Fundraising Policy Reform and its Impact on Nonprofits in China: A View from the Trenches

Abstract

After decades of strict charitable solicitation regulation, the Chinese government has recently begun to experiment with fundraising policy reforms in some local jurisdictions. In this comparative study of two metropolitan cities, Shanghai and Guangzhou, we examine the nature, content, and scope of the reform and its impact on nonprofit organizations. Our archival analysis indicates that the new policies in both cities helped create a more supportive regulatory environment for the nonprofit sector, though they differed in the extent to which policy change departed from the status quo. Yet somewhat surprisingly, the reform elicited a lukewarm reaction from the nonprofit sector: only a very small fraction of nonprofit organizations actually fundraised under the new policies, and their performance varied remarkably. Our field work further reveals that many nonprofit leaders had reservations about the policy initiatives. Possible reasons for such reservations include fragmented policies on nonprofit registration and taxation, discretionary authorization system, and the weak fundraising capacity of nonprofits.