Charities suffer as public remain wary

A new charity in Guizhou province has received no donations since it was established in June, a situation experts say reflects the lack of trust in organized charities. 

The Guizhou Provincial Fund for Education Development claims it has sent out more than 1,000 letters to enterprises and individuals since August asking for donations but has so far received no positive response.

Companies and the public used to be enthusiastic about philanthropy and approach charity funds voluntarily, Zhou Yijiang, secretary-general of the fund, told China Daily on Monday.

But the public's trust in charities has been under a cloud ever since the Guo Meimei incident, he said, adding his fund, despite administrated by the local education government authority, remains affected by the scandal.

The Red Cross Society of China has been struggling to restore its reputation, which was badly damaged in June when Guo, a 21-year-old woman, alleged to be a manager of a group affiliated with the society, bragged about her lavish lifestyle online.

The posts sparked speculation by netizens' on the society's vulnerability to fraud and prompted the Red Cross to investigate. The society eventually acknowledged that management failures existed in its organizational structure.

Although the society denied any association with Guo, many local branches of the organization and other charity funds have recorded substantial drops in donations.

According to early figures from the China Charity and Donation Information Center, non-governmental charities and funds received 6.3 billion yuan ($1 billion) in donations from March to May in 2011. But the total slumped to 840 million yuan from June to August that year.

At a local level, the Beijing branch of the Red Cross Society of China received 154,400 yuan of civil donations in July, 2011, far less than the monthly average of 2.2 million yuan in 2009 or 7.56 million yuan in 2010.

Zhou said the newly established Guizhou fund, which does not take management fees out of donations and operates with full transparency, is too new to have a damaging track record, so its failure reflects lack of confidence in charities.

The Guizhou fund is designed to help the development of schools in poor areas and will sponsor teaching, study and research programs, and support training for teachers and international exchange and communication.

According to official reports, more than 4 million of Guizhou's 8.53 million students came from financially strained families — the percentage is far higher than the average in China's western region which is 30 percent.

"We hope the public will not indiscriminatingly reject all charities, but instead give a helping hand," Zhou was quoted as saying by Workers' Daily.

However, many experts disagreed with Zhou on the cause of the fund's failure.

Tao Chuanjin, director of the Research Center of Philanthropy and Social Enterprise at Beijing Normal University, said although the Guo Meimei incident is still taking its toll, it has forced philanthropic funds to become more transparent and regulated in China. 

Tao said authoritative agencies have composed lists ranking the transparency of different funds and have improved regulations and processes for the operation of funds.

However, there has been speculation that the Guizhou fund was sending large quantities of letters in the hope of soliciting donations by chance rather than relying on its credibility.

"The public should distinguish the charity funds and treat them differently according to their credit history," Tao said.

While donations to funds and charities are dropping, donations made directly to people in need or through individuals with good credibility is on the rise, according to the China Charity and Donation Information Center.

Liu Zongyong, a well-known micro-blogger in Guizhou, started acting as a conduit between donors and people in need in 2008 after writing about the plight of 10 poor students to his 5 million readers

More than 20,000 donors have joined Liu's community through online group chat site, QQ. Volunteers of the community have handed out grants to about 600 poor students in the province. Now the community is responsible for 500,000 yuan of funds.

"Sometimes they don't trust the schools or anyone but us. They give the money to us and trust us to give money to students directly," Liu told China Daily.

"We don't know how to do the basic accounting or even the tables. But they said they trust us because we are doing real things. They see us being together with the students and they believe in it."