More transparency needed in charities

Chinese charities are working hard at transparency, but most still need to improve, says report.

An annual report by the China Charity Information Center says that despite overall improvement in information disclosure, charity organizations still need to work at making their financial information transparent to the public.

The 2012 annual report on the transparency of charity organizations, from data drawn from surveys and interviews carried out among 500 charity organizations in China, has composed a transparency index to rate the organizations.

According to the report, this year the overall rating on the transparency index is 45.1, which was an improvement compared to the 33 points rated last year.

The report also noted that the public was more satisfied with the information disclosure. Last year, 92 percent of respondents from an online survey said they were not happy with how charities published their financial accounts. This year, only 61 percent felt that way.

However, among all the evaluative indicators in the index, financial transparency is still the weakest.

The report said organizations in general failed to disclose the cost of transactions and financial status.

Only 182 organizations published financial accounts in their annual reports. Among 240 organizations publicizing their donation information, only seven reported project budgets and seven revealed financial accounts.

A previous report, jointly released by the China Foundation Center and Tsinghua University's School of Public Policy and Management, said 1,380 charitable foundations, 60 percent of the national total, failed to make public their annual financial reports although they are legally obliged to do so.

"Further regulation is needed to address the issue," Liu Youping, deputy director of the center said.

"Currently, there are numerous regulations at different levels trying to solve the issue, but they have different requirements and some are even conflicting," he said."However, it is good to see the improved ratings."

According to Liu, stricter legal supervision has led to more transparency in 2012.

In February, the National Bureau of Corruption Prevention listed anti-corruption in social welfare fields as one of their priorities, in enforcing regulations on full financial disclosure for charities.

Xu Jianzhong, an official from the Civil Affairs Ministry in charge of social welfare and charity organizations, said the government is further regulating the transparency in charity operations. The ministry is now drafting new guidelines for charities that are to be launched this year.

To better promote transparency, the report has urged the building of a platform on which charities can post financial disclosure, and this would bridge the gap between the charity and the public's right to know.

As Liu notes, "transparency is the means, not the end", because charity organizations need to win public trust if they are to successfully solicit support so they can better operate.