Charities under fire in light of controversy

Charities, especially those supported by celebrities, are facing increasing criticism online for their apparent lack of transparency following a widely publicized and controversial case.

Li Yapeng, the ex-husband of pop singer Faye Wong, was accused by whistle-blower Zhou Xiaoyun of embezzling tens of millions of yuan from his foundation.

Zhou published a post on his Sina Weibo micro blog on Jan 6, accusing Li's Smile Angel Foundation of "misallocating about 70 million yuan ($11.4 million) in charity funds".

The foundation refused Zhou's accusation and said, in addition to operational fees, the money was used for other charity programs and the construction of the Smile Angel Children's Hospital.

On Jan 26, Zhou submitted an application to the Beijing Chaoyang district's health and civil affairs bureau, asking it to make public the detailed financial statement of the Smile Angel Children's Hospital.

Li argued that the hospital belongs to a private non-commercial organization and needs only report to the governing body about donations and funding.

The application was rejected on privacy grounds.

Zhan Chengfu, director of the Ministry of Civil Affairs' department of social welfare and charity promotion, said on Tuesday that the charity should disclose its information to meet the public's right to know.

"For a charitable organization, if the information is not totally disclosed, the public will not be satisfied," Zhan said.

Zhan added that charitable organizations should learn how to "operate professionally".

The Smile Angel Foundation, also known as the Yanran Angel Foundation, is a Beijing-based charity founded in 2006 by Wong and Li to help Chinese children born with cleft lips and palates. It is affiliated with the China Red Cross Foundation.

The foundation is named after their daughter, Li Yan, who was born with a cleft lip.

Li established the Beijing Smile Angel Children's Hospital, China's first charity pediatric hospital, in 2012.

Experts are divided over information disclosure by charities.

Xu Yongguang, president of the Narada Foundation, which funds public welfare programs, said he supported information disclosure for charities.

"Information disclosure can win public trust and is beneficial to a charity's development."

The more transparent the charity organization, the better, Xu added.

However, Jin Jinping, a professor from Peking University law school, said: "It is not mandatory for private non-commercial organizations to disclose information. The organization can publish its information on a voluntary basis."

Jin said information disclosure could cover individual privacy, business operations and commercial secrets of an organization. And "such disclosure could make these organizations feel as if their dignity is under attack."

Wen Ming, a project officer from the China Social Entrepreneur Foundation, said it publicizes donations on its website and in annual reports, including the amount and use of each donation, and its donors agree with this disclosure.

"We pay great attention to the transparency of our foundation. Letting the public know donation information helps enterprises build up a good image."

fanfeifei@chinadaily.com.cn