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The ‘open the door reform’ in the economic system started in 1978, together with the global democratization movement and socialization movement has a great effect on the governance of non-profit organization. Loosen the restrict regulations, and facilitate the autonomous development of non-profit organization by laws is advocated. For lack of single agency in manage, the authorities is given to different agencies in its own domain. the management comes to a messy inevitably. Thus almost all administrative agencies (such as the Ministry of Culture, National Sports Committee, National Science and Technology Council, China Science Academy, and public relationship department) got involved in managing the social organizations. the numbers of non-profit organization increased dramatically by contrast. the Tian’anmen square event in 1989 and the Fanglun Event in the beginning of 21 centuries shocked the government, in order to finish the messy registration system and set up a dual-management principles over the non-profit organization and its activities, several laws were passed, such as “Management rules for the foundations”, “registration and management rules for social organizations”, the civil administration department gradually became the only agency who in charge of the registration job and plays the management role. Several measures were taken to get a through investigation into non-profit organization and many of them were asked to register again. The number of nationwide social organizations deceased from 181,318 in 1997 to 153,322 in 2001. It was during this period, “the registration and management rules for non-profit organizations” “management rules for the foundations” were passed. A steady foundation of legal status and support has been gained as to the non-profit organization.
Two good signal shows the Chinese government‘s awareness of importance of non-profit organizations for its volunteers, activities and charitable donation. First, since 2002, the government’s attitudes toward NPO changed from tradition administration, which was vertical rigid management, to complete the institutional development aiming at assisting NPOs’ internal governance, augmenting their capabilities, and further promoting the overall growth of China’s NPOs. Second, owning to the great success of volunteer gathered, aid provided, money donated in the series earthquakes in Sichuan. The quick response of non-profit organization was taken soon, By the end of May of 2008, the total amount reached 40 billion Yuan. Red Cross Society of China emergency teams have launched a major operation to help survivors of a 7.0 magnitude earthquake in an area of southwestern China’s Sichuan Province. the government and non-profit organizations started cooperation in types of services been bought by the China Red Cross Association, which is a quasi-governmental sector. The diverse needs of the social-market economy, together with the strong support of laws and government, lots of non-profit organizations develop quickly. Their domains cover almost in every aspect of social life, such as education, culture, science and technology, charity in tradition way, and anti-poverty, environment protection, neighborhood service of the new trends. According to statistics from the national civil administration department, by the end of 2008, there are approximately 41, 3000 civil organizations, including 22, 9000 social organizations, 18, 2000 private non-for-profit enterprises, and 1597 foundations.
3. Regulations and supervision on Nonprofit Organization in China
There are many laws and regulations on Nonprofit Organization in the different period of china. In 1950, Chinese Administrative Council drafted the first code on social Organization which named Temporary Registration and Management Rules for the Social Organizations. The main function of this law is to categorized the types of social Organizations and highlights the importance of following the guidance of Chinese communist party. Due to government regulations, administrative guidance, the Chinese social organizations gradually developed into organizations that resembled the administrative organizations in government.
Around the year of 1990s, the enacting of several regulations slowly vanished the blank of legal status, registration of Nonprofit Organization, and put an introduction of the CNI. In 1988, “Management rules for the foundations” were passed. “the registration and management rules for social organizations” were amended and “the registration and management rules for non-profit organizations” was passed in ten years later. In 2004, “Management rules for the foundations” were revised, it refers a higher minimum capital requirement, a complex structure, and duties of accounting, disclosure, and the requirement of timely disbursement. thus the non-profit organization came to formalized within the legal system, and the civil administration department in charging of the registration start to be clear.
As to the governance of non-profit organization, it can be divided into establishment, activities management, financial resources. The “graded registration”, “dual management”, and the non-competition rule should be strictly obeyed during the establishment of these non-profit organization, it can be registered at the national agency or the local social agency which depends on the district whether has been acrossed. The nationwide NPOs need to register at the national civil administration department, and are managed by the national department and the agencies authorized by the central government. But Most NPOs are choose not to register on the national level, but in the department on civil affairs in the local area. Registration itself has to be conducted on the national level with the MoCA or with the corresponding departments for civil affairs on the level of provinces, autonomous region, and directly administered municipality. the “dual management” refers to a sponsor organization should be involved in the process of registration and winding up, it is a unique feature of NPO supervision. In the approval procedure, the dual management system is manifest in that prior to the filing of the actual establishment application with the competent registration and administrative authority. the motion of the board of directors (or the standing board of directors) for winding up the SO must be adopted by the membership meeting (or the standing committee of the membership meeting) and needs the consent of the sponsoring organization. the non-competition rule is set to avoid the waste of labor ,money resources and it refers to none organizations can be allowed to register, if they have the same or similar functions in the same administrative district. By “the same functions,” it means that the name, mission, and functions of the NPOs are the same or very close. By “the similar functions,” it means that although the two NPOs have different names and different composition of staff members, the functions cover the same domain.
To organize the activities and management of non-profit organization, it should be carefully reviewed to make sure rules, regulations and laws be followed on the activities, changes, and termination. The “dual management” requires that the main duties of the corresponding administrative agency include: (1) reviewing the applications for the establishment of NPOs, reviewing for the changes to the registration and the termination registration; (2) providing guidance for all kinds of activities for the NPOs, such as the finance management and personnel management, the international communications, receiving donations from abroad, etc; (3) monitoring the functions of the NPOs to assure that the NPOs function well and obey the rules, regulations, and laws; (4) conducting the preliminary reviewing for the annual check; (5) assisting with the registration agency and other agencies to deal with the illegal cases; (6) providing guidance for the liquidation.
Since the complex registration process and not easy to find a sponsor organization to carrying out the process, there is a large number of unregistered NPOs according to the survey works of Chinese researchers.
Besides all the legislation enacted by the legislators and government, several model statutes concerning SOs, CNIs and foundations and specifying the detail requirements of the regulations were issued by MoCA to improving the internal organization structure of NPOs. Although these model statutes are not automatically binding, they are important in practice because it is supposed that the approval for the establishment of the respective NPO will not be granted if the requirements of the model statutes have not been fulfilled.
Moreover, due to the restraint on the establishment of funding with a minimum registered capital requires, it is quite difficult for the non-profit organization to attract funding. The dilemma goes harsh, because Neither do they have governmental funding, nor can they get private donations due to lack of trust, even though the love and dedication of Chinese citizens arised .
We can’t deny that, non-profit organization plays a critical role in the area where both government and market fail. the strict regulation of china does not match society’s needs, and the constrains can’t detect or correct the misconduct from the outside for such regulating tends to be small and under-sourced.
4. The Internal Governance of Nonprofit Organization
Since it is very hard to get funding, Nonprofit Organization should learn to utilize the profits and manage effectively. A way to improving its internal governance is of importance to deal with the problem of fund-raising, unclear responsibilities, and staff lacking. |
