Chapter V  Charitable Trusts

Article 44 For the purposes of this Law, the term "charitable trusts" refers to a type of public benefit trusts. In this context, a settlor, motivated by charitable purposes, entrusts his properties to a trustee in accordance with the law. The trustee then manages and disposes of the said properties under the trustee's name, in alignment with the intentions of the settlor, thereby conducting charitable activities.

Article 45 Charitable trusts shall be established and trustees and supervisors determined in written form. Trustees shall submit the relevant documents to the civil affairs departments of the people's governments at or above the county level where they reside for the record within seven days of signing the charitable trust documents.

Where the trustee fails to submit the relevant documents to the civil affairs department, he shall not enjoy the corresponding tax benefits.

Article 46 Settlors of a charitable trust should not designate, or designate in a disguised form, their interested parties as beneficiaries.

Trustees of a charitable trust shall adhere to the principles of openness, fairness and justice when deciding on beneficiaries. They should not designate, or designate in a disguised form, any interested party of them or their staff as beneficiaries.

Article 47 Settlors may appoint charitable organizations or trust companies that they trust as trustees of charitable trusts.

Article 48 Where a trustee is in violation of trust obligations or unable to perform his duties, the settlor may replace the trustee. The new trustee shall, within seven days of the date of the replacement, file such replacement with the civil affairs department that put the original trustee on record.

Article 49  In managing and disposing of the trust assets, the trustee of a charitable trust shall fulfill his fiduciary duties in accordance with the purpose of the trust and perform the obligations of good faith and prudent management.

Trustees of charitable trusts shall provide timely reports to the settlors on the handling of trust affairs and the management and use of the trust assets in accordance with the trust documents and the requirements of settlors. The trustees of charitable trusts shall report the handling of trust affairs and the trusts' financial position to the civil affairs departments with which records were filed at least once a year, and make the report public.

Article 50 If needed, settlors of charitable trusts may appoint a trust supervisor.

A trust supervisor monitors the actions of trustees, and safeguards the rights and interests of the settlors and beneficiaries in accordance with the law. The trust supervisor who finds trustees in violation of trust obligations or unable to perform their duties shall report to the settlors, and shall have the right to file a lawsuit to a people's court in his own name.

Article 51 Matters concerning the establishment of charitable trusts, the management of trust assets, the parties to the trust, and the termination and liquidation of charitable trusts that are not regulated in this chapter shall be governed by other relevant provisions of this Law; if not regulated by this Law, such matters shall be governed by the relevant provisions of the Trust Law of the People's Republic of China.

Chapter VI  Charitable Assets

Article 52 The assets of charitable organizations include:

(1) founding capital donated or funded by the promoters;

(2) properties collected from fundraising; and

(3) other legitimate properties.

Article 53 The assets of a charitable organization shall be used only for charitable purposes in accordance with the charter and donation agreements and shall not be distributed among the promoters, donors or members of the organization.

No organization or individual may divide up without authorization, misappropriate, withhold or unlawfully take possession of charitable assets.

Article 54 Charitable organizations shall register and catalog the properties they raise, manage them strictly and earmark properties for specific purposes.

Donated physical goods that cannot be easily stored, transported or are difficult to use directly for charitable purposes may be legally auctioned or sold by charitable organizations, whereby proceeds remaining after the deduction of necessary expenses shall be used entirely for charitable purposes.

Article 55 When charitable organizations make investments to maintain or increase the value of their assets, they shall abide by the principles of lawfulness, safety, and effectiveness, and all investment returns shall be used for charitable purposes. Major investment plans of a charitable organization shall be approved by at least two thirds of the members of the decision-making body. Assets funded by the government and assets restricted from investment under the donation agreements may not be used for investment. The person in charge and the staff of a charitable organization shall not work part-time for or receive remunerations from the enterprises in which the charitable organization invests.

The civil affairs department of the State Council shall formulate specific methods for the matters specified in the preceding paragraph.

Article 56 In carrying out charitable activities, a charitable organization shall, in accordance with the provisions of laws, regulations and its charter, use donated properties based on the fundraising proposals or donation agreements. If a charitable organization really needs to change the purpose of the donated properties that is specified in the fundraising proposals, the charitable organization shall file the relevant documentation with the civil affairs department that put the original fundraising proposals on record; if a charitable organization really needs to change the purpose of the donated properties that is specified in the donation agreements, the consent must be obtained from the donors.

Article 57 Charitable organizations shall employ rational designs for charity projects, optimize implementation processes, lower operating costs, and improve efficiency in the use of charitable assets.

Charitable organizations shall establish a project management system for tracking and supervising project implementation.

Article 58 Upon termination of a charity project, any remaining donated properties shall be disposed of in accordance with the fundraising proposal or donation agreement; where such matter is not prescribed in the fundraising proposal or agreed upon in the donation agreement, the charitable organization shall use the remaining properties in other charity projects with the same or similar purposes, and make public the information about such use.

Article 59 Charitable organizations shall determine the beneficiaries under the principles of openness, fairness and impartiality, and may not designate, or designate in a disguised form, interested parties of the management personnel of the charitable organizations as beneficiaries.

Article 60 Charitable organizations may, as needed, enter into agreements with beneficiaries to define the rights and obligations of both parties and to agree upon the purpose and amount of charitable assets, and methods of using the properties, among others.

Beneficiaries shall cherish charitable properties, and use charitable properties in accordance with agreements. Where beneficiaries fail to use the charitable properties in accordance with the agreements, or otherwise commit a material breach of the agreements, charitable organizations are entitled to request them to make a rectification; if the beneficiaries refuse to make a rectification, charitable organizations have the right to rescind the agreements and require the beneficiaries to return the properties.

Article 61 Charitable organizations shall actively carry out charitable activities, follow the principle of minimizing administrative expenses and fundraising costs to the most essential levels, practice frugality, and cut unnecessary expenditures to realize the full and efficient use of charitable assets. Annual expenditures for charitable activities incurred by a foundation with the public fundraising qualification shall be not less than 70 percent of its total revenue of the previous year or 70 percent of its average revenue of the past three years. Its management expenses of a year shall not exceed 10 percent of its expenditures of that year. Where the expenditures and management expenses of a year hardly meet the aforesaid provisions due to special circumstances, the foundation concerned shall report such circumstances to the civil affairs department that approved its registration and make a public explanation. 

Standards for annual expenditures, management expenses and fundraising costs of charitable activities carried out by charitable organizations shall be formulated by the civil affairs department of the State Council together with the finance, tax and other departments of the State Council.

If the expenditures and management expenses of an individual charitable donation activity are specified in the donation agreement, the agreement shall be followed.

Standards for annual expenditures and management expenses of charitable trusts shall be decided by the civil affairs department of the State Council together with the finance, tax, financial regulatory administration and other departments of the State Council.

Chapter VII  Charitable Services

Article 62 For the purposes of this Law, the term "charitable services" refers to uncompensated voluntary services and other nonprofit services provided to society or to other people for charitable purposes by individuals, charitable organizations or other organizations.

Charitable organizations may provide charitable services themselves, recruit volunteers to provide such services, or entrust other organizations with relevant expertise to provide such services.

Article 63  Charitable services shall be carried out with respect for the personal dignity of beneficiaries and volunteers, and shall not infringe upon their privacy.

Article 64  Charitable services such as medical rehabilitation and educational training that require specialized skills shall be conducted following the standards and procedures established by the state or industrial associations.

If charitable organizations recruit volunteers to participate in charitable services that require specialized skills, they shall provide relevant training.

Article 65 When charitable organizations recruit volunteers to participate in charitable services, they shall make all information related to the charitable services public, and inform them of all possible risks in the course of providing the services.

Charitable organizations may, as needed, sign agreements with volunteers to define the rights and obligations of both parties and agree upon the content, method and time of the services.

Article 66 Charitable organizations shall conduct real-name registration of volunteers, and record the time, content, evaluation and other information regarding their services. When requested by volunteers, charitable organizations shall truthfully issue proof of volunteer service free of charge.

Article 67 Charitable organizations shall engage volunteers in charitable services appropriate to their age, educational levels, skills and physical condition.

Article 68 Volunteers participating in charitable services under the arrangement of a charitable organization shall be subject to the management of the charitable organization and receive necessary training.

Article 69 Charitable organizations shall provide necessary conditions for volunteers to participate in charitable services, and protect the legal rights and interests of volunteers.

Before assigning volunteers to charitable services that may incur personal injury, charitable organizations shall purchase appropriate personal accident insurance for the volunteers.

Chapter VIII  Charity in Emergency Response

Article 70 When a major emergency occurs and immediate relief is needed, the people's government which assumes overall leadership responsibilities or organizes efforts for responding to the emergency shall set up, in accordance with the law, a coordinating mechanism and specify specialized offices and personnel to provide information on emergency needs, and organize charitable organizations, volunteers and other social actors to conduct fundraising and relief activities in a timely and orderly manner.

Article 71 The state encourages charitable organizations and charitable industrial associations to set up emergency response mechanisms to boost information sharing, consultation and cooperation, enhance the operational efficiency of charitable organizations and improve the efficiency of the use of charitable resources.

When a major emergency occurs, charitable organizations, volunteers and other actors shall, following the coordination and guidance of the people's governments concerned, conduct or participate in charitable activities in accordance with the law.

Article 72 Funds or goods received through public fundraising in response to major emergencies shall be distributed or used in a timely way. Acceptance of such funds or goods shall be made public at least every five days in the period of emergency response and relief. The distribution and use of such funds or goods shall be made public in a timely way.

Article 73 If a fundraising plan cannot be filed for the record before a fundraising activity aimed at the general public in response to a major emergency, due procedures for record filing shall be completed within 10 days from the date when such fundraising activity starts.Article 74 People's governments at or above the county level and their relevant departments shall facilitate the distribution and delivery of donated funds and goods. Township-level people's governments, sub-district offices, villagers' committees and residents' committees shall facilitate the distribution and delivery of donated funds and goods, information collection and other related matters as their capacity permits.

Chapter IX  Information Disclosure

Article 75 The state shall establish a sound system of charity information collection and release.

The civil affairs department of the State Council shall establish a sound and uniform charity information platform and provide free charity information release service.

The civil affairs departments of the people's governments at or above the county level shall, in a timely manner, release charity information to the society on the platform prescribed in the preceding paragraph.

Charitable organizations and trustees of charitable trusts shall release charity information on the platform prescribed in the second paragraph of this article and be responsible for the authenticity of the information they released.

Article 76 Civil affairs departments and other relevant departments of the people's governments at or above the county level shall make the following charity information public in a timely manner:

(1) registration items of a charitable organization;

(2) items submitted for the record pertaining to a charitable trust;

(3) the list of charitable organizations with the public fundraising qualification;

(4) the list of charitable organizations qualified for issuing pre-tax deduction receipts for donations for the public interest;

(5) tax benefits, financial aid, subsidies and other promotional measures for charitable activities;

(6) information regarding purchasing services from charitable organizations;

(7) results of any inspection and evaluation of charitable organizations and charitable trusts;

(8) results of any commendation or penalty of individuals, charitable organizations, or other organizations; and

(9) other information required for disclosure by other laws or regulations.

Article 77 Charitable organizations and the trustees of charitable trusts shall fulfill the obligation of information disclosure in accordance with the law. The disclosed information should be genuine, complete, and published in a timely manner.

Article 78 A charitable organization shall disclose to the public its charter and information on the members of its decision-making, execution, and supervision bodies, and other information required for disclosure by the civil affairs department of the State Council. Where there is a substantial change in the information mentioned above, charitable organizations shall disclose such change to the public in a timely manner.

Charitable organizations shall disclose to the public every year their annual work reports and financial reports. The financial reports of charitable organizations with the public fundraising qualification shall be audited.

Article 79 Charitable organizations with the public fundraising qualification shall disclose information about their fundraising and the operation of charitable projects on a regular basis.

For a fundraising aimed at the general public that lasts more than six months, details shall be disclosed at least once every three months. Full details shall be disclosed within three months of its completion.

For a charitable project that lasts more than six months, the details of project operation shall be disclosed at least once every three months, and full details of the project operation and the use of the funds and goods accepted shall be disclosed within three months of its completion.

Article 80 Where a charitable organization carries out fundraising aimed at specific potential donors, it shall update donors on information about donations and the use and management of the funds and goods accepted in a timely manner.

Article 81 Charitable organizations and the trustees of charitable trusts shall inform beneficiaries of the standards for subsidies, the work procedures and rules, etc.

Article 82 Information regarding state secrets, commercial secrets, and individual privacy, as well as information such as the names, titles, addresses and contact information of donors and settlors of charitable trusts without their consent for disclosure, shall not be disclosed.