Chinese foundations lack transparency, index shows

Foundations on the Chinese mainland are not transparent enough, according to the Foundation Transparency Index 2018 released on Thursday.

The Index — a quota devised by the China Foundation Center and Tsinghua University in 2012 to measure an organization's performance in disclosing information to the public — shows that 4,960 Chinese foundations included in the index scored an average of 33.5 out of 100 last year, a situation that experts call "unsatisfactory".

As the number of Chinese foundations, and the assets they hold, has increased dramatically in the past few years, Cheng Wenhao, a public administration professor at Tsinghua University, said they should be more transparent, as they are legally bound to be.

"But the score shows that Chinese foundations have not passed the 'transparency test' and there's a long way to go," he said. 

The index allocates each foundation a score based on the amount of information provided, the platform it is disclosed on and how complete the information is.

Information is allocated a different weight, depending on the importance and the degree of attention it receives from the public. Thus, a charity program's revenue and expenditure carries more weight than basic information such as its contact details and the number of staff members.

In addition, information disclosed through its own website receives a higher score than that on the other platforms.

In the 2018 index, Beijing-based foundations scored an average of 57.8, holding the first place for the second consecutive year. Shanghai was second on the list and Guizhou third.

The index also shows that provinces with strong economies — such as Jiangsu and Fujian — fall at the bottom of the list, whereas Guizhou has made great progress in the past few years.

Cheng said this shows that the management of local authority plays an important role.

"Guizhou does not excel in information disclosure facilities compared with Jiangsu. The attitude of local civil affairs authorities matters," he said.

Deng Guohua, deputy director of the Institute for Philanthropy affiliated to Tsinghua University, said although the score is unsatisfactory, the index shows that people in China's philanthropy circles have reached a consensus on transparency. 

"Few other countries have a transparency index for foundations such as China," he said.