initiative on philanthropy in chinaand social transitions continue, the landscape of civil society...

Do not quote or cite without author's permission

Initiative on Philanthropy in China

Accountability of Civic Philanthropy Organizations in China: Findings from a National Survey

by

Zhu Jiangang

Director, Institute for Civil Society Sun Yat-sen University

Hu Xiaojun

Research Fellow, Institute for Civil Society Sun Yat-sen Univesrity

Liu Yifei

Research Fellow, Institute for Civil Society Sun Yat-sen University

China Philanthropy Summit Research Center for Chinese Politics & Business and Lilly Family School of Philanthropy

Indiana University Indianapolis, Indiana

October 31-November 1, 2014 © Indiana University Research Center for Chinese Politics & Business and the Lilly Family School of Philanthropy

1

Accountability of Civic Philanthropy Organizations in

China: Findings from a National Survey1

Zhu Jiangang, Hu Xiaojun, and Liu Yifei

Background

Since the Chinese reform and opening-up of the economy, one of the most

remarkable changes in the country is the appearance of a growing group of NGOs and

the increasing expansion of their influence. Despite the rapid growth of NGOs, a large

number of studies indicate that the overall institutional environment generally

constrains their development, particularly those with grassroots backgrounds2. Such

constraints are mainly manifested by the inadequate legitimacy of grassroots NGOs

and limited space for their activities (Gao, 2000; Xie, 2004; Zhu, 2004; Deng, 2004).

Corresponding to this restrictive macro environment, many scholars have focused

their inquiries on the specific action strategies taken by Chinese NGOs seeking to

mobilize social resources while avoiding political risk (Zhao, 2004; Wu, 2005; Yang

1 This is a conference paper, please do not cite 2 For example, the “dual management mechanism (shuangcong guanli tizhi)” for social organizations is 2 For example, the “dual management mechanism (shuangcong guanli tizhi)” for social organizations is considered the social system that most constrains the independent development of NGOs. If an NGO cannot find a competent governmental agency that takes charge of the NGO’s business, the NGO cannot successfully complete its registration and hence cannot obtain a legal identity. However, an NGO often needs certain network of governmental relations to help it find such competent governmental agency, while it is almost impossible for numerous grassroots NGOs to set up such a network. Besides, the government has applied the “non-competing” principle in respect of the development of social organizations, i.e., only one social organization of the same nature is allowed in one region. Without doubt, such a practice has greatly eliminated the development opportunities of more social organizations. If the effect of the above-mentioned constraint mechanism is gradually waning in certain regions as boosted by innovative development in social construction and social management, the constraint of this mechanism to NGOs’ activities can hardly be eliminated in the short run. The social organizations recognized and actively promoted by the government are limited to those that can provide supporting social services to help the government provide social and public services and those engaging in public charitable activities. In contrast, the government still adopts certain suppressing attitude to the social organizations featuring certain political sensitivity, such as the ones protecting labor rights or human rights.

2

2005; Zhang, et al., 2008; He, et al., 2009; Tang, et al., 2011; Chen, 2011). This is one

of the reasons that philanthropy has become the main field of congregation of NGOs

in China. It is relatively easy to obtain legitimacy and mobilize social resources as a

philanthropy NGO.

Philanthropy in China has also experienced remarkable change in the 21st century:

Communism philanthropy mobilized and organized by the government has been

reformed and civic philanthropy emerged from the bottom up (Zhu, 2014). In contrast

to the planning philanthropy systematically controlled by the government, civic

philanthropy emphasizes the citizen’s “voluntary actions for public good” (Payton,

1988). Spontaneous, autonomous and voluntary actions and organizations occupy a

large portion of this field. This research aims to explore civic NGOs in China’s

philanthropy field. We categorize them as Civic Philanthropy Organizations (CPO,

minjian gongyi zuzhi, 民间公益组织 ). Under China’s restrictive political

environment, how do these NGOs obtain legitimacy and gain independence? As they

build their professional efficiency and transparency, to what extent are they accepted

by the public? This research seeks to determine and describe the accountability of

grassroots NGOs in China, a rarely discussed topic in the field of research on China’s

NGOs.

Defining Civic Philanthropy Organizations

For the sake of further discussion on the accountability of civic philanthropy

organizations, it is necessary to first clarify our definition of them. It is closely related

to the theory of civil society and the concept of NGOs. As economic marketization

3

and social transitions continue, the landscape of civil society under authoritarian rule

has changed incrementally. Following the vogue of the notion of “civil society” in

both the academic and practical worlds in the 1990s, scholars have commented on the

major approaches in the study of civil society activism in authoritative regimes.

In the Western world, there are numerous definitions of civil society, partially

due to its popularity in recent years. The following three categorical definitions of

civil society are among the ones most often adapted. Most scholars describe the

development of civil society as “the capacity of an organized society to create a zone

that stands apart from the state and that serves potentially as a bulwark against

expansions of state power” (Unger, 2008, p.2). This overemphasizes the confrontation

between civil society and state. Hegelian scholars tend to blur the boundary between

civil society and market economy when discussing its definition, suggesting that civil

society is a power that protects free market against state intervention (Cohen & Arato,

1992). Tocquevillian and Gramscian scholars focus more on the autonomous

organizations in civil society, making it possible to discuss it in various regimes.

However, this definition tends to limit civil society to membership-based associations

(Cohen & Arato, 1992).

In order to better serve the purpose of examining civic philanthropy organizations

in China, a more inclusive and value neutral definition is needed. Hence, we adopt E

Dunn’s definition, that “civil society is broadly regarded as the domain of

relationships which falls between the private realm of the family on the one hand and

the state on the other”, (Hann & Dunn, 1996, p.27) as the foundation of our

4

theoretical framework. This definition, though simple, provides a more inclusive

framework without presupposed “goodness” or “evilness” of civil society, making it

possible to avoid choosing either the pro-democratization or the pro-corporatism

approach and to conduct the analysis more objectively.

The definition of NGO must also be clarified in order to better understand the

role of NGOs in authoritarian China. In the Chinese context, the definition of NGO is

extended to a large part of the government-organized organizations (GONGOs) and

International NGOs (INGO) in China. Grassroots civil society organizations are

different than GONGOs and INGOs. A large proportion of Chinese civil society

organizations do not obtain legal status as nonprofit organizations due to political and

legal reasons, even though they fit Salamon and Anheier’s definition of an NGO as

“organized, private, non profit distributing, self-governing, and voluntary” (1997).

Thus, it is problematic to only include NGOs with legal status when exploring this

topic in the Chinese context. Instead, all formal and informal private, independent

organizations that show the characteristics of Salamon and Anheier’s definition

should be considered as NGOs unless abundant evidence suggests otherwise.

Based on the above definitions, this research focuses mainly on civil society

organizations in the field of philanthropy. Our research will define them as Civic

Philanthropy Organizations. Firstly, these CPOs fulfill Salamon and Anheier’s

definition: spontaneous, autonomous, not for profit and led by a voluntary board.

Secondly, they clearly self-limit their activities within the philanthropy field and

attentively keep their distance from political issues Thirdly, they are continuously

5

reorganized overtime. Without clear regulations in China defining NGOs, many

organizations are actually just empty shells, without any actual activity. Some

organizations exist for only one year, disappearing quickly due to lack of financial

resources. This research, based on former study of grassroots NGOs, provides the

operational definition of CPO as the following: 1) grassroots NGOs with an

autonomous, independent and voluntarily board; 2) limited to the field of philanthropy,

including charity, environmental protection, community development, disaster relief,

cultural reservation, labor rights and so on, but excluding political issues; 3) having a

regular project and team, which continues to work for longer than two years.

Literature review

The study of grassroots NGOs and activism in civil society is strongly connected

to research of CPOs. From the early 1990s, the burgeoning development of Chinese

NGOs also attracted extensive attention from the academic community. The

democratization approach and the corporatist approach are principal theoretical

perspectives in analyzing civil society in China (White, 1993; Howell, 1995; Kang,

1999; Saich, 2000; Wang, 2007, 2010; Foster, 2002; Deng, 2003, 2010; Morton, 2005;

Ma, 2006; Spires, 2011). However, from the 1990s to the present, grassroots NGOs

and civic philanthropy organizations especially have changed or developed rapidly in

comparison to their counterparts of two decades ago. Both of the above theories are

insufficient in their explanation of the current situation. Scholars have thus begun to

provide a more nuanced analytical model to explain the complexity of grassroots

NGOs’ role in authoritarian China (Ho & Edmonds, 2008; Spires, 2011; Hildebrandt,

6

2013).

In the early debate in the mid-1990s on the relationship between civil society and

the state, Ding proposed an innovative explanation of Chinese state-society relations

with his conception of “institutional amphibiousness”. Ding argues that the dichotomy

between civil society and the state in the framework of analysis is only appropriate in

some extreme cases and that it is problematic to generalize this framework to all

transitional authoritarian states. After conducting a thorough analysis of the China in

the 1990s, Ding summarizes the defining components of civil society as “civility,

association, autonomy and openness” (Ding, 1994, p.296) and argues with an

observation of China that “to apply the concept to circumstances where these

elements are scarcely present involves, to borrow a witty phrase, ‘excessive

conceptual stretching’.” (Ding, 1994, p.296). Thus, Ding presents institutional

amphibiousness as an alternative, or at least supplemental, conceptualization for the

analyses of countries “where state-society relations are highly interpenetrated and

interwoven” (Ding, 1994, p.318). He argues that institutional amphibiousness is

distinct in late communist totalitarian states in Eastern Europe, but still not obviously

present in China. Thus, a dramatic political transition is not likely to take place in the

very near future.

In observation of China in the past three decades, the continuation of the strength

and resiliency of the authoritarian state as civil society activism expands forces

scholars to find explanations for this puzzle. Ho and Edmonds (2008) propose an

explanation of “embedded activism” for this apparent paradox. Ho and Edmonds

7

acknowledge the growing size of a relatively active civil society in China, while

emphasizing that the resilient one-party state incorporates and constrains NGOs. They

focus on the “negotiated symbiosis” between NGOs and the state, arguing that NGOs

in authoritarian regimes are inevitably embedded in the “semi-authoritarian context”.

In their edited book, I also used a case study to show the process of authenticating the

law and reason in a homeowner right-defending movement (Zhu 2008).

The “embedded activism” is echoed by two very recent studies based on in-depth

field research with a focus on CPOs. Anthony Spires concludes from his empirical

research that the state will tolerate the existence and operation of illegal grassroots

organizations “as long as those organizations’ good works can be appropriated by

officials and contribute positively to their annual performance reports” (Spires, 2011,

p.36), while “suppression always remains an option for officials who deem it prudent”

(Spires, 2011, p.36). Hildebrandt goes even further than Spires, arguing that the

adaptation of NGOs actually strengthens their amphibiousness, diminishing the

possibility of the emergence of an independent civil society within the authoritarian

state, rather than vice versa (Hildebrandt, 2013).

The notion of “embedded activism” contributes to the literature on China’s civil

society significantly by proposing a plausible explanation to simultaneous existence

of a resilient one-party authoritarian regime and a booming civil society that neither

the democratization approach nor the corporatism approach can accurately explain.

However, “embedded activism” overlooks the innovation and potential of NGOs in

China and overemphasizes the control of the state on NGOs. As Wu points out this

8

approach is “one-sided to argue that the activists and NGOs thrive on the sympathy

and consent of the state, rather than by their own innovations, the legitimacy they

have earned from the communities they serve, and other opportunities they obtained

independently” (Wu, 2013, p.92). In order to survive and develop, grassroots NGOs

and activists adopt many innovative ways to obtain legitimacy and acceptance from

the society. Accountability is important in this trend.

This research will follow the third approach to describe and explain the

accountability of Civic Philanthropy Organizations. The issue of accountability has

been a hot topic in the field of philanthropy in China since 2011. As Han (2009)

points out, the accountability of CPOs is very different than that of governmental

philanthropy organizations in their rights and duties under Chinese law. For CPOs，

accountability includes not only information disclosure and financial transparency,

but also how the institution balances “the multiple-obligations among different

stakeholders” (Jordan & Van Tuijl, 2008).

Slim（2008）regards accountability as a process, in which NGOs should be

responsible for their value and what they have done. NGO should allow the related

people and institutions access to this information. Kovach (2008) focused on NGOs’

activities and their impacts on the different stakeholders. One World Trust, in its

Global Accountability Project, defines accountability as the balance and response of

an organization to the need of stakeholders to fulfill this obligation (Blagescu et al.,

2005).

The stakeholder theory shows that accountability is actually the relationship of an

9

organization with its different stakeholders. This relationship is also embedded in the

political and cultural context. It includes the accountability of the organization and its

stakeholders in addition to accountability to mission (Jordan & Van Tuijl, 2008).

Michael Edward and David Hulme (1996) divide accountability as upward

accountability, downward accountability and interior accountability. Transparency,

legitimacy and efficiency are also primary dimensions (Songco, 2006); GAP adds

participation, evaluation and the existence of complaint and response systems

(Blagescu et al., 2005).

This research uses “governance”、“legitimacy”、“transparency” and “efficiency”

for the framework of accountability, as they are the most important dimensions for

civic philanthropy organizations.

Table 1: Dimensions of CPOs’ in China

Dimension Description

Governance Board is the crucial element of governance; this research will investigate the function and impact of the constituent on NGOs

Legitimacy Legitimacy refers to the acceptance and recognition of the organization by the government. This research will study the status of registration

Transparency Transparency refers to the extent of information disclosure. This research will focus on financial management and public disclosure of financial information

Efficiency This research focuses on the human resources of NGO and participation of the target that is to be served.

Research methods

This study will use two main datasets launched by the Research School of

Philanthropy at Sun Yet-sen University (SOP) in recent years. The first one is data

from a national survey of Civic Philanthropy Organizations in 2011. The second one

10

is newer data collected from the Chinese Civic Philanthropy Organization Database

launched in 2013. A brief introduction of these two datasets follows.

The National Civic Philanthropy Organization Survey 2011

Until now, there has not been an authoritative and widely-accepted directory that

can comprehensively and accurately reflect the distribution of all CPOs in China. In

2011 SOP launched a national survey in order to collect a series of specific

information on CPOs in mainland China. 3 The range of this survey includes the

CPOs’ basic characteristics, history, governance, human resources, funding, financial

management, projects, information publishing and so on.

We accessed our sample through these channels:

A. Support from regional NGOs

B. Influential grant-making foundations and international NGOs.

C. The most influential websites in the philanthropy field of China.

D. Special websites set up by NGOs in the same field.

E. Information on NGOs collected by SOP in previous research.

F. Information of NGOs on websites aimed at NGOs activities.

G. Information of NGOs collected by members of SOP when attending seminars,

forums, salons and other related activities.

H. Official websites of the government departments related to NGOs.

3 There are diverse forms of CPOs, for example, association, private non-enterprise organization, industry and commerce registration. In addition, numerous CPOs do not have a legal status or only attach to another organization, this kind of CPOs’ information is hard to collect. So, it is difficult to build up a comprehensive sampling frame that covers all the CPOs in China and execute a standard random sampling process. It is a common problem among domestic surveys about CPOs. So, the sampling of this survey is a non-probability sampling, and it can be seen as a kind of exploratory study.

11

The respondents in this survey are CPOs in mainland China. We define them as:

A. Established in mainland China, not including Hong Kong, Macau, Taiwan or overseas.

B. Independent organizations established by nongovernmental individuals or groups. (Student organizations are not included because of their affinity to the school)

C. Devoted to philanthropy, including both commonweal (helping the public) and mutual benefit (helping each other within the organization), rather than profit-seeking.

D. Both registered and unregistered, whatever the registered property is (foundations are not included).

E. Working in the field of philanthropy. F. With a certain organizational structure and system (QQ groups are not

included).

Through the channels and standards above, we have developed a sample of 1,144

CPOs. This was our sampling process:

A. Based on the definition standard on Statistical Yearbook of China 2011, we

divided the organizations in the sample into 4 regions: east, central, west and

northeast, according to the provinces (or municipalities) they come from.

B. Placed the CPOs within each province in chronological order.. Those without a

definitive time of establishment are placed at the end of the list.

C. Conducted systematic sampling in different proportions, according to the

conditions of organizations in different regions. In total the scale of sample is 594.

D. The survey was conducted through face-to-face and telephone interviews,

electronic questionnaires, and other methods. Finally, we sent out 594 questionnaires

and received 461 completed questionnaires that we could analyze.

Table 2: Our Survey Sample

Region Provinces (or Municipalities) Sampling Proportion

Number of Organizations in

Sample Northeast Heilongjiang, Jilin, Liaoning 1:1 25 East Beijing, Hebei, Shandong, Tianjin, 3:1 169

12

Jiangsu, Shanghai, Zhejiang, Fujian, Guangdong, Hainan

Central Shanxi（山西）, Anhui, Henan, Hubei, Hunan, Jiangxi

1:1 152

West Gansu, Guangxi, Guizhou, Inner Mongolia, Qinghai, Shanxi（陕西）, Sichuan, Yunnan, Chongqing, Ningxia, Tibet, Xinjiang

2:1 248

Total 594

This data will be mainly used to discuss the issue of accountability of CPOs.

The Chinese Civic Philanthropy Organization Database 2013

The Chinese Civic Philanthropy Organization Database was launched by SOP,

NGO2.0 and the Narada Foundation in 2013. The goal in creating this database was to

document the CPOs in mainland China and collect their basic information towards

building a directory that can be used by scholars, donors and supportive organizations

in the field of philanthropy. It is an online database, on which CPOs can voluntarily

register and modify their own basic information The standards of the respondents are

the same as The National Civic Philanthropy Organization Survey 2011. In December

of 2013, the database had collected 788 CPOs’ information that matched our

standards. However, this data is not collected by a standard random sampling process

and cannot fully represent the situation of all CPOs in the whole nation. It serves

instead as a reference value.

This data will be mainly used to describe the basic characteristics of CPOs in

China.

13

Findings

Basic characteristics

Based on the data from the Chinese Civic Philanthropy Organization Database

2013, we can see the number of CPOs in mainland China start rising in the 1990s,

growing much faster after 2000 and particularly in recent years.

Figure 1: Cumulative percentage of the CPOs’ establishing time

Source: The Chinese Civic Philanthropy Organization Database 2013, N=788.

CPOs in China are mainly located in the east region. They are located the least in

the central region. The development of CPOs in the east reflects that their growth is to

some extent relative to the development of the regional economy. For the located

provinces, we find that Guangdong, Beijing and Sichuan have more CPOs than the

other provinces.

As for the sectors that CPOs serve in, the data shows that adolescents

development, education and a combination of purposes are the top three sectors that

CPOs are focused on. The percentages in the environment, welfare of the disabled,

community development are relatively high as well. On the other hand, organizations

related to homosexuals, women, and animals are far less existent.

0.38 0.89 1.65 3.05 4.70 6.85 12.56

20.30 32.87

52.66

73.60

100.00

0 10 20 30 40 50 60 70 80 90

100

1939

1990

1991

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

%

14

Figure 2: Regional distribution of CPOs in China


Figure 3: Provincial Distribution of CPOs


East 54.70%

Central 15.61%

West 29.70%

0.51 0.76 0.76 1.02 1.02 1.14 1.14 1.27 1.27 1.40 1.52 1.65 1.90 2.16 2.16 2.66 3.05 3.05 3.05 3.17 3.30 3.30 3.68 3.68 4.19 4.57 4.57

7.87 13.45

16.75

0 2 4 6 8 10 12 14 16 18

Heilongjiang

Shanxi(山西)

Qinghai

Inner Mongolia

Tibet

Jilin

Jiangxi

Guizhou

Henan

Gansu

Zhejiang

Shandong

Shanxi(陕西)

Jiangsu

Beijing

(%)

15

Figure 4: Sectoral Distribution of CPOs


We use the expenditure scale of 2012 to measure the distribution of CPO

finances. The data shows that the CPOs’ annual expenditures are mainly in the range

of RMB 0-20,000. Further, 61.57% of the CPOs annual expenditures are under RMB

300,000. However, the data also shows that there are some CPOs with a relatively

large expenditure scale. The percentage of those with an expenditure beyond RMB

1,000,000 is 15.56%. This result implies that the financial power of different CPOs is

unbalanced.

2.03 2.66 2.66 3.81 4.19 4.31 4.57 5.96 7.11 7.36 7.49 7.61

10.53 11.17

13.32 13.83

16.24 17.77

25.25 25.76

34.52

0 10 20 30 40

Animal Female

Homosexsual Labour

Research Informa[on network

Aids Culture and art

Disaster Other CSR

Health Rural development

The eldly Community Suppor[ve

The disabled Environment

Combina[on of purposes Educa[on Teenager

(%)

16

Figure 5: Distribution of Expenditures of CPOs (2013)


Governance

The issue of governance refers to the discussion of who participates, how they

interact, and decisions are made in the operating process of an organization. The

board of directors and its relative institution is the core of a CPO’s internal

governance (Zhang, 2008; Chen et al., 2008). Our study thus focuses on the situation

of CPOs’ boards of directors.

The data shows that 69.20% of the CPOs have set up a board of directors. Among

these boards, 4.09% have never held a meeting and 55.97% held meetings on an

irregular basis. According to an evaluation of the efficiency of the board of directors,

respondents showed a generally positive attitude: the percentage choosing “” and

“very good” is totally 66.66%, while 12.90% of respondents evaluate the efficiency of

their board of directors as “” or “very poor”.

25.74

20.31

15.52

9.70

13.07

8.41 4.92

2.33 0

5

10

15

20

25

30 %

(¥)

17

Based on the above results, CPOs have been driven by diverse factors in recent

years and have paid more attention to setting up a board of directors in order to

improve their internal governance structure. However the board of directors’

functions, (such as decision making, supervising, and supporting the organization) are

generally not fully realized. Some CPOs’ boards of directors exist in name only. “The

phenomenon of founder” (Wang & Xu, 2004) that some scholars put forward in 2004

still exists, and has not been changed substantially.

Figure 6: Does the CPO Have a Board of Directors?

Source: The National Civic Philanthropy Organization Survey 2011, N=461.

No 30.80%

Yes 69.20%

18

Figure 7: Do CPO Boards hold meetings?


Figure 8: Evaluation to the board of director’s efficiency


In review of the last 20 years of CPO development in China, CPOs have not only

been facing institutional constraints, but also suffering from the pressures of resource

shortage. As a result, the founder of an organization plays a key role during the early

years of his institution. With the founders’ bravery, wisdom and tenacity, these CPOs

can survive. Several case studies have shown that some influential CPOs lose

Never 4.09%

Irregular 55.97%

Regular 39.94%

Very lible 4.72%

Lible 8.18%

Some 27.67%

Large 38.99%

Very large 20.44%

19

motivation gradually, as they often lack efficient internal governance. This is

especially true when the decision making power of the board of directors is taken up

instead by the founder, disempowering other players in the organization. This

insufficiency in democracy in the decision making process may bring about internal

issues in the organization.

This “phenomenon of founder” can become an obstacle to building the credibility

of an organization. In contrast, organizations that pay attention to building their

structure of internal governance, as their founders retire, strengthen their credibility,

as their boards of directors play an important role in responding to crises in social

trust, financial supervision, and resource motivation.

Legitimacy

The issue of the legitimacy of grassroots NGOs is always a concern of scholars

and practitioners. Legitimacy here means to “be accepted for being judged or trusted

that conform to a certain rule”. Gao Bingzhong (2000) has given “legitimacy” a series

of operating concepts, including social (cultural) legitimacy, legal legitimacy, political

legitimacy, and administrative legitimacy. In our study, we focus on the current

situation of legal legitimacy of CPOs.

The results shows that up until December 2011, 29.32% of surveyed CPOs did

not register in any capacity, 11.60% had industry and commerce registration, 48.80%

had registered as an association or private non-enterprise organization, and 8.97% had

not yet registered but were attached to another organization.

20

Figure 9: Registration status of CPOs


We can see that there is still a considerable portion of CPOs without legal status

acquired from the civil affairs department. In 2011, The Ministry of Civil Affairs and

local bureaus published relative policies to promote reform of “the dual management

mechanism”. However, instances such as Uncle Kun’s team that helps students in

Dongguan failing to apply for legal status 6 times in 7 years and a CPO in Beijing that

failed to apply for private non-enterprise organization for 12 years reflect the reality

of difficulties with the reforms.

Zhu Jiangang (2010) indicated that although some “hard thresholds” were

cancelled, the appearance of more “soft thresholds” made the registration of CPOs as

difficult as it had been before. Our study also finds that though nearly 50% of our

sample did not have formal status (including those not registered, those attached to

another organization, or those with industry and commerce registration) from the

Unregistered 29.32%

Abach to another organiza[on

8.97%

Associa[on 18.60%

Private non-‐enterprise organiza[on

30.20%

Industry and commerce registra[on 11.60%

Registered in Hong Kong, Macau or

Taiwan 0.22%

Other 1.09%

21

department of civil affairs for diverse reasons,4 these CPOS can still perform as

grassroots organizations with significant social innovation, having positive impacts on

vulnerable groups, providing social services, and promoting social construction.

These CPOs also have almost the same degree of social recognition as those with

legal status from the civil affair department. Many of the CPOs actually pay more

attention to their own accountability and credibility as they do not have legal status..

Some of them cooperate widely with the government, gaining a high level of

recognition from the government. We can give a preliminary judgment that apart from

some activities,, such as service purchasing from the government and receiving social

donations and tax benefits, whether or not a CPO has legal status is not the main

factor in their achievement of efficient accountability and social recognition.

Transparency

The study of CPOs’ transparency focuses on their financial management and

disclosure of information.

The results show that 86.64% of surveyed CPOs have set up a financial

management system. Among these CPOs, 73.99% of the respondents indicate that the

systems are executed “well” or “very well”. In addition, 56.58% of the CPOs have

published financial reports (statements) every year, while 28.95% of the CPOs have

never published financial reports (statements).5

4 Timothy Hildebrandt’s article The Political Economy of Social Organization Registration published on The China Quarterly had listed the reasons that the civil NGOs did not register, for example, the process of registering was too complicated, and the constrains from Social organization management regulations, and so on. 5 The financial reports (statement) here at least including: balance statement, business activity statement, cash

flow statement.

22

Figure 10: Whether the CPO has a financial management system


Figure 11: The evaluation of the financial management system


Figure 12: Whether the CPO has published financial report or statement


No 13.54%

Yes 86.46%

Badly 0.51%

Not well 3.54%

Modestly 21.97%

Well 48.74%

Very well 25.25%

Never 28.95%

Not every year

14.47%

Every year 56.58%

23

As for the staffing of CPOs, 87.34% of the CPOs have accountants, while 88.21%

have cashiers.6 The data also showed that 10.97% of the CPOs’ employed the same

people as both accountant and cashier, while 7.75% of the CPOs’ leaders serve as an

accountant and 13.97% serve as both cashier and accountant at the same time.

Figure 13: Whether the CPO has an accountant and cashier


Figure 13: Whether the accountant and the cashier are the same person


6 A CPO has an accountant (cashier) here doesn’t mean that it must be a full-time accountant (cashier), it can be a full-time, part-time or a volunteer that serve in this position.

87.34 88.21

0

20

40

60

80

100

Has accountant Has cashier

%

No 89.03%

Yes 10.97%

24

Figure 14: Whether the leader serves as accountant or cashier

Source: The National Civic Philanthropy Organization Survey 2011.

What’s more, 53.81% of the CPOs have never accepted an external audit.7 We

also see that sponsor and donor, members assembly meeting and the board of director,

staff and volunteer are the most prior objects of financial information publishing, the

percentages of the above objects reach to 57.70%, 56.83% and 51.41%.

Meanwhile, 2.60% of CPOs have never published their financial information to

any stakeholders. Figure 15: Whether the CPO has accepted external audit


7 The audit here means either the audit for the CPO’s whole financial situation, or the audit for a single project.

7.75

13.97

0

2

4

6

8

10

12

14

16

18

20

Leader serves as accountant（N=400） Leader serves as cashier（N=401）

%

No 46.19% Yes

53.81%

25

Figure 16: The objects of publishing financial report

Source: The National Civic Philanthropy Organization Survey 2011, multiple choice.

As shown in the results above, though many CPOs have set up financial

management systems, these systems still need to be strengthened in their execution. In

addition a proportion of the CPOs do not even reach the lowest standard of financial

management. For example, the positions of accountant and cashier officially cannot

be filled by the same person. In 2011, some CPOs in China had crises of credibility

due to financial management problems, and the public became sensitive toward this

kind of problem. This shows that constructing normative financial management

systems is still fundamental work of many CPOs. On the other hand, in 2011 it was

shown that after suffering suspicion, some CPOs’ honest, open and responsible

attitude and behavior won praise from the public.8 We expect that due to the rapid

8 For example, after the financial problem come out , NGOCN had organized an investigative group immediately, and published detailed report and the decision of the board of director after investigation. Facing the similar situation, Qinghai Gesanghua Education Helping Institute entrust an independent assessment agency to launch specific assessment, and publish report to response to the query.

57.70 56.83 51.41

44.03 41.00

29.07

4.34 2.60

0

10

20

30

40

50

60

70 (%)

26

development of the new media, 9 the promotion of official policies, and the

emergence of supportive organizations in the same field, 10 CPOs’ financial

management and information publishing will be improved to some extent, pushing the

progress of increasing transparency of CPOs.

Work performance

Work performance is the external aspect of a CPO’s capability. In this study, we

focus on the structure of staffing and the degree of participation of the object to be

served.

The results show that 66.2% of the CPOs have at least one full-time staff member.

Among these CPOs, there are on average 10.4 full-time staff members, with a median

of 4. Meanwhile, 60% of them have less than 5 full-time staff members and 3.3%

have above 50. The research further shows that 44.9% of the CPOs have at least one

part-time staff member, while there are 2.65 part-time staff members on average with

the median among them being 2. In addition, 96.5% of the CPOs have at least one

volunteer worker for them.

Figure 17: CPO Staff


9 According to the result from Chinese Philanthropy Organization Internet Using Analysis, in the total 401 organizations, 98.75% have used internet, 69.3% have applied domain names, 56.1% have blogs. More information about this report can see http://www.ngo20.org. 10 For example, the supportive organization USDO has published a financial information publishing statement model, in order to make the CPOs publish financial information more convenient and normative.

66.16

44.90

96.53

0 20 40 60 80 100

Has full-‐[me staff

Has part-‐[me staff

Has volunteer

(%)

27

Figure 18: The distribution of full-time staff


Table 3: Statistical results of full-time and part-time staff

Type Average Std. Median Full-time（N=305） 10.14 25.83 4 Part-time（N=209） 2.65 2.10 2


We conclude that not only the level of funding of CPOs but also their level of

human resources have recently become quite weak. Throughout their development in

the last 20 years, although CPOs have responded well to social needs and solving

social problems, their capabilities are still far from what is expected of them, which

may weaken their credibility indirectly.

In particular, CPOs are usually absent in response to some significant social

issues, which may disappoint the public. As a result, a lack of capability of CPOs has

become a common judgment of the government.

On the other hand, other data indicates that we should still remain confident in the

potential of CPOs. Some scholarship has proven that the degree of participation of

clients in a CPO’s projects or process of management and decision-making can

60.00

20.98

10.16 5.57

3.28 0

10

20

30

40

50

60

70

<=5 6-‐10 11-‐20 21-‐50 >=51

%

28

directly impact the performance of the organization (Blagescu et al., 2005). The data

shows that 80.31% of respondents consider the degree of participation of their service

clients in their projects as “high” or “very high”. Emphasizing the idea and method of

participation increases the efficiency and sustainability of the CPOs.

Figure 19: The evaluation of the service object’s participation degree


Who is the most important stakeholders that the CPOs should be accountable for?

Different CPO has different answer. According to Li’s research, he argued that the

subjects and their priorities are different based on different political, legal and

institutional environments (Li, 2010). In order to learn more about the subject and its

priorities in accountability, out survey has investigated what kind of individual or

group that the CPOs responsible for.11

The results show that 41.46% of CPOs place “service object” in first position and

27.72% of the CPOs place ”sponsor or donor” in first position. The percentage

placing the above two groups in the top three positions are 72.23% and 71.15%, 11 In the survey we let the respondents choose three responsible objects, and place them in the order based on the degree of priority.

Very low 1.09%

Low 3.72%

General 14.88%

High 50.33%

Very high 29.98%

29

respectively. This shows that CPOs have a strong motivation towards “downward

accountability”. We find also that some CPOs do not just serve their objects directly,

but also provide a platform for their volunteers to serve them. In this process, they

emphasize harmonious social values such as participation, equality, and respect. It

reflects the level of embedment in a community of a CPO, which is profoundly

valuable in promoting domestic social construction and sustainable development.

Figure 20: The CPOs’ accountability subjects and their priority


Conclusion

In the survey conducted in 2011, nearly 70% of CPOs had set up a board of

directors. It was an important symbol of their increasing capabilities. In general,

however, the functions of the board of directors, such as decision-making, supervising,

and supporting staff, are still not fully displayed. Some of them exist in name only.

Meanwhile, the “phenomenon of founder” that has troubled CPOs for a long time has

1.95

1.52

21.91

43.38

24.51

39.91

71.15

72.23

0.67

0.22

3.77

7.10

7.76

11.31

27.72

41.46

0 20 40 60 80

Other

Peer

Public and media

Staff and volunteer

Government administra[on

Member assembly mee[ng or board of director

Sponsor or donor

Service object

At the first place At the first three place

(%)

30

not improved substantially; CPOs’ founders continue to usurp the board of director’s

decisions. The lack of democracy in the decision-making process can lead to

contradictions or even a breakdown of the organization. This may hugely weaken a

CPO’s credibility. Therefore, constructing an efficient internal governance structure

and especially making the board of directors the core of decision-makers, is a key step

in constructing efficient accountability and credibility of CPOs.

Although “the dual management system” has been reformed in recent years, there

are still difficulties with the actual practice of these reforms, such as the emergence of

“soft thresholds” that hinder the registration of CPOs. Our study also finds that

although some CPOs do not have legal status from the civil affairs department, they

can still fully develop their advantages, cooperate widely with the government, and

gain significant recognition from the government and the public.. Indeed, whether or

not a CPO has legal status is not the main factor impacting a CPO’s efficient

accountability and social recognition, apart from certain factors such as service

purchasing from the government and receiving social donations and tax benefits.

As of 2011, some domestic CPOs had developed crises in accountability due to

financial problems. Constructing a standard financial management system is thus still

fundamental work for these CPOs. In particular, the execution of these systems should

be strengthened. With the rapid development of new media, the promotion of official

policy, and the emergence of more supportive organizations in this field, one can

foresee that the publishing of financial information by CPOs will be necessarily

improved in coming years. However, it is worth noting that financial management is

31

not merely a technical problem. In fact, it is due to the lack of efficient governance

and specifically the lack of supervising. As a result, CPOs should not focus only on

technical aspects when solving financial management issues.

On the whole, we determine that both the scale of funding and the level of human

resources of CPOs have recently been quite weak. Their capabilities are still far away

from public expectations, which, may lead to a lack of sustainable credibility. At the

same time, however, many CPOs are working down to the community and paying

attention to the participation of their objects of service, which ultimately enhances

serving efficiency and sustainability. What’s more, most of the CPOs will provide a

platform for their volunteers for long-term, with about 40% of CPOs considering their

service clients as those they have the most responsibility to. This shows a strong

motivation towards “downward accountability” and embeddedness in the community.

All of these factors make us confident of the future success of CPOs in China.

32

References Arya, B, & Lin, Z. (2007). Understanding Collaboration Outcomes from an Extended Resource-Based View Perspective: The Roles of Organizational Characteristics, Partner Attributes, and Network Structures? Journal of Management, 33(5), 697-723. Blagescu, M., De-Las Casas, L., Lloyd,R. (2005). Foundations of the Framework: the GAP Dimension Papers. From oneworldtrust.org/publications/cat_view/64-publications-by-project/69-principles-of-accountability. Brettell, A. (2000). Environmental Non-governmental Organizations in the People’s Republic of China: Innocents in a Co-opted Environmental Movement? The Journal of Pacific Asia, 6, 27-56. Chen, T. (2011). Wandering Between the State and Society: Action Strategy of Grassroots Voluntary Organizations. Journal of Sun Yat-sen University, 1. Chen. X, et al. (2008). Research on the Governance Mechanism of Nonprofit Organizations— A case study of Social Welfare Charitable Career Foundation. The journal of Taiwan Corporate Performance,1, 31-53. Deng, G. (2003). Changes and Development Trend of Chinese NGOs Since 1995. In Social Transition and NGOs Under Globalization. Ed. Lizhu Fan. Shanghai: Shanghai People's Publishing House. Deng, G. (2010). The Hidden Rules Governing China’s Unregistered NGOs: Management and Consequences. The China Review, 10 (1). Deng , Y, (2004). Restrictions to Survival and Development of Chinese NGOs. Sociology, 2. Edwards, M., Hulme, D. (1996). Too close for comfort? The impact of official aid on nongovernmental organizations. World Development, 24(6):961-973. Foster, K. W. (2002). Embedded within State Agencies: Business Associations in Yantai. The China Journal, 47, 41-65. Foster, K., & Meinhard, G. (2002). A Regression Model Explaining Predisposition to Collaborate. Nonprofit and Voluntary Sector Quarterly, 31(4), 549-564. Gamson, A., & Mayer, S. (1996). Framing Political Opportunity. in McAdam, Doug, McCarthy, John, & Zald, Mayer, eds. Comparative Perspectives on Social Movement. New York: Cambridge University Press, 275-290.

33

Gao, B. (2000). Legitimacy Issues of Social Organizations. Social Sciences in China, 2,100-109. Gao, B. (2006). Collaboration Among Mass Organizations and Organic Solidarity of China’s Civil Society. Social Sciences in China, 2. Gao, B, & Yuan, R. (2008). Blue Book on Civil Society Development in China, Beijing: Peking University Press. Goldman, M. (2005). From comrade to citizen: The struggle for political rights in China. Harvard University Press.

Hammersley, M., & Atkinson, P. (1983). Ethnography: Principles in practice. Routledge.

Hann, C. M., & Dunn, E. (Eds.). (1996). Civil society: Challenging western models. Psychology Press.

Harriss, J. (2011). Civil Society and Politics: An Anthropological Perspective. A Companion to the Anthropology of India, 389-406.

Hildebrandt, T. (2011). “The political economy of social organization registration in China.” The China Quarterly, 208, 970-989.

Hildebrandt, T. (2013). Social Organizations and the Authoritarian State in China. Cambridge University Press.

Hirschman, A. O. (1970). Exit, voice, and loyalty: Responses to decline in firms, organizations, and states. Cambridge, Mass.: Harvard University Press.

Ho, P. & Edmonds, R. L. (Eds.) (2008) China’s Embedded Activism: Opportunities and Constraints of a Social Movement. Routledge.

Howell, J. (1994). “Striking a new balance: new social organisations in post-Mao China”. Capital & Class, 18(3), 89-111.

Howell, J. (1997, April). “Post-Beijing reflections: creating ripples, but not waves in China”. In Women's Studies International Forum (Vol. 20, No. 2, pp. 235-252). Pergamon.

Howell, J. (2002) “Women’s Political Participation in China: Struggling to Hold Up Half the Sky”, Parliamentary Affairs.55, 43-56

Guo, C, & Acar, M. (2005). Understanding Collaboration Among Nonprofit Organizations: Combining Resource Dependency, Institutional, and Network Perspectives. Nonprofit and Voluntary Sector Quarterly, 34(3), 340-361.

34

Han,J. (2009). Discussing the four proposition of NGO’s undertaking the social responsibility in China, Social Organization Management Study,12,7-10. Hann, C. M., & Dunn, E. (Eds.). (1996). Civil society: Challenging western models. Psychology Press. He, J.. Huang, P., Huang, H. (2009). Between Resources and the Institution: Survival Strategies for Migrant Workers’ Grassroots NGOs. Society, 6. Hirota, M. (2004). Strategic Dynamics: A Collaborative Route to Program Development. From Chapin Hall Center for Children at the University of Chicago. Ho, P. (2001). Greening Without Conflict? Environmentalism, NGOs, and Civil Society in China. Development and Change, 32, 893-921. Howell, J. (1995). Prospects for NGOs in China. Development in Practice, 5(1), 5-15.

Isin, E. F., & Turner, B. S. (Eds.). (2002). Handbook of citizenship studies. Sage.

Janoski, T. (1998). Citizenship and civil society: A framework of rights and obligations in liberal, traditional, and social democratic regimes. Cambridge University Press.

Jin, J., & He, J. (2008). Expressions from a Segmented Bottom of Society: Non-governmental Environmental Conservation Organizations in the Debate over the Development of Hydropower Stations in Yunnan. Academia Bimestris, 4. Jordan, L. & Van-Tuijl, P. (2008). The Rights and Obligations of NGO’s Accountability in the Political Storm: Introduction and Outline. In Jordan, L. & Van Tuijl, P (Eds.), Kang, X. et al.(Trans) NGO Accountability: Politics, Principle and Innovation (pp.10-13). Beijing: China Renmin University Press Co. LTD. Kang, X. (1999). Chinese Mass Organizations in a Time of Transformation. Chinese Social Sciences Quarterly, Winter (Vol. 28). Kang, X., & Han, H. (2008). Graduated Controls: The State-Society Relationship in Contemporary China. Modern China, 34(1), 36-55. Kovach, H. (2008). Solving the Accountability Around the world: The International NGO’s Challenge . In Jordan, L. & Van Tuijl, P (Eds.), Kang, X. et al.(Trans) NGO Accountability: Politics, Principle and Innovation (pp.196). Beijing: China Renmin University Press Co. LTD.

35

Kubicek, P. (2002). The Earthquake, Civil Society, and Political Change in Turkey: Assessment and Comparison with Eastern Europe. Political Studies, 50, 761-778. Leung, A. S. (2003). Feminism in transition: Chinese culture, ideology and the development of the women's movement in China. Asia Pacific journal of management, 20(3), 359-374.

Li, L. (2004). Political trust in rural China. Modern China, 30(2), 228-258.

Li, Y. (2010). Research on the Non-Governmental Accountability. China Non-Profit Review, 1, 45-86. Lister, M., & Pia, E. (2008). Citizenship in contemporary Europe. Edinburgh University Press.

Lynch, D. C. (2007). Envisioning China’s political future: Elite responses to democracy as a global constitutive norm. International Studies Quarterly, 51(3), 701-722.

Lynch, D. (2010). The study of Chinese communication in the 2010s. International Journal of Communication, 4, 495-500.

Malinowski, B. (1922). Argonauts of the Western Pacific. Routledge and Kegan Paul.

Marshall, T. H. (1963). Sociology at the crossroads: and other essays. London: Heinemann.

Michelson, E. (2008). Justice from above or below? Popular strategies for resolving grievances in rural China. The China Quarterly, 193, 43-64.

Mill, J. S. (1999). On Liberty (1869). Broadview Literary Texts, Ontario.

Ministry of Civil Affairs. 2013. Ministry of Civil Affairs, China. Accessed Nov 4, 2013. http://www.mca.gov.cn

Morton, K. (2005). The Emergence of NGOs in China and Their Transnational Linkages: Implications for Domestic Reform. Australian Journal of International Affairs, 59 (4), 519-532. O'Brien, K. J. (1996). “Rightful resistance”, World Politics, 49, 31-55.

O'Brien, K. J., & Li, L. (2006). Rightful resistance in rural China. Cambridge University Press.

Palmer, C. (2001). Ethnography: a research method in practice. International Journal of Tourism Research, 3(4), 301-312.

36

Payton, R. L. (1988). Philanthropy: Voluntary action for the public good (p. 32). New York: American Council on Education. Pocock, J. G. (1975). The Machiavellian moment: Florentine political thought and the Atlantic republican tradition. Princeton University Press.

Putnam, R. D., Leonardi, R., & Nanetti, R. Y. (1994). Making democracy work: Civic traditions in modern Italy. Princeton university press.

Roelofs, J. (2007). Foundations and Collaboration. Critical Sociology, 33, 479–504. Roney, B. (2011). China's Nongovernment Organizations to the Wenchuan Earthquakes and Civil Society: A Comparative Study of the Response of China's Nongovernment Organizations to the Wenchuan Earthquake. China Information, 25(1), 83–104. Saich, T. (2000). Negotiating the State: The Development of Social Organizations in China. The China Quarterly, 161, 124-141. Senier, L. (2011). A New Approach to Labor-Environment Coalitions. Center on Nonprofit, University of Wisconsin–Madison, Research Digest, Fall. Shaw, R, & Goda, K. (2004). From Disaster to Sustainable Civil Society: The Kobe Experience. Disasters, 28(1), 16–40. Shieh. S, & Deng, G. (2011). An Emerging Civil Society: The Impact of the 2008 Sichuan Earthquake on Grassroots Associations in China. The China Journal, 65, 181-194. Simon, W. (2009). Regulation of Civil Society in China: Necessary Changes After the Olympic Games and the Sichuan Earthquake. Fordham International Law Journal, Accepted Paper No. 2009-4. Slim, H. (2002). By What Authority? The Legitimacy and Accountability of Non-governmental Organizations. In Jordan, L. & Van Tuijl, P (Eds.), Kang, X. et al.(Trans) NGO Accountability: Politics, Principle and Innovation (pp.28). Beijing: China Renmin University Press Co. LTD. Snavely, K, & Tracy, B. (2000). Collaboration Among Rural Nonprofit Organizations. Nonprofit Management & Leadership, 11(2), 145-165. Songco, D. A. (2007). The evolution of NGO accountability practices and their implications on Philippine NGOs. Philippine Council for NGO Certification. 200_.. From http://www.twnpos.org.tw/upload/philippines-evolution-of-ngo-accountability-implic

37

ations.pdf. Sowa, E. (2009). The Collaboration Decision in Nonprofit Organizations: Views From the Front Line. Nonprofit and Voluntary Sector Quarterly, 38(6), 1003-1025. Spires, J. (2011). Contingent Symbiosis and Civil Society in an Authoritarian State: Understanding the Survival of China’s Grassroots NGOs. American Journal of Sociology, 117(1), 1-45. Sun, Liping. (2008). Practical Sociology and Analysis on the Market Transformation Process. Social Sciences in China, 5. Tang, W, & Ma, X. (2011). Independency of de-politicization : A Survival Strategy for Civilian-run Social Organizations – Based on the Case of NPI Public Welfare Organization Development Center. Zhejiang Social Sciences, 10. Tarrow, S. (1998). Power in Movement: Social Movements and Contentious Politics. Cambridge: Cambridge University Press. Tong, Z. (2009). The Mechanism of Mobilization and Development of the Natural Protection Campaign with the Fight against Dam Construction in Nujiang as an Example. Open Times, 9. Wang, M. (2007). Current Development Status of China’s NGOs and Policy Analysis. China Public Administration Review, 1. Wang, M. (2010). Development Trends and Characteristics of Chinese Social Organizations. China Nonprofit Review, 1. Wang, M. & Xu, Y., (2004). “The 2003 phenomenon” of Chinese civil organizations. Xuehai, 4, 39-42. White, G. (1993). Prospects for Civil Society in China: A Case Study of Xiaoshan City. The Australian Journal of Chinese Affairs, 29, 63-87. Wu, F. (2005). Double-Mobilization: Transnational Advocacy Networks for China’s Environment and Public Health. Ph. D. dissertation of University of Maryland. Xie, H. (2004). Dilemma of the Legitimacy of China’s NGOs. Cass Journal of China, 2. Xu, Y. (2008). Development Trends of China’s Grassroots Organizations. Xue Hui, 1. Yang, G. (2005). Environmental NGOs and Institutional Dynamics in China, The

38

China Quarterly, 181, 46-66. Yasiri, J. (2011). The Center for Nursing Excellence: A Case Study of Nonprofit Collaboration. Center on Nonprofit, University of Wisconsin–Madison, Research Digest, Fall. Zhang, J. (2012). From Debates on the Structure to Analyses on Action: A Review on Overseas Researches on Chinese NGOs. Society, 3. Zhang, J., & Zhuang, W. (2008). Informal Politics: A Grassroots NGO’s Action Strategy – Based on the Case of the Organizing Committee of a Get-together of the Guangzhou Property Owners Committee. Sociological Studies, 2. Zhang. M. (2008). Research on the Governance Mechanism of Nonprofit Organizations. Doctoral dissertation, Jinan University. Zhao, X. (2004). Strategies of Chinese NGOs for Coping with the Government: A Preliminary Investigation. Open Times, 6. Zhu, J. (2004). Grassroots NGOs and the Development of China’s Civil Society. Open Times, 6. Zhu,J. (2011, October 11). The transformation of Guangdong’s philanthropy career, hoping more Uncle Kun stand out. Nanfang Daily. From http://www.southcn.com/nfdaily/opinion/content/2011-10/11/content_31183787.htm Zhu, J., & Chen, J. (2009). Combatting the Earthquake and Relieving the Disaster: An Opportunity for the Rise of China’s Civil Society? The Twenty-first Century, 114. Zhu, J., Wang, C., Hu, M. (2009). Obligation – Collaboration – Action: A Case Study on NGOs’ Participation in Disaster Relief of the Wenchuan Earthquake. Beijing: Peking University Press.

initiative on philanthropy in chinaand social transitions continue, the landscape of civil society...

Documents