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n incumbent senior officials occupy key posts in most Chinese charity organizations. For example, Chen Tiedi, president of the Shanghai Charity Foundation, was once the head of the Shanghai Municipal People’s Congress, the top local legislature; and several of the 20-plus vice presidents are incumbent Party or government officials whose influence is crucial for the foundation. Ruan Guangming, the secretary-general of the Shanghai Education Development Foundation, said that top municipal leaders convened the first meeting of his foundation. Representatives from various departments of the Shanghai municipal government were present and were lobbied to donate 17 million Yuan (US$2.1 million), the first sum of money the foundation obtained. South China’s Guangdong Province once organized a parade to appeal for donations for education. Led by top local leaders, the event mobilized an estimated one million citizens and all the major local media. Any enterprise willing to donate 400,000 Yuan (US$48,385) was allotted a float in the parade. At intervals in the parade, local leaders showed off their talents in calligraphy and painting. A company could acquire a calligraphic rendering of its name, executed by the hand of a top local leader, by making a donation of 300,000 Yuan. Many companies were happy to come up with the cash, as it was a very low price to pay for the amount of advertising and goodwill that accompanied the purchase. Sociologist Lu Hanlong says that charity should supplement private and government functions, but in China it is more an extension of the government. The system seems to be effective and efficient, but it can also dampen people’s enthusiasm: no one wants to feel forced to make a donation. Because some charity is hotbeds of irregularities and scandals, the government tries to regulate them very strictly. Employees’ salaries, administrative expenses and investment fund management are all tightly controlled. Charity organizations are generally required to invest funds in bank deposits to avoid risk. Spending on administration and lobbying is restricted, and many complain that it is too restricted. They cannot afford to organize essential promotional activities or hire qualified personnel, to the detriment of the charity and ultimately of the people they are supposed to help. However, in many countries charity is permitted to spend 10 to 40 percent of the money they raise on administration and promotion, far more than the current Chinese quota. The ceiling is set low in China for fear that high expenses will irk the public and damage the government’s image. The newly promulgated Regulation on Administration of Foundations requires charity to limit spending on administrative activities and employees’ salaries to 10 percent of total annual expenditure. “Since foundations bear official stamps,” says Ruan Guangming, “the first thing the government thinks of is to protect its own image.” The new regulation clarifies the government’s role by saying that civil servants should not hold important positions in charity organizations, but that the organizations should still be subject to the leadership of certain government departments. Why the actuality can occur in China? Chinese people are not short of compassion but channels of donations have become a bottleneck. The lack of good charity projects is another problem many are in place for a short time and fail to generate long-term benefits a good project should enable benefi