On November 10, the newly revised "Foundation Management Regulations" were released. This is the first comprehensive revision of the regulations in the 22 years since its implementation. How to strengthen the credibility of the foundation? In addition to improving internal governance, what external supervision and legal responsibilities have been detailed? How to promote the healthy and orderly development of foundations under institutional regulations? In this episode of "News 1+1", the host connects with Lu Xin, dean of the Institute of Social Sciences and Dean of the Law School of Zhejiang University of Technology, to provide analysis and interpretation.
How to strengthen the credibility of the foundation?
Lu Xin, Dean of the Institute of Social Sciences and Dean of the Law School of Zhejiang University of Technology: I think the most important thing about this revision is the new provision in Article 1 to strengthen the foundation’s credibility. So the reason why this should be highlighted as the most important one is that it is essentially to strengthen the public welfare attribute of our foundation. This enhancement can be viewed from four aspects:
The first is to provide more detailed provisions on the establishment, change and termination of the foundation throughout its life cycle.
The second is to make detailed regulations on the decision-making, execution and supervision of the foundation’s internal activities.
The third is to make corresponding regulations on the entire process of the foundation’s activities, including its fundraising, use of donated property, and information disclosure.
Fourth, a series of more detailed and complete regulations have been made on the supervision of foundations.
It should be said that these four aspects of regulations are all centered on the credibility building of the foundation. Their purpose is to strengthen and improve the healthy operation of our foundation and ensure its healthy and orderly activities.
What does information disclosure include?
Lu Xin: I think the reason for the special chapter on information disclosure this time is actually to enhance its credibility. So this time in terms of credibility improvement, that is, when it comes to information disclosure, it mainly includes three aspects:
The first is that for the registration management department, it is clarified that the registration management department needs to make corresponding disclosures about foundation registration and related information. This is the responsibility of the registration management department.
The second is to clarify a series of contents that need to be disclosed for the foundation itself.
The third and very important thing is that from the perspective of the annual report system, the foundation is required to disclose its annual report to the public before May 31 every year, so as to accept the supervision of all parties in society.
It should be said that these three aspects are all revised in the direction of its openness and transparency, and their fundamental purpose is still around improving credibility.
What are the major changes in this revision from a regulatory perspective?
Lu Xin: I think there are three changes. First, from the perspective of the subject, it is from dual supervision to multi-party collaboration, that is, from the original emphasis on dual management of registration management agencies and business supervisory units, it is gradually transformed into a system of regulatory entities that is a trinity of government coordination, industry self-control, and social participation. This is the first point.
The second is that in the actual supervision process, we will find that the entire supervision has changed from focusing on annual inspections to a combination of multiple measures to ensure that supervision can be effectively implemented.
The third is regarding legal liability. In the past, some key provisions were mainly made. This time, it should be said that comprehensive coverage has been achieved, and relatively detailed provisions have been made for possible illegal activities. It can be said that in this revision, supervision and legal responsibilities should be improved in great detail.
What are the functions of the “double penalty system”?
Lu Xin: I think this "double penalty system" actually plays a major role in three aspects. The first is to solve the previous situation where foundations were responsible but individuals were not responsible, and ensure that both have corresponding responsibilities. The second is actually a kind of pressure on the inside of the foundation, that is, to ensure that the responsible persons within the foundation must carry out legal and compliant activities during the decision-making and implementation process. The third thing I think is to purify the industry, which is to truly retain those people who can perform their duties well in the foundation industry and ensure that foundations can operate and develop in an orderly and good manner.
How to promote the healthy and orderly development of the foundation?
Lv Xin: I think the core of this issue is to highlight specialization. This specialization is divided into three aspects. The first is the specialization of the purpose of the foundation. That is to say, our foundation should focus on a certain public welfare purpose, especially on some areas that are urgently needed by disadvantaged groups in society, and use these areas to carry out relevant activities, rather than seeking to be too big.
The second is the professionalization of governance, that is, in the implementation and supervision of decisions, in the establishment and operation of internal mechanisms, we must be professional and carry out activities in compliance with regulations.
The third is that the activity process should also be professionalized. From charity fundraising to donation use to information disclosure, it should be carried out in accordance with regulations. Some relevant regulations and requirements that can further enhance its credibility must be fulfilled, and corresponding related work must be done well.
