Online donations in China

While chatting at last Friday's Forum on Social Entrepreneurship and the Internet, I was asked about online donations in China. Since this question might be of interest to many organizations, I thought I would briefly write down what I know about this topic.

In some countries, it is quite common for small organizations to put a PayPal link on their website to seek donations. Since any organization or even individual can operate a PayPal account, this is easy to do. But in China there is no service similar to PayPal for transferring money online. Instead, some NGOs publish their bank account details on the web, and since quite a lot of Internet users have access to Internet banking and can perform bank transfers online, this could be considered a kind of "poor man's PayPal". But obviously it's not as convenient as a "Donate Now" button, and more importantly bank transfers attract service fees, meaning that if somebody wanted to give just a few yuan then they would be "donating" more money to the bank than to their charity of choice!

The infrastructure for safer and more convenient online payments is certainly present in China. However, it is likely to be out of the reach of most NGOs, not for technical reasons but for legal ones. Publicly seeking donations is not permitted in China, except for organizations registered as foundations. So although it is relatively easy for small companies to sell products online (often through a shopping portal such as Taobao.com), this is not possible for NGOs. Even the method described earlier, of publicly seeking donations via bank transfer, is technically illegal, although to my knowledge is it not well policed.

Registering as a foundation is not an option for most NGOs, as it is a difficult and costly process. There are only about 1800 such foundations in China, of which less than 100 operate at the national level (Source: Asia Pacific Philanthropy Consortium). These have a wide range of options for online fund-raising. For example, Gongyiwang (Link in Chinese) is a platform specifically designed for online donations from individuals to foundations, while One Foundation offers several methods for making donations, including simply by sending an SMS message on any mobile phone.

There may be some special cases in which smaller NGOs could receive online payments, for example if they raise funds through the sale of products. But in general, the barrier to online fund-raising is not technology, but law.