Special Report: Corporate Social Responsibility

Corporate Responsibility in China: Best Practices

by US-China Business Council Staff

Since the US-China Business Council published its first report in 2006 on corporate social responsibility (CSR) in China, beliefs about and programs related to CSR have changed in China's rapidly developing economy. The view that corporations, especially multinational corporations (MNCs), have responsibilities to the community has gained traction among the public, government, and business community, and numerous events have reinforced this perception, including food- and product-safety scares, labor scandals, environmental challenges, a devastating earthquake in Sichuan, and the Beijing Olympics.

In responding to these events and the changes they have brought to China's operating environment, MNCs are continually seeking new ways of putting their CSR principles into practice to deliver tangible results for their markets and communities. In the process, they have learned new lessons in areas such as transparency, compliance, internal structure, program expansion, and consumer rights. They have also learned more about engaging nongovernmental organizations (NGOs). This CSR best practices guide will introduce some of these new lessons and suggest new directions companies can take as CSR gains greater importance in China.

Changing views of CSR

As MNCs deepen their involvement in China, they have increasingly been expected to contribute to the public good. The 2007 Edelman Stakeholder Study found that 50 percent of key Chinese stakeholders believed that responsible companies should be engaged in community welfare, an increase of 15 percent over the previous year. The tragic Sichuan earthquake in May 2008 highlighted rising expectations, as some MNCs were accused of insufficient generosity or timeliness in their monetary donations, even as foreign companies—like all segments of society—provided an unprecedented outpouring of support for relief efforts.

Rising expectations about disaster relief participation are just one aspect of a more complex, and perhaps conflicted, public perception of CSR. It is clear that CSR strategies based solely on donations are insufficient and that a more hands-on role is expected of companies. For example, an Ipsos study conducted shortly after the Sichuan earthquake indicated that most Chinese respondents believed companies' reputations should not be based on how much money they donated to relief efforts. Nevertheless, more than half of respondents thought MNCs should take a greater role in shouldering social responsibilities in return for the success they have found in China. In this changing environment, leading foreign companies should consider ways to continuously enhance their contributions to the public good.

Interest in CSR is also growing among Chinese enterprises. A March 2008 survey by Fortune China and AccountAbility indicated that more than 75 percent of Chinese business executives believe social and environmental responsibility can improve business performance over the long run. Domestic corporations, including major state-owned enterprises (SOEs) such as China Mobile Ltd. and China Petroleum and Chemical Corp. (Sinopec) are now issuing their own CSR reports, reflecting the growing importance of being perceived as a responsible business in China domestically and abroad. All this suggests that MNCs' activities in China, which include bringing their global standards to China, may be earning broader recognition within China of their role as positive social actors. The "business case" for stronger market performance through responsible behavior in China is thus more compelling than ever.

Expanding CSR platforms

For many companies, CSR in China has moved far beyond initiatives developed at headquarters aimed primarily at philanthropy and media exposure. Increasingly sophisticated operations in China, growing expectation of social responsibility among consumers and business leaders, stronger government focus on issues such as labor and environment, and greater global awareness of "sustainability" translate into more impetus and opportunity to generate CSR momentum within the company and extend its external impact. Although each company's path to developing a suitable CSR structure will vary, leading companies are increasing their efforts in the following key areas.

Structuring CSR responsibility: Concentration vs. diffusion

Companies that expand their CSR programs and make them more strategic must think carefully about how to structure responsibility for these programs. Companies may decide to concentrate authority for managing CSR under a single CSR leader housed in the Communications or Government Affairs departments, or who reports directly to the China head. This individual often has responsibility for overall CSR program coordination, budget and partner management, and internal and external CSR communication. Such a position also introduces a CSR "champion" who "sells" CSR programs to business unit leaders. Although this approach works well in companies with decentralized business units that can benefit from joint programs and numerous strong partnerships, it can shift responsibility for CSR from managers throughout the company onto a single person.

Another option is to distribute CSR responsibility among business unit managers—and set measurable objectives such as hours spent managing CSR, number of team volunteer hours, and incentives for designing and executing local programs—to encourage their leadership in CSR. The challenge for this approach is ensuring that upper-level managers remain committed to CSR activities and that CSR commitments are adequately met. Companies must first examine their own structure, current CSR culture, and CSR goals when determining whether to concentrate or diffuse CSR roles.

Maximizing CSR momentum from the ground up

The explosion of volunteerism among Chinese employees following the Sichuan earthquake highlighted a trend that most successful CSR leaders have already noticed: employees increasingly wish to contribute to their community. Companies that have encouraged employees to design and participate in CSR programs have often been surprised by the strong response received. When forming such programs, companies should

Strike an appropriate balance between global CSR priorities and local needs and issues that resonate with China staff. There may be a significant difference between corporate and local staff CSR goals;
Grant programming and budget autonomy to local company CSR leaders or committees where possible and require clear performance indicators to ensure impact;
Evaluate the maturity of the current CSR platform for local, employee-led programs—and seek senior leadership support for them. If the company is not yet ready to take this step, senior leaders with CSR responsibility should plan how to reach this goal; and
Maximize volunteer and team-building opportunities whenever possible to extend sense of ownership and build and sustain interest in CSR efforts.

Interacting with the PRC government

CSR programs in China have often been viewed as a government relations platform, and government agencies have proven strong partners in community-oriented CSR programs. Some companies are now exploring partnering with government agencies to assist in their efforts to improve local labor, environmental, product quality, and other enforcement capabilities. By engaging government and industry through public-private partnerships—either individually or with a group of companies—leading companies can introduce global best practices in these and other areas. Such cooperation helps raise industry standards while strengthening government relationships, differentiating foreign companies in their markets, and supporting business development efforts.

Promoting sustainability

In light of growing public interest in environmental protection and new government regulations, companies should examine ways to make themselves more "sustainable." Many companies seek to minimize waste and energy consumption in design and production; CSR leaders are extending these principles across their products' life cycles, as well as working with upstream suppliers to increase resource efficiency and reduce related costs. CSR leaders have a variety of options for stand-alone initiatives or for incorporating greater sustainability into their current projects. For instance, they could

Encourage and reward employees for identifying new ways of conserving resources and energy in all aspects of their work;
Develop recycling programs and create incentives for customers to use them; and
Foster public-private partnerships or collaboration with other companies to develop new sustainable practices for the industry or product chain. For example, retailers can collaborate with producers up the supply chain to reduce unnecessary packaging, increase fuel efficiency of transport fleets, and develop effective packaging materials reuse loops.

No matter how or to what extent a company expands its CSR programs in China, the key factor to success remains sustained support from the top. Senior executives who view CSR as a strategic issue, incorporate it into strategic planning, and demonstrate strong interest through close attention to program progress will, in turn, generate far greater interest and support among employees.

Transparency in partnerships

Many China CSR projects are undertaken in partnership with NGOs for reasons of legitimacy, logistics, and expertise. Though companies often prefer to partner with international NGOs they have worked with in other countries, local conditions often call for cooperation with local NGOs and government agencies to implement CSR initiatives. Domestic NGO and government attitudes toward partnerships are changing as NGOs and the government become more familiar with MNC approaches to CSR, and an increasing number of options are available to MNCs seeking effective, long-term partnerships.

Successful CSR initiatives demand great care in partner selection. When evaluating partnerships, companies should

Allocate resources to conduct due diligence;
Carefully articulate measurable objectives to their potential partners;
Seek NGO partners with a track record of successful project implementation, efficient and transparent use of resources, proven flexibility, and competent management capable of reaching objectives;
Evaluate processes for the NGO to clearly communicate its own expectations and abilities;
Ensure that NGO partners can build a program that helps the company meet its needs, rather than relying on an existing project that may not align with company interests;
Assess the NGO's management ability, particularly to scale up a new program;
Ensure that partners can accommodate employee volunteer programs; and
Evaluate partners' communication ability, especially the ability to conduct regular reporting and familiarity with doing so.

Ensuring transparency in the potential partner's management remains a top priority for MNCs when selecting partners. Most international NGOs have high transparency standards and will be able to account for all funding expenditures. Domestic NGOs, on the other hand, often lack international-standard accounting systems, thus complicating project implementation and raising costs. Also, many international and domestic NGOs have difficulty registering with the Ministry of Civil Affairs, severely curtailing their ability to develop financial infrastructure, such as institutional accounts and receipts, to support a high degree of transparency (see Setting Up International Nonprofit Organizations in China).

Over time, MNCs have developed solutions to cope with this potential problem, including:

Using third-party international NGOs that can provide audits of projects executed through local partners;
Building audit and reporting requirements and related fee structures into the memoranda of understanding (MOU) with the domestic groups so that all parties are clear on transparency expectations and mechanisms in advance; and
Seeking multiple partners for project implementation, with a registered domestic nonprofit (usually a government-organized NGO or major foundation) channeling funds through its accounts and issuing the necessary receipts (see "New Charitable Donation Regulations"), and other organizations with strong on-the-ground operational capabilities responsible for actual implementation and progress reporting. The registered channeling organization may charge a small administrative fee, but this approach can considerably increase financial and operational efficiency.

Improving supplier audit systems

Compliance with local labor and environmental laws and corporate codes of conduct (COCs), a key pillar of CSR, is an area of focus for companies operating in China. Following recent food and product quality scares, corporate supply chain management is under closer public scrutiny, and a growing sense of corporate responsibility means that companies will need to allocate more resources to supporting suppliers—directly and through industry and government collaboration—in their compliance efforts.

Auditing, while not perfect, remains a core tool for reaching this goal, and many companies and auditing firms have made enormous strides in developing effective programs. Unscrupulous suppliers have, however, also found more sophisticated means of dodging COC monitoring. For example, some suppliers have outsourced production orders without notifying the customer, thus presenting the appearance of compliant facilities and operations, with production taking place elsewhere.

Auditors—whether in-house or third party—must be aware of these and other tactics for audits to be successful. Companies should continually seek ways to improve supply chain monitoring and control, including:

Requiring audits as a precondition for orders;
Adhering strictly to zero-tolerance policies for critical violations, such as child labor;
Ensuring that audits not only criticize failures to meet criteria, but also note areas where improvement is needed and provide realistic steps to achieve such improvements;
Providing support—such as management training, systems development, and educational materials for employees—for suppliers to improve on shortcomings detected in audits; and
Avoiding "audit fatigue"—overburdening suppliers with a constant flow of audits—by streamlining and combining audits across business units and cooperating with other customers of the supplier where possible.

Companies should consider extending their supplier-support efforts beyond audits to ensure supplier quality and social compliance. Some ways to do this include:

Tracking supplier audits through global sourcing websites to improve coordination and prevent audit fatigue, tracking progress on improvements, and keeping updated supplier compliance profiles;
Actively engaging chief executives of supplier facilities to raise their CSR awareness and secure their support for compliance improvement efforts among lower-level executives;
Partnering with key suppliers to assist them in extending the company's COC to their own suppliers to promote ethical sourcing further up the supply chain;
Providing platforms to address other key supplier issues, such as increasing energy efficiency, that benefit society and bottom lines; and
Working with local government agencies to improve standards and raise their own auditing and enforcement capabilities.

China's New Charitable Donation Regulations

Among the CSR-related changes introduced by the Enterprise Income Tax (EIT) Law and its related implementing regulations, which took effect in January 2008, is the raising of tax-deductible "public interest" donation caps. Initially capped at 3 percent for foreign enterprises, the EIT now permits all enterprises to deduct up to 12 percent of their annual income from taxation through donation to qualified organizations.

The EIT, its implementing regulations, and Circular 6 (Notice on Tax-Deductible Charitable Donation Policy and Related Questions) from the Ministry of Finance (MOF) and State Administration of Taxation (SAT) define which organizations qualify for receipt of tax-deductible donations:

The recipient is a "social organization"-China's legal term for nonprofit groups-or foundation that is registered with the Ministry of Civil Affairs at a provincial or national level. It may also be a county-level or higher government agency; or
The recipient has received approval to accept tax-deductible donations from its provincial or national-level MOF and SAT bodies (government-agency recipients are exempted from this requirement). Applying organizations must have a clear nonprofit status, an objective of serving the public good, legal-person status, legal management and operation of their assets, and no donor ownership of assets or donor participation in the distribution of donations.

Only donations made to organizations that qualify under these rules will be considered tax-deductible under the EIT regime. USCBC recommends that companies inquire with potential donor recipients and their governing tax bodies (provincial or national, depending on their level of registration) to ensure tax-deductible eligibility prior to making a donation. All tax-deductible donations should be accompanied by an official donation receipt. This receipt will be necessary to claim a tax deduction, and as qualified recipient organizations are legally required to issue these receipts upon receiving donations, unwillingness to issue a receipt is a strong indicator of much more serious transparency problems.

This article is adapted from a US-China Business Council report, Corporate Responsibility in China; Best Practices 2008. For additional information on CSR in China, please see the Corporate Social Responsibility section of USCBC's website: www.uschina.org/corporateresponsibility.html

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	Print Article Special Report: Corporate Social Responsibility Corporate Responsibility in China: Best Practices by US-China Business Council Staff Since the US-China Business Council published its first report in 2006 on corporate social responsibility (CSR) in China, beliefs about and programs related to CSR have changed in China's rapidly developing economy. The view that corporations, especially multinational corporations (MNCs), have responsibilities to the community has gained traction among the public, government, and business community, and numerous events have reinforced this perception, including food- and product-safety scares, labor scandals, environmental challenges, a devastating earthquake in Sichuan, and the Beijing Olympics. In responding to these events and the changes they have brought to China's operating environment, MNCs are continually seeking new ways of putting their CSR principles into practice to deliver tangible results for their markets and communities. In the process, they have learned new lessons in areas such as transparency, compliance, internal structure, program expansion, and consumer rights. They have also learned more about engaging nongovernmental organizations (NGOs). This CSR best practices guide will introduce some of these new lessons and suggest new directions companies can take as CSR gains greater importance in China. Changing views of CSR As MNCs deepen their involvement in China, they have increasingly been expected to contribute to the public good. The 2007 Edelman Stakeholder Study found that 50 percent of key Chinese stakeholders believed that responsible companies should be engaged in community welfare, an increase of 15 percent over the previous year. The tragic Sichuan earthquake in May 2008 highlighted rising expectations, as some MNCs were accused of insufficient generosity or timeliness in their monetary donations, even as foreign companies—like all segments of society—provided an unprecedented outpouring of support for relief efforts. Rising expectations about disaster relief participation are just one aspect of a more complex, and perhaps conflicted, public perception of CSR. It is clear that CSR strategies based solely on donations are insufficient and that a more hands-on role is expected of companies. For example, an Ipsos study conducted shortly after the Sichuan earthquake indicated that most Chinese respondents believed companies' reputations should not be based on how much money they donated to relief efforts. Nevertheless, more than half of respondents thought MNCs should take a greater role in shouldering social responsibilities in return for the success they have found in China. In this changing environment, leading foreign companies should consider ways to continuously enhance their contributions to the public good. Interest in CSR is also growing among Chinese enterprises. A March 2008 survey by Fortune China and AccountAbility indicated that more than 75 percent of Chinese business executives believe social and environmental responsibility can improve business performance over the long run. Domestic corporations, including major state-owned enterprises (SOEs) such as China Mobile Ltd. and China Petroleum and Chemical Corp. (Sinopec) are now issuing their own CSR reports, reflecting the growing importance of being perceived as a responsible business in China domestically and abroad. All this suggests that MNCs' activities in China, which include bringing their global standards to China, may be earning broader recognition within China of their role as positive social actors. The "business case" for stronger market performance through responsible behavior in China is thus more compelling than ever. Expanding CSR platforms For many companies, CSR in China has moved far beyond initiatives developed at headquarters aimed primarily at philanthropy and media exposure. Increasingly sophisticated operations in China, growing expectation of social responsibility among consumers and business leaders, stronger government focus on issues such as labor and environment, and greater global awareness of "sustainability" translate into more impetus and opportunity to generate CSR momentum within the company and extend its external impact. Although each company's path to developing a suitable CSR structure will vary, leading companies are increasing their efforts in the following key areas. Structuring CSR responsibility: Concentration vs. diffusion Companies that expand their CSR programs and make them more strategic must think carefully about how to structure responsibility for these programs. Companies may decide to concentrate authority for managing CSR under a single CSR leader housed in the Communications or Government Affairs departments, or who reports directly to the China head. This individual often has responsibility for overall CSR program coordination, budget and partner management, and internal and external CSR communication. Such a position also introduces a CSR "champion" who "sells" CSR programs to business unit leaders. Although this approach works well in companies with decentralized business units that can benefit from joint programs and numerous strong partnerships, it can shift responsibility for CSR from managers throughout the company onto a single person. Another option is to distribute CSR responsibility among business unit managers—and set measurable objectives such as hours spent managing CSR, number of team volunteer hours, and incentives for designing and executing local programs—to encourage their leadership in CSR. The challenge for this approach is ensuring that upper-level managers remain committed to CSR activities and that CSR commitments are adequately met. Companies must first examine their own structure, current CSR culture, and CSR goals when determining whether to concentrate or diffuse CSR roles. Maximizing CSR momentum from the ground up The explosion of volunteerism among Chinese employees following the Sichuan earthquake highlighted a trend that most successful CSR leaders have already noticed: employees increasingly wish to contribute to their community. Companies that have encouraged employees to design and participate in CSR programs have often been surprised by the strong response received. When forming such programs, companies should Strike an appropriate balance between global CSR priorities and local needs and issues that resonate with China staff. There may be a significant difference between corporate and local staff CSR goals; Grant programming and budget autonomy to local company CSR leaders or committees where possible and require clear performance indicators to ensure impact; Evaluate the maturity of the current CSR platform for local, employee-led programs—and seek senior leadership support for them. If the company is not yet ready to take this step, senior leaders with CSR responsibility should plan how to reach this goal; and Maximize volunteer and team-building opportunities whenever possible to extend sense of ownership and build and sustain interest in CSR efforts. Interacting with the PRC government CSR programs in China have often been viewed as a government relations platform, and government agencies have proven strong partners in community-oriented CSR programs. Some companies are now exploring partnering with government agencies to assist in their efforts to improve local labor, environmental, product quality, and other enforcement capabilities. By engaging government and industry through public-private partnerships—either individually or with a group of companies—leading companies can introduce global best practices in these and other areas. Such cooperation helps raise industry standards while strengthening government relationships, differentiating foreign companies in their markets, and supporting business development efforts. Promoting sustainability In light of growing public interest in environmental protection and new government regulations, companies should examine ways to make themselves more "sustainable." Many companies seek to minimize waste and energy consumption in design and production; CSR leaders are extending these principles across their products' life cycles, as well as working with upstream suppliers to increase resource efficiency and reduce related costs. CSR leaders have a variety of options for stand-alone initiatives or for incorporating greater sustainability into their current projects. For instance, they could Encourage and reward employees for identifying new ways of conserving resources and energy in all aspects of their work; Develop recycling programs and create incentives for customers to use them; and Foster public-private partnerships or collaboration with other companies to develop new sustainable practices for the industry or product chain. For example, retailers can collaborate with producers up the supply chain to reduce unnecessary packaging, increase fuel efficiency of transport fleets, and develop effective packaging materials reuse loops. No matter how or to what extent a company expands its CSR programs in China, the key factor to success remains sustained support from the top. Senior executives who view CSR as a strategic issue, incorporate it into strategic planning, and demonstrate strong interest through close attention to program progress will, in turn, generate far greater interest and support among employees. Transparency in partnerships Many China CSR projects are undertaken in partnership with NGOs for reasons of legitimacy, logistics, and expertise. Though companies often prefer to partner with international NGOs they have worked with in other countries, local conditions often call for cooperation with local NGOs and government agencies to implement CSR initiatives. Domestic NGO and government attitudes toward partnerships are changing as NGOs and the government become more familiar with MNC approaches to CSR, and an increasing number of options are available to MNCs seeking effective, long-term partnerships. Successful CSR initiatives demand great care in partner selection. When evaluating partnerships, companies should Allocate resources to conduct due diligence; Carefully articulate measurable objectives to their potential partners; Seek NGO partners with a track record of successful project implementation, efficient and transparent use of resources, proven flexibility, and competent management capable of reaching objectives; Evaluate processes for the NGO to clearly communicate its own expectations and abilities; Ensure that NGO partners can build a program that helps the company meet its needs, rather than relying on an existing project that may not align with company interests; Assess the NGO's management ability, particularly to scale up a new program; Ensure that partners can accommodate employee volunteer programs; and Evaluate partners' communication ability, especially the ability to conduct regular reporting and familiarity with doing so. Ensuring transparency in the potential partner's management remains a top priority for MNCs when selecting partners. Most international NGOs have high transparency standards and will be able to account for all funding expenditures. Domestic NGOs, on the other hand, often lack international-standard accounting systems, thus complicating project implementation and raising costs. Also, many international and domestic NGOs have difficulty registering with the Ministry of Civil Affairs, severely curtailing their ability to develop financial infrastructure, such as institutional accounts and receipts, to support a high degree of transparency (see Setting Up International Nonprofit Organizations in China). Over time, MNCs have developed solutions to cope with this potential problem, including: Using third-party international NGOs that can provide audits of projects executed through local partners; Building audit and reporting requirements and related fee structures into the memoranda of understanding (MOU) with the domestic groups so that all parties are clear on transparency expectations and mechanisms in advance; and Seeking multiple partners for project implementation, with a registered domestic nonprofit (usually a government-organized NGO or major foundation) channeling funds through its accounts and issuing the necessary receipts (see "New Charitable Donation Regulations"), and other organizations with strong on-the-ground operational capabilities responsible for actual implementation and progress reporting. The registered channeling organization may charge a small administrative fee, but this approach can considerably increase financial and operational efficiency. Improving supplier audit systems Compliance with local labor and environmental laws and corporate codes of conduct (COCs), a key pillar of CSR, is an area of focus for companies operating in China. Following recent food and product quality scares, corporate supply chain management is under closer public scrutiny, and a growing sense of corporate responsibility means that companies will need to allocate more resources to supporting suppliers—directly and through industry and government collaboration—in their compliance efforts. Auditing, while not perfect, remains a core tool for reaching this goal, and many companies and auditing firms have made enormous strides in developing effective programs. Unscrupulous suppliers have, however, also found more sophisticated means of dodging COC monitoring. For example, some suppliers have outsourced production orders without notifying the customer, thus presenting the appearance of compliant facilities and operations, with production taking place elsewhere. Auditors—whether in-house or third party—must be aware of these and other tactics for audits to be successful. Companies should continually seek ways to improve supply chain monitoring and control, including: Requiring audits as a precondition for orders; Adhering strictly to zero-tolerance policies for critical violations, such as child labor; Ensuring that audits not only criticize failures to meet criteria, but also note areas where improvement is needed and provide realistic steps to achieve such improvements; Providing support—such as management training, systems development, and educational materials for employees—for suppliers to improve on shortcomings detected in audits; and Avoiding "audit fatigue"—overburdening suppliers with a constant flow of audits—by streamlining and combining audits across business units and cooperating with other customers of the supplier where possible. Companies should consider extending their supplier-support efforts beyond audits to ensure supplier quality and social compliance. Some ways to do this include: Tracking supplier audits through global sourcing websites to improve coordination and prevent audit fatigue, tracking progress on improvements, and keeping updated supplier compliance profiles; Actively engaging chief executives of supplier facilities to raise their CSR awareness and secure their support for compliance improvement efforts among lower-level executives; Partnering with key suppliers to assist them in extending the company's COC to their own suppliers to promote ethical sourcing further up the supply chain; Providing platforms to address other key supplier issues, such as increasing energy efficiency, that benefit society and bottom lines; and Working with local government agencies to improve standards and raise their own auditing and enforcement capabilities. China's New Charitable Donation Regulations Among the CSR-related changes introduced by the Enterprise Income Tax (EIT) Law and its related implementing regulations, which took effect in January 2008, is the raising of tax-deductible "public interest" donation caps. Initially capped at 3 percent for foreign enterprises, the EIT now permits all enterprises to deduct up to 12 percent of their annual income from taxation through donation to qualified organizations. The EIT, its implementing regulations, and Circular 6 (Notice on Tax-Deductible Charitable Donation Policy and Related Questions) from the Ministry of Finance (MOF) and State Administration of Taxation (SAT) define which organizations qualify for receipt of tax-deductible donations: The recipient is a "social organization"-China's legal term for nonprofit groups-or foundation that is registered with the Ministry of Civil Affairs at a provincial or national level. It may also be a county-level or higher government agency; or The recipient has received approval to accept tax-deductible donations from its provincial or national-level MOF and SAT bodies (government-agency recipients are exempted from this requirement). Applying organizations must have a clear nonprofit status, an objective of serving the public good, legal-person status, legal management and operation of their assets, and no donor ownership of assets or donor participation in the distribution of donations. Only donations made to organizations that qualify under these rules will be considered tax-deductible under the EIT regime. USCBC recommends that companies inquire with potential donor recipients and their governing tax bodies (provincial or national, depending on their level of registration) to ensure tax-deductible eligibility prior to making a donation. All tax-deductible donations should be accompanied by an official donation receipt. This receipt will be necessary to claim a tax deduction, and as qualified recipient organizations are legally required to issue these receipts upon receiving donations, unwillingness to issue a receipt is a strong indicator of much more serious transparency problems. This article is adapted from a US-China Business Council report, Corporate Responsibility in China; Best Practices 2008. For additional information on CSR in China, please see the Corporate Social Responsibility section of USCBC's website: www.uschina.org/corporateresponsibility.html Further Reading Setting Up International Nonprofit Organizations in China Supporting Rule of Law in China Corporate Responsibility as China Strategy Copyright 2009 US-China Business Council Top of Page Table of Contents
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