Wu was addressing a November 2000 training seminar for NGO staff at Tsinghua University's NGO Research Centre. He said the law would be finalised `very soon'.
Another provision he mentioned would prohibit foundations from spending more than 7 per cent of donated funds on project management and overheads. More substantial endowments would, however, give foundations a better operating margin than most enjoy at present.
China currently has 76 national-level and some 1,700 provincial foundations. Most have only very small endowments, which were usually provided in the first place by government, and act as fundraising and/or project implementing agencies rather than grant giving bodies. They are required to cover overheads from the endowment interest, but have been experiencing extreme difficulty in doing so, given small endowment size and current low interest rates.
It is not immediately clear how many of the existing foundations would be able to raise the Yn5m necessary to register under the new rules. But many of the current bodies, such as the Marxism Leninism Foundation, are already seriously cash strapped and effectively moribund.
Wu added, however, that agencies which did not have sufficient cash to register as foundations would have the option of registering as `funds' instead.