Research On Fiscal System About Charitable Organization

Since the1970s, the "welfare crises" and recession in western countries had affected the status of Keynesian, which pushed the world to the crossroads. Then people seem to have more three choices. The first is the new liberalism which opposes Keynesian, attaches importance to the market forces, and leads to the privatization trend. The second is the way that government raises efficiency by changing means of governance. Partnership is one of the core means. The third is the so-called "Third Way" which combines advantages of governance and the market. Three choices all need charitable organizations to involve in providing all kinds of public goods. Therefore, academic community pay attention to the third sector, and so the amount of research results since the1970s is more than the past50years, which find a massive and invisible "the eighth largest economy in the world". Private non-profit sector have become the main tools to provide those services funded by the government, and the government also have become the main source to fund non-profit organizations. However, both background and level where governments support charitable organizations are different in the world.Charitable organizations in china came forth after reform and opening up. Chinese people didn’t much known about non-profit organization (NPO) until the1995when international NPO forum was held. Now people attach importance to NPO, but their development still lags far behind needs of economy and society. Our government during the key period of social transformation actively seeks governance innovation. Charitable organizations have the advantage in social management and taking over tasks formerly held by government, which makes them get opportunities to develop. Local governments have tried to devolve their tasks upon charitable organizations. The tax system is critical to the growth of charitable organizations, which was constituted during the tax system reform in1994. The current tax system favors charitable organizations for their status of "quasi-government departments, which not fully reflects the public welfare spirit of charitable organizations. With their development, the role of "quasi-governmental departments" is challenged. Changes of society and economy urge charitable organizations to accommodate. This dissertation tries to clear about the relation between finance and tax system and internal and external environment’s changes of charitable organizations, summarize and deeply analyze the way that government contract out public goods to charitable organizations and its advantages and disadvantages, look for the unique factors in china which influence social donation, and quantificationally analyze the function that finance and tax systems in China stimulate charitable organizations to grow.Charitable organizations in china aren’t plain sailing, which have experienced explosive growth in the early reform and opening up, recovery during the rectification, and development for the government reform. From their experience we can find that it is economic reform, civil society and economic development to promote the charitable organization solidly, while some system factor is variable, which played an important role during the early period, but now have lagged. At present, the external environment’s changes that government and institutions transform and Internet rises have become a new force to urge charitable organizations to grow, which is almost irresistible. So government needs to comply with the changes.Charitable organizations are favored by the tax system involving in, such as income tax, sales tax, VAT, property tax and so on. However, there are some problems in the preferential tax system including fragmentation of system, low legislative level, unreasonable tax-free qualification, tax discrimination, ineffective supervision, and misuse of preferential tax, which hinders its play. Financial support to charitable organizations from government has long been missing, and only a small number of charitable organizations can be funded. However, in the context of the government transformation and institutions reform, to meet the growing social demand for public services more and more local governments contract public goods out to charitable organizations, which is an opportunity to develop and in favor of them. That local governments explore modes of offering public services provides a new experience, and also shows some issues.The dissertation also analyzes the effect of the finance&tax system on charitable organizations. In theory, firm size, profit before taxation and advertising expenditures, as well as state-owned identity will impact on the corporate donation. Analysis on the donation data of27listed companies in Anhui Province from2009to2010shows that state-owned identity has the most important effect on corporate donation, followed by the debt ratio, and tax, while profit before taxation and advertising expenses have no obvious effect on corporate donation. The dissertation will indirectly research the role of tax on charitable organizations in China because their financial information is not accessible. Now there is a fact that different charitable organizations are offered different tax. The dissertation will make use of the preferential tax ratio which donors are offered, to represent the preferential tax ratio which charitable organizations are offered, samples the foundations in JiangSu Province in2010involving in poverty alleviation, disaster relief, education and health, tests the impact of preferential tax on charitable organizations, and finally finds that tax discrimination impacts charitable organizations, which also reflects the importance of preferential tax to some extent.Foreign countries have different historical traditions of funding charitable organizations due to the diverse legal backgrounds and political culture. The United States has always been considered as a hotbed of non-profit activities, British government and charitable organizations have a long-term relationship of cooperation, in Germany charitable organizations provides a large part of public goods, but they are in tension in South Korean, where Government’s funding to charitable organizations only reach the average level in developing countries. The level and relations are different in diverse countries, but there are some things in common which we can learn from, such as government-organizations cooperation on the rise, attaching importance to invest in organization capacity. We can also learn from foreign tax system about charitable organizations, such as a clear legal status, category management, operable measures, making use of tax system to guide the charitable organizations.In order to support charitable organizations, and promote the philanthropy, the dissertation tries to perfect the finance and tax system in terms of overall structure and specific measure, based on survey and analysis. There are structural problems in the system, which to perfect be systems engineering. So by way of playing the role of the system the design considers not only the system itself, but also some other factors such as "dual management system", organization governance, and information disclosure.Innovation in this article shows in the following two aspects. First, it is significant for society to develop charitable organizations. Especially in the context of government transformation and institutions reform, organizations and government are becoming an important partner to provide public services. However, organizations aren’t fully competent for undertaking public goods, which government contracts out. Dissertation systematically researches how finance and tax system supports charitable organizations, which is innovative in respect of topic. Second, it is still difficult to access charitable organizations data. Therefore, the dissertation indirectly measures the degree where system supports organizations on the basis of the investigation, which is conductive to reveal the system running.The deficiency of this article manifests in the following two aspects. First, the indirect measure can’t fully reveal how the finance and tax system urges the charitable organizations to develop. Second, how to support the charitable organizations is a complicated systematic project, which requires the diverse policy tools tied in with. This article researches the finance and tax tools, which is only part of this system, and so the proposals are still remain to be further strengthened in the systemic and operational aspects.