Since then, the number of registered and non-registered NPOs (nonprofit organizations) has increased in China in the recent decade, and along with this growth, the philanthropic and policy environment has gradually changed. Such changes were the focus of the afternoon panel discussion at the Hauser Center for Nonprofit Organizations on September 30, 2009, moderated by Professor David Brown, Senior Fellow at the Hauser Center, which brought together main figures from different sectors of the Chinese philanthropic world: Zhuang, Professor Hanlong Lu from the Institute of Sociology at the Shanghai Academy of Social Sciences, an expert on social policy in China, and Zhaomin Jin, Executive Director of the NDC and previous Deputy Secretary General at Shanghai Charity Foundation, a government owned foundation.

Zhuang began the panel discussion with a brief introduction to the development and expansion of her NPO Development Center in Shanghai, emphasizing the importance of such NPO support organizations to help enhance the capacity and legitimacy of grassroots NPOs—an “NPO for NPOs” of sorts. Such capacity and legitimacy may be difficult for grassroots NPOs that often lack professional resources to achieve on their own, especially given the rising expectations for Chinese NPOs by the government, donors and beneficiaries.

According to Zhuang, the key points to cultivating NPO success are to provide a supportive policy environment, good promotion and advocacy on the part of the media, and access to services such as training, coaching and networking. NDC’s influence and strength grew rapidly by strategically levering such needs and creating its niche as one of the few capacity building organizations. In addition to coaching NPOs in important skills such as grant writing and strategic planning, NDC has also helped bring together and forge partnerships between NPOs and the local government. NDC has expanded its services to NPOs throughout China and has created constituents in different areas such as health, disability and the environment. 

Over the past five years, NDC has trained over 4,000 executives and managers in the nonprofit sector in China, and has provided consulting to over 100 NPOs and corporations.

However, like most other nonprofits in China, NDC still faces major challenges of sustaining funding and recruiting highly qualified professionals.

Professor Lu followed up Zhuang’s introduction to her own NPO with a broader discussion of the policy and attitude changes towards NPOs and philanthropy in China throughout the last few decades. 1989 was the baseline year for recognition of NPOs with the establishment of the “Management Regulations of Social Associations,” one of the first documents outlining the Chinese government’s policy towards NPOs. Another key year was 2002, when China officially entered the World Tread Organization. Finally, he pointed to the 2008 earthquake in Sichuan that saw thousands of volunteers and donors gathering to help the victims, and the 2008 Beijing Olympic Games, which also inspired thousands of volunteers to action, as the most prominent signs of the emerging importance of philanthropy in China.

Lu divided Chinese social organizations into three categories: social organizations (such as the Chinese Handicapped Organization), civic non-profit enterprises (such as the NDC), and foundations. Between 1999 and 2008, the total number of social organizations in China increased by an astounding 290%, from 142,665 to 413,660.

Despite this increasing presence of social organizations, however, the official registration process continues to be restrictive. Registration requires the approval (or sponsorship) of a government agency at the county level or above. To prevent unnecessary competition, there can only be one of each type of organization in a given district.

Recent changes see, however, some regional government directing more resources towards NPOs; with greater provision of funding and even free NPO office space, the government is starting to include the development of the nonprofit sector into its long-term strategic plan.

Zhaomin Jin concluded the presentation portion with a brief overview of the current status of foundations in China, coming from her own previous experience of working at the Shanghai Charity Foundation. She noted that philanthropic donations in China are very unevenly distributed:  the top six foundations out of close to 1,600 foundations in China had collected 700 million dollars in donations out of the 1,200 million dollars collected by foundations in total last year. Furthermore, about 90% of all donations were received by “GONGOs”—governmental-operated NGOs—such as the Olympic Games Committee and the China Charity Federation.

According to Jin, most foundations in China run their own relief programs (operational foundations, rather than distributing grants to other nonprofits); for example, the Shanghai Charity Foundation operates nineteen branches throughout China and mostly allocates its funds to those programs. Even if funding is provided to other relief programs, very limited support is given to NPO support organizations like the NDC. However, recently, more and more foundations are moving towards becoming grant-making foundations, with Red Cross and Shanghai Charity Foundation giving out 8 million dollars for grassroots NPO programs last year.

When asked what they think will happen in the next ten years, all three speakers were hopeful about the increasing dialogue between the government and NPO sector and the gradual transition to a more enabling legal environment. Considering the immense rise of awareness of NPOs by the general public, especially following the 2008 Sichuan earthquake public relief efforts, the role of NPOs in Chinese society seems poised to increase.

Zhuang’s analogy of the philanthropic environment in China as a stage perfectly summarizes this optimism: “Currently, the government is the main actor on the stage; nonprofits are the ‘side figures’ running behind the stage. They’re there, but it’s hard to know what they’re doing or how they’re doing it. Eventually, the threshold to get on the stage will be lower; NPOs can then join the government on the main stage for equal assessment by all.”

(Written by Yongtian Tina Tan of Harvard University)