Charitable giving a two-way street for corporations
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However, it should be pointed out that Chinese entrepreneurs have not fully utilized the 12 percent tax-free policy. This policy is a product of the development of public welfare.
A tax-free policy means that the business donates some money and the government exempts it from some tax, thus enterprise participates in public welfare with the support of government tax income. Moreover, for entrepreneurs, using charitable tax exemption can benefit themselves, others, the country and their offspring.
However, the challenge we face now is that many enterprises cannot make good use of this policy. One most obvious sign is that there are too few corporate foundations.
We are not good at establishing our own foundations by taking advantage of the policy. At the same time, enterprises are complaining "Why do charity organizations ask us for donations? Why is their information not transparent?"
In fact, why don't enterprises build their own foundations? With their own foundations, they will feel safe in giving.
I suggest that all entrepreneurs should calculate the tax-free amount of their own corporate donations and make it clear whether they have made use of the government incentive policies.
This also shows that the support system for Chinese public welfare is not perfect. We can not simply think that national policy can be easily implemented. It requires support from many aspects, including tax calculation, financial considerations, and project design. The social atmosphere and the dissemination of success stories also need to improve.
Chinese enterprises need to wisely use the current policies and become bigger, better and more international corporate citizens. The amount donated in 2009 was only 50 billion yuan ($7.5 billion), but the future potential is much greater.
If businesses can be extensively involved in charity and establish various types of foundations, the development of charitable resources in China will soon be changed.
The author is director of One Foundation Philanthropy Research Institute of Beijing Normal University. The article is taken from a talk at the "2010 China Corporate Citizen Forum." forum@globaltimes.com.cn
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