What Is a Charitable Organization?

Charitable organizations are non-profit organizations that help others with the purpose of charity. A charitable organization is a type of non-profit organization. It collects certain funds or properties through fundraising and then distributes them to people in need.

Charity

Prior to 2016, Chinese legislation did not define charities and charitable organizations, and Article 3 of the Charity Donation Law and Article 60 of the Trust Law only defined "philanthropy". Judging from its content, the content of public welfare is consistent with charity. It can be seen from the legal provisions that the scope of charity in our country is relatively wide and has the characteristics of openness, which is in line with the trend of widening the scope of charity.

The "Twelfth Session of the Twelfth National People's Congress" adopted on March 16, 2016

Charity Law of the People's Republic of China

(Adopted at the Fourth Session of the Twelfth National People's Congress on March 16, 2016)

Chapter II Charitable Organizations

Article 8: The term "charitable organization" as used in this law refers to a non-profit organization that is established in accordance with the law and meets the requirements of this law, and aims to carry out charitable activities for the society.

Charitable organizations can take the form of foundations, social groups, social service agencies and other organizations.

Article 9: Charitable organizations shall meet the following conditions:

(1) the purpose of carrying out charitable activities;

(2) not for profit;

(3) having his own name and residence;

(4) Organized articles of association;

(5) having necessary property;

(6) There are qualified organizations and responsible persons;

(7) Other conditions stipulated by laws and administrative regulations.

Article 10: To establish a charitable organization, an application shall be made to the civil affairs department of the people's government at or above the county level for registration. The civil affairs department shall make a decision within 30 days from the date of acceptance of the application. Those who meet the conditions stipulated in this Law shall be registered and announced to the public; those who do not meet the conditions stipulated in this Law shall not be registered and shall be given reasons in writing.

Non-profit organizations such as foundations, social groups, and social service agencies that have been established before the promulgation of this law may apply to their registered civil affairs department for identification as a charitable organization, and the civil affairs department shall make a decision within 20 days of accepting the application. Those that meet the requirements of charitable organizations shall be identified and announced to the public; those that do not meet the requirements of charitable organizations shall not be identified and the reasons shall be stated in writing.

If there are special circumstances that require the extension of the registration or certification period, it may be appropriately extended after being reported to the Civil Affairs Department of the State Council, but the extended period shall not exceed 60 days.

Article 11: The articles of association of charitable organizations shall comply with the provisions of laws and regulations, and shall state the following:

(1) Name and domicile;

(2) organizational form;

(3) purposes and scope of activities;

(4) the source and composition of the property;

(5) the composition and responsibilities of decision-making and executive bodies;

(6) Internal supervision mechanism;

(7) Property management and use system;

(8) Project management system;

(9) the termination situation and the settlement method after termination;

(10) Other important matters.

Article 12: Charitable organizations shall establish and improve internal governance structures in accordance with laws, regulations and articles of association, clarify their responsibilities and authorities in decision-making, implementation, and supervision, and carry out charitable activities.

Charitable organizations should implement the country's unified accounting system, conduct accounting calculations in accordance with law, establish and improve accounting supervision systems, and accept the supervision and management of relevant government departments.

Article 13: Charitable organizations shall submit annual work reports and financial and accounting reports to the civil affairs departments in which they are registered. The report shall include the annual fundraising and acceptance of donations, the management and use of charitable property, the implementation of charitable projects, and the salaries and benefits of staff of charitable organizations.

Article 14: The sponsors, major donors and managers of charitable organizations shall not use their affiliated relationships to harm the interests of charitable organizations, beneficiaries, and public interests.

A charitable organization's promoters, major donors, and management personnel who engage in a transaction with a charitable organization shall not participate in the decision of the charitable organization regarding the transaction, and the transaction shall be disclosed to the public.

Article 15: Charitable organizations shall not engage in or finance activities that endanger national security and social public interests, shall not accept additional donations that violate laws and regulations and conditions that violate social morality, and shall not attach conditions to beneficiaries that violate laws, regulations and social morality.

Article 16 Any one of the following situations shall not be the person in charge of a charitable organization:

(1) Having no capacity for civil conduct or having limited capacity for civil conduct;

(2) where a sentence has been imposed for an intentional crime, and it has not been more than five years since the execution of the penalty;

(3) Acting as the person in charge of the organization whose registration certificate has been revoked or banned, within five years from the date of the organization's registration certificate being revoked or banned;

(4) Other circumstances stipulated by laws and administrative regulations.

Article 17: (1) Charitable organizations shall be terminated under any of the following circumstances:

(1) in the case of termination stipulated in the articles of association;

(2) It needs to be terminated due to division or merger;

(3) Not engaging in charity activities for two consecutive years;

(4) The registration certificate has been cancelled or revoked according to law;

(5) Other circumstances that should be terminated as required by laws and administrative regulations.

Article 18: Termination of charitable organizations shall be liquidated.

The decision-making body of a charitable organization shall set up a liquidation group within 30 days from the date of termination as provided for in Article 17 of this Law, and make a public announcement to the society. If a liquidation group is not established or the liquidation group does not perform its duties, the civil affairs department may apply to the people's court to designate relevant personnel to form a liquidation group for liquidation.

The remaining property after the charitable organization is liquidated shall be transferred to charitable organizations with the same or similar purpose in accordance with the regulations of the charity organization. If the charter does not provide, the civil affairs department shall preside over the transfer to charitable organizations with the same or similar purpose and make an announcement to the public.

After the charitable organization is liquidated, it shall cancel the registration with its registered civil affairs department, and the civil affairs department shall make an announcement to the society.

Article 19: Charitable organizations establish industry organizations according to law.

Charity industry organizations should reflect industry demands, promote industry exchanges, increase the credibility of the charity industry, and promote the development of charity.

Article 20: The specific form of organization and registration management of charitable organizations shall be formulated by the State Council. ^[2]