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2.3.2 Imperfect management system
He (2014) pointed out that for profit organizations or enterprises, NPO should pay attention to management, improper management system will derive many problems such as: low professional quality of staff, facilitating the conduct of corruption, failing to achieve the desired social and economic benefits, once these issues are known to the public, it will inevitably affect the public's trust for NPO.
Chui and Jordan (2016) cited NGO acts of dishonesty, such as the abuse of power, failure in deserving the name, unfair competition, involving in partisan politics, changing into interest groups, setting up scams and other acts. Through the empirical research, Liu (2013) found that vile practices such as the abuse of privilege, high wages, corruption, and changing into special interest groups existing in non-profit organizations, the roles of non-profit organizations are not as perfect as what people think.
Xu (2011) was based on the internal mechanism and the defects in the external system design of non-profit organizations to analyze the problems of NPO, pointing out that moral anomie and lack of systems are the main reasons leading to the lack of public trust in civil organizations. Zuo (2013) figured that the lack of public trust in NPO is reflected in the inefficient use of funds, the incoordinate proportion of funds penetrated by market operation mechanism and the personal use of regulatory vacuum and unlimited power for personal gain. Wand (2014) and Lane (2011) believed that there are four reasons for the lack of public trust in NGO in China, namely, the lack of public responsibility, lack of supervision, opacity of information and chaos of internal governance structure. In terms of the lack of public trust in China, Saich (2000), Zhang, Zhang, Comfort and Chen, (2016) were from the perspectives of internal and external factors to identify the internal factors, such as the lack of social responsibility and public awareness, lack of property rights mechanisms, serious administrative tendencies and imperfections of internal management systems, as well as the external factors consisting of weak social trust and law systems, dual management systems and difficulties in supervision.
The above study summarizes the problems of NPO due to the imperfect management system, these problems also exist in the Red Cross in China. This thesis investigated whether these problems have an impact on the public's trust in the Red Cross, as well the extent of the impact.
2.3.3 Information disclosure of charitable organizations
Regarding right of supervision, Eisenberg (2000) believed that the public have the right to know about the NPO, and have right of supervision and supervision responsibilities, at the same time, which enhance the supervisory authority and responsibilities of the public on NPO (Eisenberg, 2000; Yong and Zhou, 2011). He thinks that such right of supervision should be established on the basis of open and transparent NPO information. Right of supervision will not be realized once such basis missing. And for the NPO taking the Red Cross Society of China as their representative, its information is not open and it is not transparent enough, which is one of their disadvantages, which become the barrier for the public to implement the right of supervision.
Herzlinger (2000) established information disclosure mechanism on the transparency of NPO based on the successful experiences of U.S. Securities and Exchange Commission on securities trading management. Its core contents contain: information disclosure, information analysis, information dissemination, and sanction, i.e. “disclosure --- analysis --- dissemination --- sanction” (DADS method) (Herzlinger, 2000). The theory believes that: NPO lacks mandatory responsibilities mechanism commercial field has; in essence, DADS integrates information disclosure, information evaluation, supervision and sanction, with the purpose to not only require NPO to disclose information, but also emphasize on improving the information disclosed (Herzlinger, 2000). On this research, the author also referred to this theory to analyze the special reasons on public trust missing based on some particular situation existing in Chinese government and Chinese society, especially based on the dependency of Red Cross Society of China on the government, and work out optimizing strategies for the problems based on the causes.
The above-mentioned literatures introduce the problems in the establishment of public trust for NPO from the aspects of relationship between NPO and government, supervision and information disclosure. This study was based on the above research to discuss how the Red Cross in China has lost the trust of the Chinese public and how to restore the public trust, based on these literatures to build the evaluation system of the public trust in the Red Cross.
2.3.4 The evaluation indicators of public trust of NPO
Roney (2011) analyzed the dimension of evaluating the public trust of NPO and put forward a multi-dimensional analysis framework, which is manifested in three dimensions, first is the public trust of NPO for trustees, that is, upward public trust; second is the public trust of NPO for itself; third is the public trust of NPO for service objects (community or society), that is downward public trust.
Gao, Faff and Navissi (2012) put forward seven dimensions of evaluation on public trust: to ensure the provision of services, to ensure the interests of donors, to protect the interests of service objects, to protect the interests of organizations, to ensure the effectiveness and achievement of government funding, to maintain a competitive environment, to protect the interests of private sectors competing with NPO.
He (2011) was from five aspects: organizational governance, public responsibility, financial responsibility, social responsibility, the use of funds to establish individual indicators to carry out a case analysis on evaluation on public trust of NGO, which is a more empirical research on the public trust of NGO in China, it is indexing and quantitative to provide a better reference for this study.
The above studies construct the evaluation indicators of the public trust of NPO from different angles, but their research has some limitations. Gao, Faff and Navissi’s (2012) indictor system is too complicated to promote its evaluation system. The studies of Roney’s (2011), Ma’s (2006), He’s (2011) mainly focus on the evaluation on management and honesty of NPO, while neglecting the evaluation on the economic and social benefits of NPO. The standard of Saich’s (2000) is scientific, but it mainly focuses on the formulation of economic indicators of NPO, and it is not enough in the inspection on the quality of service and honesty. The author of this thesis mainly referred to Chu’s (2012) public trust evaluation system of NPO. Its system is simple and clear, but it is more comprehensive and meets the needs of this research. Therefore, this thesis developed the evaluation system and indicators of the public trust of the Red Cross according to Chu’s (2012) research.
Chu (2012) believed that evaluation of the public trust of charitable organizations is mainly reflected in four areas: the extent of integrity of charitable organizations, the extent of service of charitable organizations, the charitable extent of charitable organizations and the open and transparent extent of charitable organizations.
2.3.4.1 Organizational integrity level
Integrity of a charitable organization is the basis for the charitable organization to continue to obtain public trust, if public trust continuously declines, the public trust of the charitable organization is difficult to be improved. The public trust of charitable organizations can be divided into three aspects: whether the public are willing to donate to the organization, whether the public are willing to trust the organization, whether the public are willing to participate in the charity activities hosted by the organization (Chu, 2012).
2.3.4.2 Degree of service
According to Coleman's trust theory, it is vital for charitable organizations as NPOs with public charity to obtain the public's trust and support. Thus it is necessary to strengthen charitable organizations’ moral construction, improving the moral quality and service, awareness the organization staff (Chu, 2012). Considering from the staff themselves, the moral quality of staff of charitable organizations is more important than staff of other organizations, while the work attitude and efficiency are the embodiment of the quality of staff of charitable organizations, the degree of service of charitable organizations is reflected in the concise procedures, the proportionality of organizational expenses and scale of activities, and the effect of aid and donation (Chu, 2012).
2.3.4.3 Degree of performing acts of charity according to laws
The degree of abiding laws in the process of performing its duties of a charitable organization reflects the extent of the charitable organization’s following standards in the conduct of its duties and whether it is in accordance with the laws and regulations, whether it is protected by laws, of course, when it is protected by laws, it should also do its duty. Therefore, the leading indicators of degree of charitable organizations’ doing their duty according to laws can be divided into two types of responsibility mechanisms and the degree of performing duties according to laws, of which the responsibility mechanisms include accountability mechanism, appointment or dismissal of responsibility mechanism and supervision mechanism; the degree of performing duties according to laws includes the normative nature of procedure, fairness and legitimacy of performing duties (Chu, 2012). |
