Legal Regulatory Research Of Profit-Making Activities In Charitable Organizations

The aggressive investment of Soong Ching Ling Foundation in Henan province is one of the typical cases which are giving rise to widespread controversy during profit-making activities in China’s charitable organizations in recent years. It reflects the common problems in relevant processes and encourages people to rethink whether the business investment of charitable organizations is necessary or not. Currently, most of the charitable organizations in different countries, more or less, have difficulty in financing while a growing number of charitable organizations are choosing to be engaged in profit-making activities for raising funds. The present China’s relevant laws and regulations on this engaged in profit-making activities are still imperfect, which caused several problems such as aggressive investments, misappropriation of funds and so on. To change this situation, the gradual improvement of the regulatory system profit-making activities in China’s charitable organizations has been in priority. Based on the existing theory, reading literature, collecting basic data and analysis on the case, the paper studies the problems in profit-making activities in China’s charitable organizations by comparative way to give suggestions on regulation at the regulatory level, which is good for improving the regulations on profit-making in China’s charitable organizations and promoting the healthy and orderly development of the entire charities.This paper is divided into five parts. The first part briefly introduces the case of illegal lending in Soong Ching Ling Foundation in Henan province, to make a brief overview on the background of the structure and research methods; the second part points out the problem of " self-serving to make profits in the name of charity", illegal investments and week regulations; the third part explains the reasons of this case from three aspects including the legislation, taxation and supervision; the fourth part describes the outstanding regulatory experience in Hong Kong and the United States which can be used into charitable organizations in China; the fifth part focuses on putting forward the relevant policies and regulations based on China’s actual conditions.