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80% of earthquake donations ended up in govt. coffers

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Yangcheng Evening News
August 12, 2009

Research conducted by a team led by professor Deng Guoshen of Tsinghua University indicates that of the 76.7 billion yuan worth of charity donations collected last year for the Sichuan earthquake victims, about 80% ended up in the government's coffers and was spent no differently than the government's regular tax income.

According to Deng, the local governments of the quake-stricken regions were the direct recipients of about 58% of the donations while about 31% were received by NGOs such as the Chinese Red Cross. Deng stated except for a small fraction of the donations which donors had specified must be used by NGOs, most of the money streamed into the government's bank accounts.

In some cases, NGOs were allowed the right to use part of the donation they received, but the uses were limited to participating in government reconstruction projects.

Part of the reason that the government played the role of "custodian" to the NGOs, according the report, is that Chinese NGOs lacks the execution ability, and unable to carry out tasks such as building schools or hospitals independently. "In the rest of the world, it is usually true that the governments buy service from NGOs, while in China, the reverse is true".

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