June 2005

The new "Regulations on Foundation Management" (hereinafter referred to as "Regulations") came into effect in June, which solved several "bottlenecks" in the development of public offering foundations, such as clarifying the proportion and sources of staff salaries and benefits and administrative office funds, and canceling the restrictive provisions on the legal ways and means of maintaining and increasing assets.

At present, there are 1200 foundations in China. These foundations are basically "government-run". In the past, only the government or other authorized departments thought of setting up a "non-governmental organization" would they apply to the civil affairs department; It is difficult for grassroots organizations founded by non-governmental people to find government departments to be "mother-in-law". For example, the excellent non-governmental environmental protection organization "Global Village" and the information consultation center of non-profit organizations, which are committed to the capacity building of non-profit organizations, are all enterprises registered in the industrial and commercial departments. In China, it is these organizations and enterprises that have made the greatest contribution to Project Hope.

In the past, it was not illegal for some government departments not to approve civil organizations; Now it's time to set up a non-public offering foundation: private enterprises have considerable control over corporate funds and are eager to express their social responsibilities and improve their social visibility through dedication. Some also want to participate in the management of social affairs through private foundations. The promulgation of the Regulations on the Management of Foundations will ignite the desire of more people to participate in charity.

The new "Regulations" encourage private individuals to set up foundations, and guide citizens, especially those who get rich first, to donate part of their property voluntarily for public welfare undertakings such as poverty alleviation, teaching, environmental protection, community building, AIDS prevention and treatment, and protection of vulnerable groups, thus opening a channel for the "private sector" to participate in public services. In the past, citizens also donated money to public welfare undertakings and were the targets of mobilization; Now, citizens can establish their own non-profit legal institutions, engage in public welfare undertakings and cooperate with the government to solve some social problems. Therefore, the emergence of non-public offering foundations has promoted the participation of the "private sphere" in the "public sphere" and the interaction between the people and the government. This is a huge leap.

As far as we know, there are more than 56,000 foundations in the United States, with total assets of nearly 500 billion US dollars (1 US dollar is about RMB 8.2 yuan), of which independent private foundations account for about 85% and enterprise foundations account for about 5%, both of which account for more than 90% in number and total assets, and both belong to the category of "non-public offering foundations"; The sum of the total number and assets of community foundations and operating foundations that raise funds for the public is less than 10%. There is no doubt that private foundations occupy an absolute dominant position in the United States, and almost all large foundations are private foundations.

Can it be inferred that the most powerful foundation in China in the future will also be a private non-public offering foundation? The situation in China is that there are more than 2 million private enterprises, one thousandth of which is 2,000. However, the capital threshold for the establishment is not high, and it is easy for a slightly larger enterprise to do so. Therefore, I believe that in a short period of time, we can see the emergence of a large number of non-public foundations, and the resulting prosperity of China foundation and the vigorous development of non-governmental public welfare undertakings.

However, for a long time, the development of non-governmental organizations in China has not been smooth. Non-governmental public welfare organizations carry out activities in many fields, such as environmental protection, community building, elderly care, children's education, protection of women's rights and interests, protection of the disabled, and training of non-profit organizations. Some organizations have achieved fruitful results and received high praise. However, almost none of them are non-profit organizations, some are registered in the industrial and commercial departments, and some just act on personal credit.

The implementation of the new "Regulations" ushered in the spring of non-public offering foundations. Grassroots organizations can bid farewell to yesterday's history and choose the right path. I think there are two ways to develop non-public offering foundations. First raise 2 million yuan to "build a car on the road". The establishment of a non-public offering foundation has less intervention and is conducive to maintaining the independence of the institution; If it is difficult to raise funds independently, you might as well lobby rich people or enterprises to accept your public welfare ideas and projects and set up a foundation to "borrow cars and roads". No matter which way is adopted, it must be approved and registered in accordance with the legal procedures of the new regulations, managed according to law, and let the brands of non-profit organizations do public welfare things. Second, although funds cannot be raised from the public, donations can be accepted and income is not taxed; Third, in accordance with the legal norms of the foundation, clarify property rights and make financial and project operations more open and transparent.