An Analysis of China Health Charity Credibility Before and After the 2016 Charity Law of the People's Republic of China

Due to corruption and limited oversight, philanthropy in China has come under increasing scrutiny by both the Chinese government and public. In particular, corruption has impacted charities, resulting in operational funding declines that have also impacted legitimate charities serving the vulnerable. Hence, an increase in the number of Chinese charities without adequate transparency and needed good governance threatens the health of these organizations and their service groups. In response, the Chinese government enacted the 2016 Charity Law, implemented on September 1, 2016. Yet the impact of this law, if any, is unknown. We therefore conducted a literature review of the academic and gray literature to assess characteristics of the law, its strengths and limitations, and to explore anti-corruption case studies. In addition, we reviewed publicly available secondary data on the transparency status-complete financial information and responsible staff-of Chinese charity organizations and a group of health-related specific charities before and after the Law's enactment. This included the transparency scores of the top 100 charities and top 30 health-related charities in China. The academic literature we reviewed focused on general governmental corruption and little on charity-related corruption. However, the gray literature reflected a poor view of charities in China due to publicized claims of fund and abuse. Based on our secondary data analysis, we found charity organizations' transparency shows some variation but as a total continues to score low overall across the top net asset holding charities. Importantly, based on a regression analysis, the transparency scores of Chinese charities did not experience a significant change despite the Charity Law's enactment. In response, strengthening the Charity Law by enhancing enforcement of financial regulations and implementing systemic good governance measures is needed. Further, efficiency initiatives such as philanthropy de-administration, e-government, and outsourcing monitoring of Chinese charities to external agencies would promote trustworthiness and credibility of Chinese charity organizations now and in the future.