Philanthropy or tax evasion?

Background: Philanthropic groups in China

Philanthropy is becoming more important to Chinese people. A new study shows people and businesses are beginning to show their potential for benevolence.

According to a study by the Chinese Academy of Social Sciences, domestic charities raised 103.7 billion yuan in 2008, more than three times the amount the previous year. The study says that for the first time, individuals gave more than businesses.

There are three main philanthropic groups. First are the state-owned or government-related charities: these institutions are often seen as slow and inefficient.

The second group consists of private international and local groups approved by the state. These so-called NGOs are very difficult to establish because of the complicated application process and long wait for approval from authorities. On top of this, the group must be sponsored by a government department.

Last are the 300,000 small organizations and 650 private foundations in the country, a figure provided by Xinhua news agency says. Most of them are either supported by a business or are not officially registered. Chen’s foundation belongs to this group.