Players crying "foul"
Nonetheless, 15 months since the devastating earthquake in Sichuan, research led by the NGO Research Center at Tsinghua University found that of the 76.7 billion yuan (11.28 billion dollars) in money and goods raised by the public, over 80 percent were injected into the government finance basket as "extra tax revenue" and used for quake relief.
A break-down showed that 58.1 percent of the money raised had gone to government departments, 36 percent to the officially-designated Red Cross Society of China and China Charity Federation, leaving a mere 5.9 percent for public foundations.
Wang Zhenyao, director of the Social Welfare and Charity Promotion Department, the Ministry of Civil Affairs, referred this as "an embarrassment."
"Some NGOs do not have the credibility or a clear feedback that the public requires for charity. Therefore donors do not trust them with their money and the money or goods raised have instead gone to the government," he explained.
Liu Hung To from Oxfam HK who has been working at charity agencies for 11 years, strongly opposes this role mix-up.
"The government should perform the role of referee, not athlete.
No government should raise money from its citizens. It is the government's obligation to encourage private and corporate donations for charity through favorable tax policies while buying with public expenditure services from NGOs in areas it cannot possibly attend to," said Liu.
It has been a matter of pure Chinese characteristics that all foundations, public or otherwise, should be attached to a government department. NGOs, which fall into the category of social organizations, need to have 100,000 yuan (14,705 dollars) in capital and at least two full-time staff as well as an office, to be registered in China.
As most grassroots NGOs are not able to find any government organizations to affiliate with, they end up registering as enterprises at local administrations of industry and commerce, with no tax relief or breaks.
This lack of legitimacy for charities has resulted in a resource dilemma. Big foundations, rich in funds, collaborate with government departments, which in turn provide matching funds. So the government departments don't feel the need or the desire to work with grassroots NGOs.
"It is no wonder grassroots NGOs don't grow," says Xu Yongguang, calling it a "vicious circle".
Statistics from the Ministry of Civil Affairs and Tsinghua University show that in 2007, non-profit organizations in China only share a 0.3 percent of added value from the tertiary sector. Likewise, its employment rate was a pitiful 0.3 percent of the whole service sector, only one-thirtieth of the world's average.
Xu urged the government to release public services from its hold and start nurturing the tertiary sector so that NGOs could employ more people while contributing to society.
