Sep 15 2009
and people wonder why NGOs don’t thrive in china?
Read this interesting article in the Asia Times ( h/t CDT) that documents the amount of public donations from the Sichuan earthquake which were funneled to the government and not toward the NGOs that are actually on the ground doing the work. What is outrageous is that its a majority of those funds that found their way to the government. Which is again, an indictment of government control over NGOs. (not to mention GONGOs, which I still find to be an oxymoron if I ever heard one)
The article and actual figures after the jump.
Here are the statistics:
According to Deng’s study, by November 2008, public donations to help disaster relief in the aftermath of the Sichuan earthquake in May last year, many made through NGOs, totaled some 65.252 billion yuan (US$9.5 billion) – excluding donations in kind. However, about 58% of the total (37.9 billion yuan) went to various government agencies, 36% went to government-designated Red Cross organizations, charities and foundations and only 5.9% ended up with local foundations less affiliated to the government.
(emphasis added) And of course, if you remember correctly, many people criticized the local Red Cross organizations as being corrupt and/or government instruments to receive funds from kind hearted, but unsuspecting altruists. The facts speak for themselves:
Deng found that part of the 36% that went to government-designated organizations in fact eventually went to government departments. Some specifically-designated donations were even ultimately channeled to government units for “the purpose of overall planning”. Altogether, according to the report, more than 80% of total relief donations ultimately ended up in government accounts.
(emphasis added). So 80% of all funds designated toward the quake made their way to the government ultimately. Just how independent are these Red Cross groups and other so-called NGOs?
In China, according to the “Regulations on the Registration and Management of Social Organizations” promulgated in 1998, in order to acquire full legal recognition, an NGO has to register itself both with the Ministry of Civil Affairs (or its local branches), and with a relevant government or party department to oversee its business and operation. According to statistics from the Ministry of Civil Affairs, there were 230,000 such registered “social organizations” across the country at the end of 2008. In fact some scholars suggest the term “government organized non-governmental organization (GONGO)” would be more appropriate to describe the real nature of such Chinese NGOs.
So we are stuck in a world of GONGOs and then small, nimble NGOs that can barely even get themselves registered:
In reality, the registration of most organizations, due to their small size or other reasons, is rejected by relevant supervising departments. Unable to acquire a legal identity, such organizations have to then register as a company or simply start work without registering at all. Some studies show that formally registered NGOs account for only 10% of the total in operation and that the other 90% are either registered as companies or have no registration. For those registered as companies, taxes and fees are very likely to put the already cash-strapped organizations out of business. As regards the latter, without any official label, they have great difficulty in attracting serious funds. Even worse, they could be busted at any time.
I point this out because TechSoup Global has employees and partners who are dying to help the Chinese NGO sector get built up. Some here are actually very passionate about the nation. But it’s stuff like this which makes donors, supporters, and funders wary of ever starting a TechSoup program in China. And that just breaks my heart because even a single well equipped PC can make a world of difference to an NGO in China. (see this earlier post about John Fung’s presentation that I entitled, “ the power of one computer for a chinese NGO“)
The article says this about the situation:
Without doubt, from the very beginning, NGOs in China have been crippled by policy and legal restrictions. The ruling party is determined to keep tight control on NGOs in the country over political concerns, regardless of their nature or cause. At operational level, government departments and officials are not willing to give their “power” or “authority” away to NGOs.
Sad indeed.
NGO’s in order to raise money in China should get a WFOE license and pay tax on their income just like a regular business. Thats also to prevent the unscrupulous registering via Hong Kong and getting non-tax status for what are really businesses.
If you want to donate in China do it through registered charities like Care for Children. The truth is, there are options.
Thomas.
While I am not in disagreement that there are innefficiencies, I think the general analysis that is being done on this study is off the mark, and the study itself is partly to blame for that.
First, you need to remember that it was the military and civil affairs bureaus in concert with the Red Cross who were managing the situation on the ground in the early days. They were the ones buying food, water, and shelter for the millions left homeless.
NGO involvement at that time was limited not only in scale becuse of regulations, but because many organizations just did not have the organizational depth to do much more than focus on a very defined group and work with them. Many groups were fly by night, and funding was thin.. so, many eventually closed.
Now, I am not saying that closes the gap, but it provides some context.
Second, this report fails to take into account, or at least try to explain, the large amount of money that has gone into infrastructure projects (roads and bridges), to build schools, etc that are all largely being funded by the government.
Why are they in the best position to do this? Again, no one else would have the scale or capabilities to do it even if the government opened the door… Habitat’s footprint is 150 homes and that maxed them out.
Finally, with regard to the GONGOs and their role. There are roughly 20 of them by name in China (China charity foundation, Red Cross, etc) who have local branches. In large part, they are directed by policy and charter to perform certain tasks, and while the independence of these organizations is sometimes in question.. few can question their reach. They really are the ONLY vehicle for NGOs to operate in if they would like to scale, and some of these organizations have developed strong capabilities that should be supported by niche groups.
These groups have changed significantly over the last few years, for the better, and while one could certainly find a group operating more efficiently on a local basis, you would be hard pressed to convince me of a single independent group who could operate on the same scale and depth.
AT the end of the day, and wrapping up my post, there is a clear case for where improvements can be made (a point you make – and a point well taken), however it needs to be understood that there are cases / benefits for GONGOs.. at the same time, while my focus above was primarily of the weaknesses of independent NGOs, there are groups who are developing networks in different areas of China, and are doing so with the consent of the Chinese government and GONGOs.
If you, or others in your org, want to learn more (or want to find a partner), please let me know how I can assist. Your comments, all of them, are ones that I think are valid, but need the right context to be fuly understood, but the issues themselves should not keep you (or your firm) from working in China.
r
http://www.china-crossroads.com
http://www.cleanergreenerchina.com
http://www.handsonshanghai.org
[...] are not. Meaning your donation to the Sichuan earthquake victims actually went to the CCP. Highlights here, and the original article here (h/t to China [...]
Thanks for the context Rich, it is much appreciated since you’re more on the ground there than I am!
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