Charity regulations to boost transparency

The Chinese government publicized a set of regulations Sunday asking charity foundations to regularly publish financial reports and tighten internal management.

The regulations, published by the Ministry of Civil Affairs on its website, require charity foundations to regularly publish detailed reports on donations and expenditures after a charity project starts.

If the project operates for over three months, financial reports should be published quarterly and a comprehensive report should be released for public scrutiny at the conclusion of the project, according to the regulations.

The regulations acknowledge the donors' rights to know how their money will be spent and make it clear that foundations must "give truthful answers in a timely manner".

Those who violate these rules can be disqualified in their annual appraisal or receive administrative punishment, according to a statement issued by the ministry.

Moreover, the regulations stipulate that "foundations should not fund any profit-seeking activities."

The regulations are the government's latest efforts to boost transparency and enhance supervision in the sector.

China had about 2,500 registered foundations at the end of 2011, over twice the number it had in 2005. Their total assets reached more than 60 billion yuan ($9.52 billion) and donations received totaled 33.7 billion yuan in 2011, according to the ministry.

However, there has been increasing public concern about the transparency and conduct of charity groups after a string of embezzlement scandals over the past few years have put a dent in the sector's credibility.

The most famous case revolved around a young woman named Guo Meimei, who claimed to work for an organization under the Red Cross Society of China (RCSC) and boasted of a lavish lifestyle on her microblog.

Although Guo was later found to have not been employed by the RCSC, the incident prompted worries of charity fund embezzlement and triggered calls for stricter scrutiny.