Challenges to the Growth of China's Nonprofit Sector

Earlier in September, Eileen Heisman, CEO of the National Philanthropic Trust, wrote in Nonprofit Quarterly (NPQ) about the differences between Chinese and U.S. style philanthropy. The article touches on three socio-political and economic “key differences” that include an emphasis on government rather than the individual to “provide support for human and social services,” the lack of government-approved charities, and the lack of a reliable infrastructure to facilitate giving.

Despite these challenges, she continues, China’s nonprofit sector is growing; particularly since 2008 and the massive Sichuan earthquake, “a watershed moment in philanthropic awareness” that resulted in 54% of the $15.7 billion disaster relief fund total coming from individuals. In tandem with increasing profit margins of Chinese corporations that are increasingly looking to give back, the future of charity, aid, and philanthropy in China looks promising despite huge challenges.

Her prediction? “Chinese philanthropy will leapfrog over American philanthropy.” Through new media, grounded in U.S. technique, the nonprofit sector in China is poised to take off – perhaps even surpass the U.S. model.

While Ms. Heisman’s prediction is as bold as it is desirable, to realize it will require vision, risk and long-term commitment from all stakeholders. Give2Asia, for one, has been actively building this new philanthropic landscape in China since the 2008 Sichuan Earthquake. While progress has been made in the past five years, the positive change has recently become exponential.

Last week, Give2Asia published the first report from Foundation Leadership Training a joint project with The China Foundation Center (CFC), which aims to reconcile, “a growing gap between the supply and demand of well-qualified senior staff to run these foundations, which jeopardizes the effectiveness and efficiency of foundations, as well as the healthy development of the philanthropic industry.”

Over the last year, 74% of Chinese foundations have publicly released information on their projects and donations through CFC’s Foundation Transparency Index (FTI). At the same time though, 70% of the information disclosed by those organizations were confusing and vague. In an interview with the Beijing Times, Xiao Rong, Give2Asia Country Representative for China, said, “the lack of trust is like a tumor that is growing and detrimental to the healthy development of philanthropy in China. To remove the tumor it is necessary to be open and transparent.”

In line with that idea, Give2Asia has launched a year-long mentorship program for grassroots NGOs and foundations in Beijing in partnership with the Education Donor Roundtable, and supported by the Ford Foundation. The program, which began in 2013 is aiming to produce reports by June 2014 from selected grassroots, non-profit, organizations in China on their improvements they have implemented based on the program.

As Heisman states, China’s nonprofit sector is indeed changing for the better, but the challenges it faces will not be tackled independently of “American philanthropy,” but rather in a partnership with it.

That is why the most valuable and impactful elements in doing Sino-U.S. philanthropic work will continue to be local expertise and transparency.