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China demands more transparency from charities

Xinhua, April 25, 2012

• China's government put a draft regulation asking charities to regularly publish financial reports and tighten internal management up for public review on Tuesday.

  The document, drafted by the Ministry of Civil Affairs, requires charity foundations to regularly publish detailed reports on donations and expenditure after a charity project starts.

  If the project is operated longer than three months, financial reports should be published quarterly and, after it concludes, a comprehensive report should be released for public scrutiny, according to the draft.

  The proposed regulation acknowledges donors' rights to inquire how their money will be spent and makes clear that foundations must "give truthful answers in time."

  The proposed regulation is an effort to regulate the practices of charity foundations, improve transparency and tighten supervision.

  According to the document, foundations should establish effective internal management policies, put them under scrutiny of donors and government supervision departments, and publish them on their own websites and mass media designated by authorities.

  Their operational expenses should not be paid by donations unless it is written in fund raising policies and agreed by donors. And operational expense should not exceed 10 percent of the annual expense of the organization.

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