Charity Organizations’ Legal Governance of For-Profit Activities

DOI: https://doi.org/10.62517/jel.202614321

Author(s)

Yarui Liu

Affiliation(s)

School of politics and law, Liaocheng University, Liaocheng, Shandong China.

Abstract

With the continuous development of charitable sector, it has become increasingly common for charity organizations to engage in for-profit activities. While this trend provides stable funding sources for organizations, it also brings risks of straying from public welfare purposes. Currently, China’s charity organizations face prominent challenges in their for-profit operations, including vague definition of such activities, inadequate regulatory mechanisms and insufficient tax policy incentives, which have led to declining public trust and sharp reductions in donations. By analyzing typical cases such as the Guo Meimei’s display of weatlth, the Song Qingling Foundation’s regulatory practices, and Li Yapeng’s foundation regulatory violations, this thesis thoroughly explores the risks and root causes arising from charity organizations’ for-profit activities. At the same time, drawing on advanced experience of the United States and the United Kingdom in governing charity organizations’ for-profit operations, this thesis proposes specific recommendations for improving China’s legal governance system for charity organizations’ commercial behaviors from three dimensions: clarifying the definition of commercial activities, strengthening the regulatory system and optimizing tax policies. Establishing a scientific and sound legal regulation system is the core to promote the healthy development of charitable organizations.

Keywords

Charity Organizations; For-profit Activities; Legal Governance; Supervision Mechanism; Tax Policy

References

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