A Chinese delegation on a recent East Coast tour to learn about the U.S. nonprofit and charitable giving sectors couldn’t believe that government controls of these entities were as loose as described, according to Richard Gelles, dean of the University of Pennsylvania’s School of Social Policy & Practice, who met with the delegates.
“They kept asking the same question that they couldn’t believe our answer to: ‘Tell us again how the government controls your nonprofits and philanthropic organizations,’” Gelles said. “When we said they are required to file a [Form] 990 and to abide by the tax code, they couldn’t believe that the controls are that loose.”
Gelles and Eileen Heisman (left), chief executive of the National Philanthropic Trust (NPT) and a lecturer at the school, described their impressions of the meeting in separate telephone interviews with AdvisorOne. Neither professed to be an expert in Chinese philanthropic practice.
“They are very eager to learn about the role of the philanthropic sector and the nonprofit sector in terms of how it works with the government or separate from the government to address social issues and problems,” Gelles said.
The delegation comprised about 25 national, provincial and local government officials and academics, Heisman said, who were keenly interested in governance and transparency issues. A grant to the School of Social Policy & Practice funded the trip.
“They were fascinated with the idea of community-based boards, boards of citizens who had the best of intentions who would govern charities that didn’t have a connection to the government,” she said.
“They were interested that these self-governing boards actually work effectively and were willing to abide by the law in a way that allowed them to be freestanding entities. How do the boards replace themselves? What do they do? Who appoints them? How do you get to be board chair?”
Heisman said the delegates wanted to know what would happen if she as a CEO had a disagreement with her board chairman. They asked how her salary was different from a for-profit salary.
She said they were especially interested in transparency rules the IRS imposes on charities: Form 990, self-dealing, “all the rules that regulate charities and that people were willing voluntarily to comply with. I talked about how a government audit of records works.” NPT was audited about five years ago.