China’s charity law ‘needs lower limit’ on management fees or it risks abuse: political advisers

A proposed law to govern charities on the Chinese mainland does not sufficiently limit management fees, according to political advisers who cite concerns over misuse of public funds.

Under the draft charity law, submitted for the third reading at the annual parliamentary conference in Beijing on Wednesday, no more than 15 per cent of any charitable fund could be used to pay its management fee.

But several delegates said this was too high and left the funds at risk of abuse.

Management fees for charities in the West are usually around 3­ per cent.

READ MORE: Would China’s proposed charity law be a gift to the disadvantaged?

“It is unreasonable to set 15 per cent as the management fee rate for charities, as the management fee rate for funds [in wealth management products] is only 0.5 to 2 per cent,” Zhu Jianmin, a deputy from Liaoning, said at a panel meeting of social security deputies yesterday.

“Moreover, managing charity funds is much less financially risky than those of commercial funds so I see no reason why it is so high,” Zhu added.