Giving to China? Here's What You Should Know

Published October 22, 2009 @ 03:00PM PT

Planning on becoming involved in the philanthropic sector in China? Here are two things you should know before you start.

The National Intelligence Council's 2008 report states that "China is poised to have more impact on the world over the next 20 years than any other country". China's impressive rise on the world stage has created intense international interest, both politically and economically. This interest has only strengthened amidst the turmoil of the recent financial crisis: in 2008 alone, China received $82.7 billion in foreign direct investment, a 13.8% increase since 2006. It makes sense that many individuals and corporations with interests in China would also be interested in becoming involved in philanthropic work in China.  Becoming involved in philanthropy in China is, however, subject to many of the same issues and complexities that are faced by those seeking to make a profit there. Here are two key points that anyone hoping to work in the philanthropic sector in China should know:

Government relations are the key

While having a good relationship with the government is important for charitable organizations everywhere, in China it is absolutely vital. You cannot successfully operate in any way in China without the full approval of both central and local government officials. After the 2008 Wenchuan earthquake in Sichuan province, the non-government organizations that were able to have the greatest impact in the relief efforts were not the groups with the most international funding or the best organizations but rather those with the closest ties to government. This is a consequence not only of the stricter regulations in place in China relating to philanthropic activity and organizations, but also to the dominance of the Chinese government in the economy. While the private sector has grown significantly in China during the last 30 years of economic reform, the government continues to make up 60-70% of the whole economy. Even in the private sector, nearly a third of the funding comes from the government.

The Chinese government, in sum, not only exercises political dominance but economic dominance as well. Thus individuals or groups who fail to cultivate good relationships with government officials not only risk being shut down but also are losing access to the largest sector of the Chinese economy. It is also important to understand the surprisingly heterogeneous nature of the government in China. Policies and regulations may differ significantly from city to city, and may sometimes even be in conflict with policies of the central government. Be aware also of the potential ethical issues this point may raise, as gaining the confidence of some local officials may involve practices that are viewed as inappropriate by US standards.

Politics and philanthropy don't mix

It is vital for charitable organizations and individuals to have a thorough understanding of the political boundaries which exist in China. Failure to grasp the political realities can completely derail even the best intended programs.  Consider the example of a philanthropic group that wanted to hold an event to benefit children orphaned in the Sichuan earthquake. As well intentioned as the group was, they failed to consider that the involvement of a well-known personality who was critical of the Chinese government would make it difficult or even impossible for the money to be accepted in China. As a consequence, the group was unable to accomplish its goals.

The Chinese government places a premium on maintaining social harmony and invariably takes strong measures against that any organization or individual that seems to threaten that goal. Political matters to avoid include obvious issues like Tibetan, Taiwanese or Uyghur separatism or the 1989 Tiananmen protests but also may include seemingly innocuous issues like poverty or education. Philanthropic groups and individuals interested in working in China today should take great care not to be involved with any activities or individuals that even appear to threaten social order, the Chinese Communist Party's legitimacy, or have an adverse impact the influence of the government. It is just as important for philanthropic groups or individuals to gain the trust of local officials and show that that they plan on working as a complement, not a substitute, for government.

-Britton