Trust crisis leads to donation drops in Chinese charities

About 81.7 billion yuan ($13.35 billion) in donated money and goods were collected in China in 2012, a decrease of 3.31 percent from 2011, a new report says.

The report, released Saturday by the China Charity and Donation Information Center, says the annual decline is the second in a row in an already limited scale of philanthropy in China, according to an editorial in Xi'an Evening News. (Excerpts below)

The report shows that total donations in 2012 amounted to only 0.16 percent of China's GDP, while in the US, $316.2 billion in donations was raised in 2012, or about 2 percent of US’ GDP.

One major reason for the decline of donations in China is the loss of public trust in the countries' charity sectors. The reputations of charity organizations, especially the Red Cross Society of China, have been severely tarnished since 2011 because of a spate of embezzlement scandals.

According to the report, the Red Cross Society of China received total social donations of about 2.87 billion yuan, down nearly 60 percent from the previous year; in 2012, it received 2.19 billion yuan in donations, down 23.68 percent from 2011.

The opaque operations of donations and the nontransparent governance within charity organizations have led to a public crisis of trust.

Moreover, it is the defective institutionalized mechanism of most Chinese charity groups that leads to the public's distrust. Specifically, it has been noted that there is too much red tape and bureaucracy within most quasi-government charity organizations and societies. Those highly administrative systems have hampered public trust in philanthropy.

A fundamental way to change the situation of decreasing public donations is to carry out thorough reforms in charity organizations in order to win people's trust. Problems such as the nontransparent donation uses and bureaucratic governance must be corrected.