Win trust through transparency

To make sure that every penny of the donations for disaster relief operations in Lushan earthquake is used properly, the key is to boost the supervision of charity organizations' financial affairs, says an article in the 21st Century Business Herald. Excerpts:

In the first 36 hours after the Lushan earthquake, 36 foundations in China collected 266 million yuan ($42.22 million) in donations and the amount is increasing fast.

The question of how to manage the huge amount of money and use it properly has become a big challenge for Chinese charities, as there were previous reports of irregularities.

Transparency is the best way for philanthropic organizations to persuade the public that they are reliable organizations. It would be advisable for philanthropic organizations to entrust the management of their financial affairs to third-party accounting firms.

However, 44.8 percent of philanthropic organizations in China do not employ full-time financial staff. Improving the financial management of these organizations is an important task.

Also, some important organizations like the Chinese Red Cross have a government background. Yet, they lack supervision and transparency. If the "official" organizations do not cut their links with the government, it will be very difficult for them to win the trust of the society. This should be the key reform for these organizations in the future.