Corporate Charity In China

(The Guardian)  Charity: new cultural revolution.  By Jonathan Watts.  January 10, 2006.

China, the greatest economic success story of the 21st century so far, is calling on its growing middle class to share more of its good fortune with the needy. The government has made an appeal for charity amid rising criticism that the spirit of philanthropy is developing a lot less quickly than the urge to accumulate wealth, as the country becomes richer but more divided.

Twenty-five years of spectacular economic growth are estimated to have created more than 10,000 people with assets in excess of $10m (£6m). But while the new rich are spending, investing and gambling more than ever, their willingness to give something back to a society which still contains tens of millions of people living on less than a dollar a day is being called into question.

... With China developing so quickly, some of the newest millionaires say they have been too busy to consider their charitable responsibilities. Robin Li, the founder of the country's biggest internet search engine, Baidu, has a fortune estimated at £350m, most of it accrued in the past year. He admits his company has not given much back yet, but says this is simply because it has grown so fast. "We haven't done much because we only just went public," he said. "But going forward we would like to get more involved in charity work."

There is the carrot for charity work begets good corporate brand equity, and then there is the stick.  And sometimes the stick can be quite mean and unfair.  The rest of this post is about a big, bad stick.

First, a digression.  There is a famous Chinese scroll painting titled Qingming Shanghe Tu (Up the River on the Spring Festival).  The scene is supposed to be set in the city of Kaifeng.  Due to the immense fame of this painting, the city of Kaifeng has constructed a modernized Qingming Shanghe Park (清明上河園) that draws many tourists each year.  In 2005, there were 740,000 visitors and the gate receipts amounted to 22 million yuan.  It is rated as a national class 4A scenic site.

The rest of the story is given in Chinese News Net.

As a local success story, the Qingming Shanghe Park is a top local brand name.  On the morning of January 5, Kaifeng citizens found this headline in a local newspaper: "What does the fact that the Qingming Shanghe Park donated only 15 yuan mean?"

According to the report, the Kaifeng City Disaster Relief Office has received only 15 yuan plus some old clothing from this top tourism company as of the afternoon of January 4, 2006.  It was noted that 15 yuan is less than even the price of one admission ticket to the Park.  The report also quoted some citizens who said that the Qingming Shanghe Park drew throngs during the tourist 'golden' week and their admission prices are not cheap and their workers get paid good wages, so how can the company and their workers be so uncharitable?  A government worker told the reporter that he was very angry and that he "will not attend the Qingming Shanghe Park."

But were the numbers true?  

On January 16, a reporter from Zhengzhou Evening News went to the office of the Kaifeng City Disaster Relief Office for confirmation.  On a list of donors during October-December 2005, it was listed clearly that Qingming Shanghe Park gave 15 yuan and 520 pieces of clothing.

Is that the final say?

But the basic tenet in journalism is that you must ask the other side for their story.  On January 16, the same reporter from Zhengzhou Evening News went to interview the management of Qingming Shanghe Park.  "If we end on January 4, then the amount of our donations is not 15 yuan but 2,427 yuan plus 933 pieces of clothing.  In 2005, we made five donations, including donating 9,347 yuan to the Tsunami relief fund in January and more than 3,000 yuan to the handicapped persons fund in May."  The responsible Park person showed the records to the reporter.

Where did the 15 yuan figure come from?  On November 8, the Kaifeng Disaster Relief Office sent out an appeal to ask for donations in the form of either money or material.  The Qingming Shanghe Park considered that they had been raising cash for the first half of the year, so this donation campaign focused on materials instead (520 pieces of clothing were donated).  There were three workers who did not have any clothes to give, so they donated 5 yuan each.

Employee Cao Haoxue donated cash.  He told the Zhengzhou Evening News reporter: "Each time when the company donated money, the list is published at the entrance of the office building.  Everybody gives.  I have been working here for only six months and I don't have any spare winter clothing.  So I donated five yuan."

The Qingming Shanghe Park manager said, "It is factually correct that we donated 15 yuan and 520 pieces of clothing on that occasion.  In December, the Kaifeng City government along with the Kaifeng Disaster Relief Office made another appeal on behalf of people in hardship.  Our company took the call seriously and we donated 2,412 yuan and 413 pieces of clothing.  The money was sent to the city government and the clothes were sent to the Disaster Relief Office at their request.  It is obviously not the full picture to only say that we gave 15 yuan and some clothes."

Qingming Shanghe Park has officially asked the government departments to verify the information.  The Park believes that its reputation was damaged and it does not preclude the possibility of pursuing legal remedies.

The rest of the story is interesting in terms of issues of corporate social responsibility.  For example, 

"Corporations have return on investment as the ultimate goal.  They would give a lot of thought to anything with low returns.  Meanwhile society and government are hoping that corporations would donate a lot more money, especially those corporations which have been having good returns.  Thus, at a time when overall donations are far from enough to meet needs, there will continue to be conflicts between corporations and society."

and

Even if only 15 yuan was donated, does that mean that we don't care?  According to the Civil Affairs Bureau's "Temporary Methods On Disaster Relief Donation Management", article four stipulates that "disaster relief and donations should be voluntary and uncompensated, and it is forbidden to forcibly allocate quotas."  ... According to the donation list from a certain Kaifeng corporation, the amount of donation was based upon the position of the employee: leaders gave 100 yuan or more, department managers gave 50 yuan or more, party members gave 20 yuan, employees and clients gave 10 yuan.  If they did not do this, "it would be very difficult to reach the ideal amounts that the government departments wanted and that would be very embarrassing for the corporation."

Unanswered is this media-related question: Why did the original newspaper report of January 5 turn out that way?  Was the reporter lazy?  Was the editor out for hype with a deliberately biased and distorted story?