Watchdog weeds out online charity scams

China's top charity watchdog has pledged credit stains for charities that breach rules concerning online fundraising and warned against turning the activity into unregulated "online begging".

Ma Xin, director of charity administration for the National Bureau for Social Organization Management, revealed the new measures in an exclusive interview in response to an online fundraising scandal last month.

The director said the measure supplements the Charity Law in punishing offenses concerning online charities and has a longer effect than the penalties prescribed in the law. "Charities will have notations on their credit record and face joint punishments including higher taxation or exclusion from government contracts," she said.

According to the law, which went into effect in 2016, charities with licenses to raise money from the public are only allowed to run online programs on websites designated by the Ministry of Civil Affairs. The ministry designated 12 websites in 2016－including Tencent Charity. The list is set to expand this year.

According to the Charity Law, charities will receive warnings and be told to straighten things out within a specified time if they raise funds on websites other than the 12 that are authorized.

Li Yinglu, a researcher at China Philanthropy Research Institute affiliated with Beijing Normal University, said that since the detailed rules regarding the credit system are yet to be released, the actual effect of the crackdown still remains to be seen.

An online fundraising scandal in December raised the public's suspicion about the credibility of charity programs in the Internet Plus era.

A fundraising project, which purportedly matched donors with poor children born on the donor's birthday, began appearing on WeChat on Dec 22 and gained widespread attention. The program was launched by Shenzhen-based Aiyou Future Foundation on the poverty alleviation website.

However, some netizens soon found that pictures of some youngsters in need appeared in multiple profiles, and many suspected the program was a fraud. The website was not among the 12 designated ones.

The civil affairs bureau in Shenzhen, Guangdong province, launched an investigation into the program.

Ma, of the charity administration, said it is "technically implausible" to detect in real time whether fundraising programs are on illegal websites, but her agency is working on the problem.

She said China has seen an increase in the number of individual donors as mobile internet and online payments have made donating as easy as a "click on the screen".

According to Ma's agency, more than 1 billion yuan ($155.2 million) in donations have been made online since the Charity Law went into effect in 2016. A program run by Tencent raised 950 million yuan since then, with more than 45 million people participating.

Li Jing, secretary-general of One Foundation, a charity eligible for public fundraising, summarized the essence of the Charity Law as transparency and competition, which are the keys to a charity's healthy and orderly development.

"All charities should stick to the rules of information disclosure and contribute to building a good environment," he said.