The overall charity environment may become more transparent in China after the country approved its first specific law on charity. But foreign organizations are no closer to having a clear position in society as it is unclear how the law will affect their work, experts said.
Donations from overseas accounted for around 10 percent of the 84.5 billion yuan ($13 billion) that China-based charities received in 2011, according to a report from the China Charity Information Center (CCIC) under the Ministry of Civil Affairs.
Though they are a small part of China's philanthropy sector, many foreign charities have introduced advanced management ideas and experience to China.
Passed on March 16, the country's Charity Law was praised for providing a legal foundation that could boost the development of philanthropy in China. However, the law does not provide regulation for foreign individuals', organizations', companies' and government bodies' charity activities.
Better macro-environment
Foreign individuals or organizations will benefit from the more transparent and ordered environment that the law may create, which may encourage more people to donate money as they will know for sure that their donations will be spent on a good cause, Liu Youping, deputy head of the China Charity and Donation Information Center, told the Global Times on Wednesday.
In 2014, China received foreign and domestic donations worth 104 billion yuan, and donations from overseas individuals and NGOs (not including donations from companies and governments, which make up the majority of such donations) were 2 billion yuan, with 90 percent coming from Hong Kong and the US.
A 2004 regulation on foreign charity says they are banned from directly collecting and receiving donations in China. They can cooperate with domestic foundations or directly transfer money and goods to "project implementers," said a report by Junhe Law Firm in January.
Domestic charity organizations must register with their local civil affairs bureau, and all their work will be closely supervised by that bureau.
"I do believe that the law will provide a better overall environment that is positive for everyone working in the charitable sector in China, including foreign foundations," Elizabeth Knup, representative of Ford Foundation in China told the Global Times. The Ford Foundation invests in the work of domestic charitable organizations.
"The law doesn't have much impact on us as it mainly oversees the activity of domestic bodies," Elizabeth said.
Uncertainties
However, foreign organizations are still in a "grey area" if they act independently without cooperating with any domestic parties, because the law does not mention the legal standing of foreign NGOs, He Lijun, a New York-based professor on public administration at Pace University, told the Global Times.
She added that the Charity Law benefits organizations that share the same philosophy as the Chinese government, while foreign organizations, which often focus on social issues or human rights, might be frustrated in this regard.
She noted that foreign NGOs may also be concerned about the management of the Ministry of Public Security (MPS) over the NGO sector, which will likely be expanded by the new law.
Safety concerns
Some have pointed out that the government is eager to resolve some national security concerns linked to foreign NGOs' poverty elimination efforts.
"Charitable programs are indispensable for the fight against poverty. Formulating a charity law ... helps nongovernmental sources work together in taking targeted measures to alleviate and eliminate poverty…" Li Jianguo, vice chairman of the Standing Committee of China's National People's Congress said in early March.
However, many poverty-stricken areas in China are inhabited by religious and ethnic minority groups, said Liu.
He noted that foreign organizations that have been trying to disturb social order in those regions using poverty elimination as an excuse will find their work more difficult under the MPS' supervision.
Organizations that conduct or finance activities that jeopardize national security will be dealt in accordance with law and may face criminal charges, according to Article 109 of the Charity Law.
In the future, specific regulations on the activities of foreign charities will be stipulated in China's first law on management of foreign NGOs, Liu noted.
Foreign NGOs and their representatives in China may be banned from raising money unless they are given permission by the State Council, and violators may be fined up to 200,000 yuan, according to the draft version of foreign NGO law.
The law is going through the public opinion solicitation process until June 4.
