China’s charitable sector is entering a period of significant regulatory evolution.
Premier Li Qiang has signed a State Council decree announcing a comprehensive revision of the Regulations on the Management of Foundations, which will officially take effect on January 1, 2027. This update aims to modernize the oversight of foundations, addressing concerns regarding internal governance, transparency, and the integrity of public-interest activities.
The original regulations, in place since 2004, provided the initial framework for the growth of China’s non-profit sector. However, as the economic landscape has shifted, officials identified a clear need for a more robust oversight mechanism. According to the joint briefing provided by the Ministry of Justice and the Ministry of Civil Affairs, the revision is explicitly designed to align with the broader goals outlined in the 15th Five-Year Plan, ensuring that philanthropy remains both healthy and orderly.
The new text, which spans eight chapters and 79 articles as reported by TMTPost, reinforces the leadership of the Communist Party of China within the sector and mandates that all foundation activities adhere to principles of transparency, legality, and non-profit operation.
A central pillar of the new regulations is the push for public trust. To prevent conflicts of interest, the rules strictly prohibit foundations from providing financial returns to donors or their associated parties. The selection process for project executors and service providers must now be conducted in a strictly open and fair manner.
The regulations introduce a dedicated chapter on information disclosure, requiring foundations to be more accountable to the public and empowering registration authorities to supervise these disclosures more rigorously. Failure to comply will carry steeper penalties, including the introduction of “qualification penalties.”
The registration and management framework is also undergoing a structural change. While civil affairs departments at the municipal level and above remain the primary registration authorities, the new rules offer a more streamlined path for specific types of foundations. Those focused on poverty alleviation, elderly care, assistance for the disabled, medical aid, education support, or disaster relief may now apply for direct registration with provincial-level civil affairs departments.
The regulations introduce stricter requirements for founders and executives, including mandatory public disclosure before an individual assumes a leadership role. By explicitly outlining the responsibilities of boards of directors and supervisors, the government aims to curb the misuse of organizational power.
“The regulations emphasize that those in leadership positions must avoid conflicts of interest and are strictly prohibited from using their positions to damage the interests of the foundation, its beneficiaries, or the public,” according to the joint briefing provided by the Ministry of Justice and the Ministry of Civil Affairs.
The operational scope of these organizations will also face tighter scrutiny, particularly concerning fundraising and asset management. Foundations are now required to hold official qualifications for public fundraising, and all investment activities must prioritize safety and prudence, with all proceeds explicitly earmarked for public welfare purposes. The regulations mandate that foundations track the implementation of their projects, ensuring that outsourced work is subject to constant evaluation and oversight.
To ensure a smooth transition before the 2027 implementation date, the Ministry of Civil Affairs is preparing to launch a series of training initiatives and updated guidance documents. These efforts will include the release of a new “Model Articles of Association” for foundations to help organizations align their internal rules with the updated legal requirements.
The goal is to build a comprehensive regulatory ecosystem where registration authorities, business supervisors, and audit departments work in concert to monitor the financial health and operational compliance of foundations nationwide.
This regulatory shift reflects a trend toward professionalizing and securing the charitable sector. By tightening the rules on transparency and governance, the government is moving to ensure that the sector’s development since the original regulations took effect in 2004 is matched by an equally strong framework of accountability.
