China Wants to Make Charitable Giving Mandatory for All Income-Earning Citizens

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Image Source: Harald Groven / Creative Commons

 

The South China Morning Post reports that Chinese legislators have been considering making charitable giving mandatory for all citizens who earn an income:

[Zhou Sen], who is honorary vice-president of the state-backed China Charity Federation, wants to make it mandatory for all Chinese citizens to donate a portion of their earnings to charity, much as they are required to pay tax.

 

He proposed a charity bill during last year’s parliamentary sessions and has been advocating legislation for more than a decade.

 

[…]

 

The party’s 2014 annual work report said the central government would support the development of charity organisations and provide aid to the needy.

 

Major charity organisations want a law to clarify the legal status of these groups, establish transparent oversight mechanisms and call for efficient and accessible registration procedures.

However, even if the new law were to be approved, experts working in the Chinese social sector realize that it might not be well-received because of the differences in China’s philanthropic culture:

Zhou also said a bigger problem was the lack of a genuine culture of charity in China. “Investors even [use] charity [as a trading chip] with local governments to lure profits such as getting better lands and projects,” he said.

 

Chinese People’s Political Consultative Conference deputy Cui Yongyuan, a celebrity talk show host who runs the Cui Yongyuan Public Foundation, agreed that the country lacked a culture of giving compared to countries like Turkey, which has supportive communities dedicated to the homeless, for instance.

With India’s new CSR law and the possibility of China’s mandatory charitable giving law passing, it seems like Asian governments are taking an active role in pushing local philanthropy forward. But are such approaches effective? Does legislation help unlock the potential of philanthropy in Asia, or does it get in the way of philanthropy growing organically? Your thoughts on this, APF readers?

5 responses to “China Wants to Make Charitable Giving Mandatory for All Income-Earning Citizens”

  1. Rob John says:

    Mandatory donations – what an oxymoron! No one believes that creating a culture of giving is quick or easy, and will take many decades to embed generosity in a nation so new to civil society organisations and the responsibility of the individual. There are a lot of moving parts – transparency, accountability, impact reporting, professionalised NGOs, intermediaries, media…
    Once it enters peoples’ heads that giving is like a tax, there will be a whole mentality of avoidance. A cornerstone of charitable giving is that it is voluntary. Encourage people to give because they can see what it is spent on and what impact it has for society.

    • Anh Ton says:

      Thank you for your comment John! There is a big difference between incentivizing and mandating, which you’ve hit on. Seems like a good time to dig into research on mandatory donations for a future post!

      • Rob John says:

        Of course there’s mandatory giving policies for individuals, but also for corporations. Certainly a research interest of ours is the impact of India’s Company Act, which comes into force this month. It requires around 16,000 qualifying companies to donate 2% of pre tax profit to social causes – or explain why they don’t. That’s US$2.9 billion annually! Many companies will see it as effectively a hike of 2% on corporation tax and donate to large government sponsored social development programmes; others will see it as an opportunity to really stretch the impact of their CSR. It’s all unchartered waters. Slovakia did something similar in the 90’s but I recall it was not mandatory.

        • Anh Ton says:

          Yes, we’re eagerly waiting to see how the India’s Compact Act plays out too. To go back to individual giving for a moment, it’s also kind of interesting to think about religiously obligatory giving (like tithing, zakat, or even meritmaking) vs. state mandated giving. It’s definitely not an apples to apples to comparison–you don’t get penalized if you don’t give alms, so in that sense even a religious obligation is actually a voluntary act. But it’s still a good exercise to unpack all the reasons why one practice is embraced and the other is (almost) universally rejected.

  2. […] work officially, the government said it would also allow nonprofits to act as service providers and it has been sitting on an idea to make charitable giving mandatory for all income-earning citizens. So far, the government has also “invested around 400 million yuan ($64.5 million) to support 470 […]

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