of the Tung Wah Group of Hospitals, said: "Just as many international NGOs play important roles in helping governments take care of people in need in their countries, it should be the same in China. Charitable organizations should play their roles to care for the underprivileged," she said .
"Hong Kong has the Tung Wah Group of Hospitals with a history of 150 years, which is the oldest and the largest charitable organization in Hong Kong. Not a single Hong Kong family can say they have never received help from the Tung Wah Group. This is what a non-profit organization should be; the government's right-hand man, helping people in need," she said.
A comprehensive legal framework will be an essential factor in improving transparency and funding for social organizations in the Chinese mainland, according to Fung: "Charitable organizations and the people involved should follow the law. It must be planned correctly. Charitable organizations should be run scientifically so they use donations correctly and help people."
Kan, from the NPC, said the complicated registration procedures for charitable organizations have discouraged both individuals and organizations from joining the sector. The new law has been drafted to reduce red tape and simplify the entry procedure. It also includes a number of favorable tax policies for charitable organizations, and will provide tighter supervision.
"That's a good thing. After all, the donated money is not the organizations' money, so they cannot use it as they want. The public has a right to know whether the money is being used effectively," he said.
According to Li Yuling, from the China Charity Federation, the new law will streamline administration of the sector. "All social organizations are currently required to register with the civil affairs departments, but they also have to register with a related government department, which acts as their supervisor. That's very inconvenient. The new law will change that, which is good news."
Li Jing, from the One Foundation, believes the legislation will give organizations greater independence. "There is no doubt that the coming charity law will be excellent news and a milestone in the improvement of philanthropy in China. The draft specifies that charitable foundations and donors will be allowed to enter into agreements about administrative costs," he said.
Under the current legislation, the cost of administering individual donations, which includes salaries of staff members, cannot account for more than 10 percent of the total annual donation. For example, only 50 yuan of an annual donation of 500 yuan can be set aside for administrative costs. The new law is likely to allow the parties to reach a bilateral agreement on the proportion of a donation that can be used to pay salaries and other expenses.
Interest overseas
The proposed legislation has also attracted attention outside China.
"We see the new law as a very positive development. The proposed law seeks to promote a culture of charity, as well as to protect the rights and interests of charitable organizations, donors, volunteers, beneficiaries and others who work in the field of charity," wrote Pia MacRae, country director of Save the Children in China, in an e-mail exchange with China Daily.
MacRae emphasized that effective regulation and supervision will boost public trust in the sector: "Our greatest hope for this new law is that it is a catalyst in the further development of China's philanthropic sector, through both recognizing and encouraging the role that charities can play in social development, while also ensuring that the sector is well-managed and transparent."
Meanwhile, Diana Tsui, head of Global Philanthropy for Asia Pacific at JPMorgan Chase, said the legislation will provide greater clarity and supervision. "We need reputable and strong local NGO partners to help deliver on commitments. With the new law put in place, our local partners will become more transparent and accountable in delivering impact on the ground," she wrote in an e-mail to China Daily.
While charity sector professionals have been debating the implementation of the new law, and many NPC deputies have submitted proposals and suggestions during the two sessions, Li Jing said implementation will just be the first step in the process, and charitable organizations will have to play their part, too.
"The big questions that remain are how to carry out charitable activities according to the provisions outlined in the new law, and how to revise the current outdated regulations so they adapt to it. We need to continue looking into them to find the right answers," he said.
Su Zhou contributed to the story.
