Managing NPO term paper Xintong Hou Managing NPOs in China Abstract In 2012, there are nearly 460.000 legally certified non- profit organizations (NPOs) in China-with an annual 7 percent growth in recent years. However, in China, the emergence and development of NPOs has been situated in a unique historical and social context: controlled social resources, limited political diversity, and relatively less developed economies. Thus, even though they may both be called nonprofit organizations, NPOs in China and U.S. may differ drastically in the forms in which they emerge,
1. Managing NPO term paper Xintong Hou Managing NPOs in China
Abstract In 2012, there are nearly 460.000 legally certified
non-profit organizations (NPOs) in China-with an annual 7 percent
growth in recent years. However, in China, the emergence and
development of NPOs has been situated in a unique historical and
social context: controlled social resources, limited political
diversity, and relatively less developed economies. Thus, even
though they may both be called nonprofit organizations, NPOs in
China and U.S. may differ drastically in the forms in which they
emerge, the problems they face, their operating mechanisms, and the
focal points of research related to them. This article begins with
definition of Chinas NPOs. Utilizing this basis I will then examine
the current situation of Chinas NPOs by using SWOT analysis, and
will conclude with some recommendations. I. Definition In China,
according to the drafting and approval by the State Council issued
the relevant documents and regulations by civil organizations
management bureau under Ministry of Civil Affairs, non-profit
organizations mainly refer to the social groups and private
non-enterprise units. Social groups are formed voluntarily by the
Chinese citizens for the realization of the common will of members
in accordance with its charter activities of non-profit civil
society organizations (Ministry of Civil Affairs 1998), which
mainly include the associations, unions, research associations,
foundations, promotion associations,
2. Managing NPO term paper Xintong Hou association of commerce,
and other social organizations (Ministry of Civil Affairs Social
Group Management Division 1996). Private non-enterprise units are
formed by enterprises, institutions, social groups and other social
forces and individual citizens using non-state-owned assets
engaging in non-profit social service activities (Ministry of Civil
Affairs 1998), which mainly contain a variety of private schools,
hospitals, welfare institutions, community service centers,
vocational training Center, Research Institute, and cultural
centers. In academia, different terms like the TSOs, NGOs,
voluntary organizations, social organizations, religious
organizations, unions, cooperatives, etc. are used along with
non-profit organizations. The government, however, has no interest
in using the term non-profit organization, and promotes social
organization as the official term. II. SWOT analysis of Chinas NPOs
1. Strengths (1) Program related to development and social service
provision Reflecting on the fit of the state-society analytical
framework for China, China is neither a state-centered nor a
society-centered nation, but rather one with state inlaid within
society.(Zhao Xiumei, 2004). Due to the official-civil hybrid
characteristic of large parts of Chinas NPOs, their missions are
more or less linked to government needs. This, in turn, gives them
some advantages with programs related to development and social
service provision. Based on the data of the Ministry of Civil
Affairs, NPOs with missions related to economic development and
social services
3. Managing NPO term paper Xintong Hou delivery (agricultural
and village development 10 percent, social services 13 percent,
education26 percent, hygiene 10 percent) accounted for 54 percent
of total NPOs. This is especially true for system-induced NPOs
(SINPOs), who are usually formed to assist local governments in
addressing social affairs. SINPOs are placed directly in the center
of residential community life and could take advantage of
residential community resources and relevant authorities support,
and thus having fewer barriers and more resource to enforce their
programs. (2) Fund Since Chinas NPOs have more or less official
background, they are less likely to worry about their fund problem.
The Research Centre for Volunteering and Welfare, Peking
University, organized three workshops in the summer of 2002 in
Beijing, Guangdong and Shanghai to discuss NPO governance. It did
some interviews to attended NPOs. Based on the findings, the funds
of most surveyed NPOs had increased in the three years prior to
this survey. The increase was consistent across the board with no
significant variation among regions or among fields of activity. To
be specific, there were three main sources--overseas, government
and domestic donations. 54 percent of the NPOs surveyed for the
research did not receive overseas funds, while 44 percent did. NPOs
located in the capital or large cities were more likely to have
access to overseas funds than those in regional areas. Almost none
of the business and professional organizations received any foreign
funding. The government support for NPOs was reasonably
significant--funds from the government amounted to at least one
third of their total funds. There was obvious regional
4. Managing NPO term paper Xintong Hou variation in this
regard. 70 percent of the surveyed NPOs received domestic
donations. Almost all the NPOs in Beijing and NPOs all over the
country in the business and professional category received domestic
donations. 2. Weaknesses (1) Not independent, not mission-driven
The close relationship between the NPOs and the government makes it
easier for them to secure system resources; however, its a
double-edged sword. The other aspect is that Chinas NPOs need to
suffer from some structural flaws and pains. The Rules for Social
Organization Administration and Registration and the Model for NPO
Constitutions, issued by the Ministry of Civil Affairs in 1998,
require the NPOs to have a board, public meeting of members, legal
person and a general secretary. According to the Rules, the public
meeting is the top organ of the NPOs, in charge of approving and
amending the chapters of the NPO, selecting or recalling board
members, considering the annual and financial reports of board
committee, etc. Secondly, the board of directors is the executive
body of the public meeting and in charge of routine work. Thirdly,
a standing board of directors is available for the larger TSOs with
many board directors, and plays a crucial role during adjournment
of board of directors (Ministry of Civil Affairs, 1998). In
practice, however, since the prerequisite of successful
registration of a NPO is the support of one public official, it is
very difficult for the NPOs to have a genuine independent board or
independent decision-making mechanism. The survey conducted by
Tsinghua University found that less than 30% of the TSOs selected
their
5. Managing NPO term paper Xintong Hou leaders on the basis of
regulations and more than 60% of the TSO leaders were appointed by
the government-supervising agencies or nominated by the government
supervising agencies. Besides, almost half of the TSOs did not have
a formal decision-making system, only 11% could make decisions on
the basis of the formal procedure (Ming, 2001b). Another flaw is
individual/relationship based instead of mission-driven. NPOs in
China are very likely to fell victim to the ancient pat-tern of
Chinese politics: with a new emperor come new ministers. Although
NPOs are created to meet certain needs of the society and the
government, the external support enjoyed by certain NPO is
intimately connected to individual leaders. As a result, a
organizational leader change usually lead to losing momentum of a
NPO or even breakdowns in the organizations operations. And the
breakdown occurred not only in actual operations, but also in the
mission behind the operations. (2) Poor social mobilization
capacity After the Wenchuan Earthquake, two scholars, Han Junkui
and Ji Yingwe from Peking University did extensive surveys and
interviews with 465 individuals involved in the earthquake, 171
people who benefited from the charity work, and 60 NPOs. The result
shows many people in the affected areas only remember the names of
large, well-known NPOs. They generally have weak, if any,
impressions of smaller NGOs that were actually active in relief in
their areas. So aside from China Red Cross and other large
organizations, NPOs did not raise large amounts of capital. Their
ability to mobilize donations is limited, and consequently, their
ability to act and make an
6. Managing NPO term paper Xintong Hou impact is accordingly
limited. 3. Opportunities (1) government needs: more development
space In recent years, for promoting economic development, the
government has created more room for the development of
professional associations. In addition, in order to meet grim
challenges of human development, such as aged, unemployed, poverty,
etc., the government encourages the NPOs to deliver social service
(Yunsong, 2003). Following the 2008 Wenchuan earthquake, government
departments witnessed NPOs value in resolving social problems; its
attitude toward NPOs subsequently relaxed somewhat (Bian Ning,
2009). (2) After Wenchuan earthquake: increasing public support and
more volunteerism Despite the current limited social mobilization
ability and impact, the 2008 Sichuan earthquake did offer Chinas
NPOs and volunteerism an opportunity. After the earthquake,
volunteers from within China and from all over the world played an
enormous role. Volunteers and NPOs, which served as a vehicle for
volunteer action, showed all of society their value and capacity at
this unique time and situation. Volunteers were praised for their
spirit, and the inherent significance of NPOs was recognized. For
these reasons, 2008 has been heralded by the media as the advent of
Chinas volunteerism (). People did start to pay more attention to
charitable activities and to place high hopes in NPOs. The same
survey aforementioned shows most people are more than willing to
donate their money and time to charity. Those who benefited from
the charity work also reported high levels
7. Managing NPO term paper Xintong Hou of satisfaction with the
NPOs. 4. Threats: political and legal environment Main external
threat originates from the political and legal environment. A
social organization must first be affiliated with a government line
agency which is to make sure that the proposed organization targets
to fulfill an actual social need, does not overlap with any other
organizations, is not formed in any area where there already exists
a similar organization, and have members with educational
qualification and skills required to offer the proposed services
and effectively run the organization. When all these requirements
are fulfilled, the proposed social organization becomes eligible to
register with the Department of Civil Affairs. In this twofold
administrative system, both registration and administration
authority, and the government-supervising agency are responsible
for managing the NPOs. Based on the Rules for Social Organization
Administration and Registration, the responsibilities of
registration and administration authority include registration,
annual check and taking administrative disciplinary measures to the
NPOs that violate regulations or rules (State Council and Ministry
of Civil Affairs, 1999). It is noteworthy, however, that the
Chinese government has not specially formulated regulations to
address the fiduciary responsibility, transparency and
accountability of the NPOs. The existing legal and administrative
system for the NPOs may spur the fiduciary responsibility,
transparency and accountability more or less, in either direction.
Besides, a lot of grass-root NPOs in the past failed to register as
formal NPOs, because the government-supervising agency declined to
take any responsibility
8. Managing NPO term paper Xintong Hou for the NPOs political
views. Thus some famous grass-roots NGOs, like the Green Earth
Volunteers, the Global Village of Beijing and the Friends of Nature
had to register in the departments of Industry and Commerce, as
for-profit organizations. III. Recommendations and Conclusion Based
on the SWOT analysis of Chinas NPOs, I then raise several
recommendations from the perspectives of both the government and
the NPOs themselves. 1. From the perspective of the government For
one thing, the government should improve the legal environment
faced by Chinas NPOs. For example, the current laws related to NPO
public fundraising and many other detailed operations are lacking
or unclear. They government, thus need to give a more clear
direction through improving relevant laws and administrative rules
and creating new laws that consider protection, encouragement and
regulation, but not only regulation of NPOs. Besides, the
government should increase tax exemption rate for the NPOs.
Finally, it should loosen the registration standard. Ironically,
due to the restriction of NPO registration standard, many
grass-root NPOs are now registered as for-profit organizations.
This actually prevents the government itself from the unified
regulation of NPO sector. As China becomes wealthier and more
diverse, a more robust NPO sector is a necessity. Instead of
restricting it, the government should be more positively involved
in this process and take the initiative. For another, the
government should build a new pattern of collaborative relationship
with NPOs on the basis of partnership and positive interaction.
Today, with interest
9. Managing NPO term paper Xintong Hou groups multiplying
daily, there is an urgent need for the government to establish
mechanisms for social consultation, expression, and participation.
Establishment of such mechanisms will benefit the provision of
public goods at a basic level and will, to a large degree, ease the
potential crisis in the governance structure. Since the natural
disaster has been rising in recent years, disaster management would
be a good enter point. The government should establish a mechanism
for NPOs to participate in post-disaster reconstruction. NPOs with
the will, the ability, and the resources should be brought to their
full and unique potential under the governments direction. However,
the process should not be monopolized by the government. Beyond
public bidding with the China Red Cross, the government should also
consider stimulating small NPO involvement in reconstruction
through government contracting of public services. At the same
time, allowing NPO participation would develop NPOs further and
promote employment. This will not only encourage NPOs but will, on
another level, standardize and streamline them, resulting in a more
optimal distribution of social resources. Fortunately, some
positive changes had been seen since last year. The city of
Guangzhou in November 2011 announced a limited easing of civil
society control. A key adjustment is that now in Guangzhou
organizers of social groups could register directly with a civil
affairs office without have an official sponsor. The central
government later issued Opinions on Strengthening and Innovating
Social Management. And the 12th Five-year Plan also includes a
special chapter discussing social organizations. It promises to
reform the registration and management system
10. Managing NPO term paper Xintong Hou for social
organizations by clarifying five directions: unified registration,
clarified duties, coordination, layers of responsibility and
supervision under the law. 2. From the perspective of NPOs First,
Chinas NPOs should increase its social mobilization capacity. As
mentioned above, many NPOs still have relative low public
recognition. Therefore, NGOs should, while delivering services,
simultaneously increase branding and publicity. Another method to
increase social mobilization capacity is to use the internet. NPOs
should tailor the Internet to their own use according to their own
organizational and operational characteristics. In the meantime,
political viability always plays a critical role in deciding its
online mobilization strategies. Additionally, strategic and
thoughtful partnership with private corporations is another key to
maximize Internet NPOs capacity (Tian Luo, 2012). Based on the
successful cases of two Internet NPOs-- 1kg and Gesanghua, Internet
could be used by NPOs to boost their organizational performance and
to mobilize passive online users, transforming them into active
participants of missions of NPOs. Second, Chinas NPOs should
further enhance its credibility by taking more social
responsibility and add more social value. Considered the SWOT of
Chinas NPOs, social enterprise would be the optimal choice to
achieve this. Youth Business Chinas rebuilding assistance model
could be a successful example. During the aftermath of the 2008
Sichuan Earthquake, YBC quickly launched the Rebuild Our Home
Entrepreneurship Campaign. With the help of the Mianyang
government, YBC set up a local office and brought the campaign
directly to the disaster area. YBC took
11. Managing NPO term paper Xintong Hou advantage of its social
resources and assisted youth affected by the disaster in starting
their own businesses, which boosted the local economy and garnered
public recognition. YBCs success was due to the combination of
rebuilding and aid concepts with their own management ideas as well
as successfully integrated public resources and private resources
with its own unique charity management knowledge and standard
operations. Finally, Chinas NPOs should learn from foreign NPOs to
strengthen its internal management and external connection by
increasing the organizational transparency and make their
information of organizational structure, programs and finance known
to the public; complying with some ethics, values and principles;
borrowing the experience of business management and improve the
efficiency of functioning; and establishing appropriate evaluation
system. However, learning from foreign NPOs doesnt mean Chinas NPOs
should and would be exactly the same as them. Foreign NPOs are
products of their own contexts. In this way, Chinas NPOs would
inevitably develop their own unique form based on its political,
social and economic contexts as well as historical and cultural
traditions. By taking NPOs in more advanced Asian countries as
references, first, Chinas relatively less development economies
will limit the resources available to NPOs. Besides, this character
will also determine that the activities of Chinas NPOs would
continuously center on eliminating poverty, realizing economic
development and social equality. Second, the forms, development
space and mission of Chinas NPOs will for a long time, continue
being limited by political diversification and
12. Managing NPO term paper Xintong Hou paternalism traditions
as well as decided by government needs. Finally, traditional social
organizations in China such as rural civil groups have become a
kind of civic force or even a kind of unwritten social system. On
the one hand, they could limit the development of NPOs due to their
incumbent advantage. On the other hand, by collaboration and
cooperation, they could supplement NPOs missions and activities. 3.
Conclusion To sum up, Chinas NPOs are still in its infancy. In the
short run, their inadequate internal management structure and
capacity-building systems and not-so-supportive external political,
legal and social environment will all put challenges on them.
However, in the long run, all types of trends, including wealthier
society, more tolerance of the government, more social needs
accompanying the social development also to varying degrees provide
them with more opportunities. Chinas NPOs, when confronted with
such a series of opportunities and challenges, by enhancing their
strengths and mitigating their weaknesses, mobilizing more social
resources, enabling better provision of public services and making
a broader and deeper commitment to add social value, are destined
to become an increasingly important force in building a harmonious
society.
13. Managing NPO term paper Xintong Hou References The Ministry
of Civil Affairs, the Rules for Social Organization Administration
and Registration and the Model for NPO Constitutions, 1998 (in
Chinese). State Council and Ministry of Civil Affairs, the
Administration of Social Organizations, China Societal Publishing
House, 1999. /Bian Ning, 2009, NGO /zhong guo NGO sheng cun zhuang
tai diao cha, /zi zheng wen zhai, vol. 5, pp. 31-33. (Survey of the
Condition of Chinese NGOs) /Zhao Xiumei,NGO/ zhongguo NGO dui zheng
zhi de ce lue: yi ge chu bu kao cha, in /kai fang shi dai, 2004,
vol. 6, p. 6. (Chinese NGOs Political Strategies: a Preliminary
Investigation in Open Era) Tian Luo, 2012, Grassroots Mobilization
of Internet NGOs in China: The Cases of www.1kg.org and
www.geshanghua.org, In: ICTDACM, pp. 289-296. Haiyan Duan, 2010, A
Survey of Non-profit Organizations Evaluation Methods, Asian Social
Science, Vol. 6, No. 8, pp. 30-41. Yuanzhu Ding, 2008, Third Sector
Governance in China: Structure, Process and Relationships, S. Hasan
and J. Onyx (eds.), Comparative Third Sector Governance in Asia, pp
207-226. Li Yanyan, 2011, Key Factors for Establishing
Collaboration between NPOs and the Government: A Case Study, the
China Nonprofit Review, Vol. 3, pp 79-97. G. Zhiyong Lan and Joseph
Galaskiewicz, 2012, Innovations in Public and Non-profit
14. Managing NPO term paper Xintong Hou Sector Organizations in
China, Management and Organization Review, Vol.8, No. 3, pp.
491506. Wang Ming and Liu Qiushi, 2009, Analyzing Chinas NGO
Development System, the China Nonprofit Review, Vol. 1, pp 5-35.
Liao Xuefei, 2009, the Public Fundraising Journey of Grassroots
NGOs: the Case of the Cultural Development Center for Rural Women,
the China Nonprofit Review, Vol. 1, pp 99-111. Lu Fang, 2009,
Historical and Geographic Context, Development Space, and Asian
NGOs: Review of the State and NGOs Perspective from Asia, the China
Nonprofit Review, Vol. 1, pp 159-166. Zhu Xiaohong, 2009, Analysis
of YBCs Rebuild Our Home Entrepreneurship Campaign A Social
Enterprise Perspective, the China Nonprofit Review, Vol. 1, pp
263-283. Wang Ming and Sun Weilin, 2010, Trends and Characteristics
in the Development of Chinas Social Organizations, the China
Nonprofit Review, Vol. 2, pp 153-176. Di Jinhua and Zhang Cuie,
System-Induced NGOs Origins, Action Strategies, and Challenges: the
Case of the Elderly, Womens, and Childrens Shelter of the Ning
Sub-District Administration, Nanjing, the China Nonprofit Review,
Vol. 2, pp 129-141. Han Junkui and Ji Ying, 2009, Empirical
Analysis of Charitable Activities during the Wenchuan Earthquake:
Telling the NGO Story, the China Nonprofit Review, Vol. 1,
pp173-202.
15. Managing NPO term paper Xintong Hou Hu Shuli, Renbo and Lan
Fang, More Room to Breathe for China's Non-Profits: Government
controls are easing ever so slightly for educational charities,
environmental groups and other do-gooders, 05 April, 2012,
http://english.caixin.com/2012-04-05/100376367.html.