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Negative perceptions

Li Yuling, honorary president of the China Charity Federation, said the sector has been harmed by negative publicity and a poor public image, especially as some entrepreneurs conduct their businesses under the guise of charity, which has resulted in misunderstandings and mistrust.

"What is philanthropy? In many foreign countries, children learn about philanthropy at primary school, but many people in China are still unaware of it or they consider philanthropists to be hypocritical or fake," she said.

Kan Ke, deputy director of the Legislative Affairs Commission of the NPC Standing Committee, acknowledged the problem: "We have to admit the public has had doubts and lost some trust in the charity sector after a number of donation scandals in recent years. That's why we decided to solve the problems through legislation.

"We don't want to see charitable organizations using money donated by the public to fund businesses, neither do we want to see people pretending to be managers of charitable organizations," he said, referring to a 2011 scandal that prompted a backlash against philanthropic organizations.

The case involved a young woman, Guo Meimei, who posted photos of herself with luxury cars and expensive handbags on Weibo, China's Twitter-like social media platform. Guo's claims that she was employed as a manager of an organization associated with the Chinese Red Cross Charity made national headlines as outraged members of the public criticized what they saw as misappropriation of donated funds.

Although it was later revealed that Guo had no links with the charity, public trust had been undermined, resulting in a severe decline in donations to the Red Cross Society of China. The organization still hasn't fully recovered from the incident. In 2010, the Red Cross received donations totaling 7.63 billion yuan, but the figure fell to 4.198 billion yuan in 2011. Donations continued to decline year-on-year, and in 2014, the Red Cross received just 2.6 billion yuan.

'One bad apple'

"In the charity sector, one bad apple spoils the whole barrel. Illegal behavior jeopardizes the whole sector, so it's very important that supervision is strengthened to make philanthropy more popular with the general public," said Li Jing from the One Foundation.

Kan said the proposed legislation aims to improve the development of the charity sector, raising public awareness and encouraging more people to donate money.

"Over the past few years, the total amount donated annually has been about 100 billion yuan. That may sound a lot, but in fact, it's not a huge sum," he said.

According to the 2015 CAF World Giving Index, published in November by the Charitable Aid Foundation in London, Chinese people are reluctant to donate money to charities or volunteer to help. The survey ranked China next from last on a list of 145 countries and regions, only above Burundi.

"The reason lies in the public's low awareness of charity, and distrust of charitable organizations. We hope the new legislation will regulate the founding, operations and the methods of donation of charitable organizations, because the more regulated the industry is, the more donations we will receive," Kan said.