FOUR HEROES AND THE STORIES BEHIND A Perspective of Understanding China’s Philanthropy

Lu Bo 20 Oct. 2011, IUPUI Lu Bo

Deputy Executive Director Beijing Vantone Foundation, China

Managing Director World Future Foundation, Singapore

Visiting Scholar The Center on Philanthropy, IUPUI ¢ CAO DEWANG

¢Cao Dewang, Chairman and CEO of Fuyao Glass Industry Group, the world’s second largest automotive glass supplier. He is regarded as a prominent entrepreneur and one of China’s top philanthropists.

¢Cao intended to donate 300 million shares in 2008 but was not approved by relevant authority. With his effort in past three years, Cao eventually set up Heren Charitable Foundation in 2011, financed by his 300 million shares valued at about RMB3.5B (US$541 million) from Fuyao Glass Industry Group. Cao’s foundation holds nearly 15% of Fuyao’s shares, which rocked China’s decades-long policy on philanthropy.

¢In 2010, Cao has donated 70% of his company's shares, a total of RMB200M to the China Foundation for Poverty Alleviation. The management fee for allocated and organizing relief work to victims of disaster in areas of poverty will not surpass 3%. (The government max used to be 10%. ) “THE BIGGEST PROBLEM IN CHINA‘S PHILANTHROPIC SYSTEM IS THE LACK OF TRANSPARENCY” — CAO DEWANG

Key Words:

ELITES vs. REFORMS

CHEN GUANGBIAO - CHAIRMAN OF HUANGPU RENEWABLE RESOURCES UTILIZATION CO., LTD. - ESTIMATED TO BE WORTH $510 MILLION—HURUN REPORT’S 2010 SPECULATION. - IN THE PAST 10 YEARS, CHEN DONATED OVER RMB1,400M.

¢ In 2008, Earthquake: Chen spent 54 days in the quake-hit zone and donated more than RMB100M (US$15 million) for post-quake construction. His chivalric behavior, made known via TV programs, was applauded nationwide and won him the title of “China’s top philanthropist.”

¢ In 2010, in an open letter to Warren Buffet and Bill Gates, Chen pledged to donate all his fortune to charity after his death.

¢ In Spring Festival, 2011, Chen went to Taiwan and donated RMB110M (US$ 17 million) to local underprivileged families. “IF YOU HAVE ONLY A GLASS OF WATER, THEN ONE PERSON CAN DRINK. IF YOU HAVE A RIVER, THEN YOU SHOULD SHARE IT WITH EVERYONE.” — CHEN GUANGBIAO

Key Words:

TRADITIONAL GIVING vs. MODERN PHILANTHROPY

JET LI AND ONE FOUNDATION ¢ Since its establishment in 2007, One Foundation has been running as a private charitable project under the Red Cross Society of China, and encountered legal problems when it tried to fundraise as an independent organization. One Foundation Project had made donations totaling to RMB291M by 2010, and made great contributions in quake-and poverty-relief projects as well as volunteers training programs.

¢ However, without an independent account, Li lacked credibility in proving the transparency of his foundation and didn’t have too much say in deciding how to use the donations. In January, 2011, the One Foundation ended its three-year affiliation to the Red Cross Society of China and established an independent public-fundraising foundation in .

¢ The transformation, as a result of China’s ongoing reform of civil affairs system, marked a new era for domestic NGOs, which plan to run charity affairs independently in China. “FOR THE FIRST TIME, WE HAVE SEEN THE SUCCESSFUL TRANSITION OF A PRIVATE CHARITY ATTACHED WITH A PUBLIC ORGANIZATION INTO A FORMAL PUBLIC FOUNDATION. IT‘S A CORNERSTONE OF CHINA’S CHARITY DEVELOPMENT ” — DENG GUOSHENG

Key Words:

CIVIL PHILANTHROPY

GUO MEIMEI AND THE RCSC SCANDALS

¢ In April, 2011, an Red Cross Society of China (RCSC) branch in Shanghai spent nearly RMB10,000 ($1,547) on a reception dinner for just 17 diners. The invoice was posted online and aroused public indignation.

¢ In June, 2011, a 20-year-old lady, Guo Meimei, who claimed to have a link to the society, boasted online about her luxurious lifestyle and triggered concern that donated money was being misused. Faced with a huge number of angry netizens asking for an explanation, the RCSC posted an announcement on its homepage, saying there was no connection with Guo Meimei. AFTERMATH

¢ An online investigation shows that 90% of the people surveyed said that they will not donate to the RCSC any more.

¢ In earlier July, the RCSC opened its own official microblog in order to demonstrate its willingness to enhance transparency in light of public distrust following the Guo Meimei scandal.

¢ On 1st August, the RCSC launched an online platform to disclose donation information with a test run, in its latest gesture to reassure donors of greater transparency. The first batch of data will reveal how the charity used donations from more than 100,000 individuals, organizations and corporations after a 7.1-magnitude earthquake hit Yushu county in Northwest China‘s Qinghai province on April 14th last year. WE'RE NOW FACING A NEW WORLD WITH NEW TECHNOLOGY, WHERE UNDER-THE-TABLE TRANSACTIONS ARE IMPOSSIBLE TO KEEP, CHARITY ORGANIZATIONS NEED TO HAVE A SENSE OF CRISIS, TO REFORM IN AN OPEN AND TRANSPARENT ENVIRONMENT WHERE THE PUBLIC WILL QUESTION THE CREDIBILITY OF THESE ORGANIZATIONS ALL THE TIME.” — WANG MING, DIRECTOR OF THE NGO RESEARCH CENTER AT

Key Words: TRANSPARENCY & ACCOUNTABILITY Q & A

E-mail: [email protected]