Shanghai's new charity law boosts transparency

Shanghai's first law on charity, with stipulations that detail transparency rules for charity organizations, was passed in the Shanghai People's Congress, the city's legislature, on Tuesday.

Directors and members of charity organizations are banned from working in or receiving payments from companies in which the organizations invest, or making use of the organizations to take part in profitable activities, according to the law, which will go into effect on November 1.

The beneficiaries of the organizations shouldn't be interested persons of their managers.

The organizations are obliged to closely follow the progress in implementation of their projects and to produce assessment reports of key projects and make them public.

And those who de-register themselves as charity organizations will be subject to a liquidation of their properties according to rules to be determined by the city's civil affairs authorities.

Charity organizations are supposed to file their plans to raise public donations with civil affairs authorities at least 10 days before the activities are held, but in times of big natural disasters, accidents and public health emergencies, the terms can be relaxed. In the latter case, too, authorities need to be informed.

Individuals who seek donations through media or the Internet will be held accountable for placing fabricated or inaccurate information, while media and Internet or telecom service providers are obliged to caution readers or users about the risks of donating to such individual causes and to stop serving the help seekers once illegal activities are uncovered.

The law also encourages the establishment of community charity supermarkets and foundations and requires that communities that initiate charity causes should notify all their members about the management and use of the donations raised.

Charity organizations are encouraged to offer professional guidance for communities in organizing charity events and to cooperate with higher education institutions on the education of charity professionals and research on charity affairs.

The law mandates that people who have made greater contributions to charity should get priority in receiving help from charity organizations when they or their family need and ask for help.