The national "Foundation Management Regulations" stipulate the nature, establishment conditions and procedures of foundations. According to relevant regulations, the threshold for establishing a foundation is relatively high. In addition, the "Foundation Management Regulations" stipulate that foundations are non-profit institutions. The value of foundation assets can be maintained and increased in a safe and reasonable manner. However, the foundation management regulations also require that the foundation’s expenditures for public welfare undertakings shall not be less than 70% of the current year’s income (income from donations and capital operations).
The "Regulations" contain 7 chapters and 48 articles. Compared with the "Foundation Management Measures" promulgated in 1988, the "Regulations" are not only richer in content, but also more complete in system. It can be said to be a redrafting of foundation registration and management regulations. From beginning to end, the "Regulations" run through the guiding principles of focusing on cultivation and development to standardize management and promote the healthy development of the foundation. Under this guiding principle, the Regulations focus on the following eight important features.
1. The Regulations clarify the public welfare nature of foundations and emphasize the importance of public welfare purposes. Public welfare is the essential characteristic of a foundation and the sole purpose of its establishment. Ensuring the public welfare of foundations is the fundamental task of the Regulations. The beneficiaries of public welfare organizations are usually unspecified individuals and groups. Any individual or group can accept funding as long as it meets the requirements of its purpose and business scope. The funds of the foundation come from the society and serve the society. In order to achieve this purpose, the "Regulations" have made many clear provisions. For example, a foundation is defined as "a non-profit legal person established in accordance with the provisions of these regulations using property donated by natural persons, legal persons or other organizations for the purpose of engaging in public welfare undertakings", emphasizing the public welfare nature of the foundation and making it different from other Distinguish between managed trust investment funds, for-profit fund management organizations and other private mutual benefit organizations. The public welfare nature of a foundation determines that its property must be used for public welfare purposes and must also be protected. Paragraph 1 of Article 27 of the "Regulations" stipulates: "The property and other income of the foundation are protected by law, and no unit or individual may privately divide, occupy, or misappropriate it." Article 33 also stipulates: "The remaining property after the foundation has been cancelled" It should be used for public welfare purposes in accordance with the provisions of the articles of association; if it cannot be disposed of in accordance with the provisions of the articles of association, the registration and management authority shall organize donations to social welfare organizations with the same nature and purpose as the foundation, and make an announcement to the public.”
2. The Regulations establish the principle of classified management and encourage all sectors of society to participate in public welfare undertakings. The "Regulations" divide foundations into "public foundations", that is, foundations that solicit donations from the public (most of the registered foundations in my country are currently public foundations). and "non-public fundraising foundations", that is, foundations that are not allowed to solicit donations from the public, and a new category of non-public fundraising foundations has been added. Non-public foundations are allowed to be named in the names of companies and individuals; for non-public foundations established with private property, relatives of donors are allowed to serve on the board of directors within a limited proportion. According to foreign experience, non-public foundations are an effective form of guiding the property of individuals and organizations to flow to society, especially to disadvantaged groups. They are also a way to redistribute social wealth and can maximize the mobilization of enterprises and individuals. Donation enthusiasm attracts more social resources to engage in public welfare undertakings, so that public welfare undertakings can have multiple sources of funds. For non-public foundations, the "Regulations" stipulate that the state should adopt policies of support and encouragement, and the regulations on the name of the foundation, registration conditions, fund use, etc. are relatively loose. In order to standardize fundraising activities for the public, protect charity resources, reduce public burdens, and maintain social stability and stability, the behavior management of public foundations is relatively strict.
3. The Regulations adapt to the new situation of reform and opening up and include foreign-related foundations within the scope of management prescribed by foundation laws. The "Regulations" adapt to the new situation in the management of foreign-related civil organizations, incorporate foreign-related foundations into the legal framework for the management of domestic civil organizations, and conduct registration and management in accordance with the law. The "Regulations" impose no country, domestic or overseas restrictions on the establishment of foundations. Foreigners and residents of Hong Kong, Macao and Taiwan are allowed to set up foundations in China, overseas foundations are allowed to set up representative offices in mainland my country, and overseas funds are encouraged to enter the country to carry out public welfare activities. These regulations not only solve the problems of the establishment and management of foreign-related foundations and strive for more external support for the development of my country's public welfare undertakings, but also provide a basis for the further revision and promulgation of the "Regulations on the Registration and Management of Social Groups" and the "Interim Regulations on the Registration and Management of Private Non-Enterprise Units" in the future. Regulations", which determines issues such as the establishment, management and legal status of foreign-related civil organizations, and has made useful policy and practical explorations. The Regulations incorporate the management of the activities of overseas foundations in China into the management framework of domestic civil organizations, and stipulate that representative offices of overseas foundations should engage in public welfare activities that are consistent with the nature of my country's public welfare undertakings. Overseas foundations shall bear civil liability for the civil acts of their representative offices in mainland my country in accordance with Chinese laws. Considering that my country is a developing country with a heavy burden on public welfare and limited fundraising resources, the Regulations also require that representative offices of overseas foundations are not allowed to organize fund-raising or accept donations in my country.
4. The "Regulations" make open provisions on the methods of maintaining and increasing the value of funds. Preserving and increasing the value of the foundation is the focus of the foundation's operation. If the regulations are too strict, the foundation will lack vitality; if the regulations are too loose, the risk of maintaining and increasing the value of the foundation will increase. This is a policy dilemma that is difficult to grasp.
The situations of foundations vary widely, and it is difficult to adapt specific regulations on value preservation and appreciation to every foundation. Therefore, the "Regulations" formulate rules in accordance with international practice and do not set specific requirements for the foundation's value preservation and appreciation behavior. It only makes principled and open provisions, and strives to solve the constraints on the foundation's investment behavior through social supervision and internal supervision. At the same time, Added "error compensation" clause. It stipulates that if the foundation's property is lost due to improper decision-making, the directors who participated in the decision-making shall bear corresponding liability for compensation to ensure that the foundation acts prudently in its investment behavior.
5. The Regulations encourage foundations to raise funds, engage in public welfare activities, and form a virtuous cycle mechanism for the operation of their own funds. The foundation's ability to raise funds and operate funds is the key to ensuring its survival and development. Only by raising a large amount of funds can a foundation achieve the public welfare purpose pursued by its charter to the greatest extent. At present, many foundations are not good at fundraising, rarely carry out impactful public welfare activities, and are gradually shrinking due to lack of vitality. Some successful foundations often form their own virtuous cycle mechanism by establishing a good social image. In order to gradually achieve this goal, the "Regulations" have made institutional provisions to ensure that the foundation's annual public welfare expenditures are an important criterion for measuring whether the foundation has completed its public welfare tasks. Expenditures for public welfare undertakings shall not be less than 70% of the total income of the previous year; annual expenditures for public welfare undertakings stipulated in the charter of non-public foundations shall not be less than 8% of the fund balance of the previous year; expenditures for public welfare undertakings shall not be completed in accordance with regulations If the amount is exceeded, you will be punished until it is revoked. It can be seen from this that foundations that only have a name and do not engage in actual public welfare activities will find it difficult to have the basis and conditions for legal survival in the future.
6． The Regulations establish the principles of openness and transparency and further improve the supervision and management mechanism. Article 5 of the Regulations clarifies that “foundations that engage in public welfare activities in accordance with their charter shall abide by the principles of openness and transparency.” The Regulations also make corresponding provisions on government supervision and social supervision. For example, the "Regulations" clarify the respective responsibilities of registration management agencies and business supervisory units in terms of registration, daily supervision and annual inspections, and stipulates the detailed circumstances and corresponding legal responsibilities of various illegal activities. At the same time, the "Regulations" also stipulate that foundations must accept annual inspections and accept tax supervision and accounting supervision implemented by the tax and accounting authorities in accordance with the law; after passing the annual inspection by the registration management authority, the foundation must submit an annual work report Publish it on the media designated by the registration and management authority, and accept inquiries and supervision from the public; when a public fundraising foundation organizes a fundraiser, it shall announce to the public the public welfare activities it plans to carry out after raising funds and the detailed use plan of the funds; the foundation shall disclose to the public the remaining property when disposing of its remaining property. Social announcements, etc.
7. The Regulations emphasize the establishment of standardized internal self-discipline and restraint mechanisms within foundations. In view of the current situation that some foundations have insufficient internal regulations and unsound self-regulatory mechanisms, the Regulations require foundations to establish various self-regulatory systems with charters as the core, and based on the characteristics of public welfare legal person organizations, a specially established "organization" The chapter "Organization" clearly stipulates that the Board of Directors is the decision-making body of the Foundation, standardizes the composition and decision-making procedures of the Board of Directors, the establishment and functions of supervisors, and formulates rules to prevent internal personnel of the Foundation from conflicting interests with the foundation's public welfare purposes. The rules of the Foundation limit the number of directors who receive remuneration from the foundation, stipulate that supervisors and directors who do not hold full-time work in the foundation shall not receive remuneration from the foundation, and the legal representative of the foundation shall not serve as the legal representative of other organizations at the same time. Guide foundations to establish self-discipline and self-restraint mechanisms to standardize the foundation's behavior.
8． The Regulations clarify the principles of tax preferences and strengthen tax supervision. It is a common practice in various countries to use tax means to support and supervise foundations, and to provide tax incentives for foundations and their donors. Tax reduction and exemption measures constitute an important policy environment for the development of foundations and other organizations. Our country is still in the exploratory stage in this regard. In order to encourage the development of public welfare undertakings, our country has successively introduced some preferential tax policies, which have promoted the development of public welfare undertakings. However, these policy regulations are not systematic and are scattered in many relevant documents. During the implementation process, Many practical problems were encountered. Article 26 of the "Regulations" stipulates that "Foundations, donors, and beneficiaries may enjoy tax preferences in accordance with the provisions of laws and administrative regulations." This provision establishes the general principle of tax preferences and indicates that the foundation, donors, and beneficiaries All aspects can enjoy tax benefits in accordance with regulations. As for the specific measures for tax incentives, relevant departments are currently studying and formulating relevant regulations. While enjoying tax benefits, foundations must handle tax registration in accordance with the law and accept the supervision of the tax authorities. For foundations that have committed illegal acts, the tax authorities may also require them to make up for the tax exemptions they enjoyed during the period of the illegal acts. The Regulations encourage the development of foundations and strengthen the supervision of foundations through the affirmation of preferential tax policies.