Legal Basis And Institutional Construction Of Crowdfunding For Public Welfare

The development course of China’s public welfare undertakings is accompanied with “government-run” or “half government-run” nature with strong administrative color. With the rapid development of the society today, “government-run public welfare” and “government-run charity” are constantly denounced by people. In2011, a series of negative news of charitable organizations were frequently exposed,which severely destroyed the trust of the public in government-run charitable organizations. All of a sudden, charitable organizations became “target of public criticism” at that time. However, it whipped up a powerful accountability storm of public welfare and triggered the reflection of the society and academic circles on public welfare organizations and public welfare undertakings. At the same time, China’s non-governmental public welfare organizations ushered in rapid development. In 2011,domestic websites introduced crowdfunding mode for the first time. In 2013, the first website of crowdfunding for public welfare was established. As “universally beneficial public welfare”, crowdfunding for public welfare is promoting the new development of China’s public welfare undertakings by virtue of its characteristics and advantages including popularity, innovation, investment, transparency and interaction, pursuing the well-being of a more extensive range of human groups in an increasingly wider field and facilitating harmony among people, between people and the society as well as between people and nature.However, crowdfunding is faced with the danger of violating the law at any time in China. Crowdfunding for public welfare plays an embarrassing legal role, lacks effective supervision and goes against protecting the legitimate rights and interests of investors and beneficiaries only by means of self-discipline. As a result, the development of crowdfunding for public welfare faces a number of difficulties.Crowdfunding for public welfare cannot replace traditional public welfare, but it is an important supplement to traditional public welfare and plays an increasingly active role in the Internet age. Undeveloped, China’s public welfare undertakings are lacking in vitality. The public do not trust charitable organizations very much. Under such circumstances, it is necessary to promote the development of crowdfunding for publicwelfare and legalize crowdfunding for public welfare through establishing the relevant legal system of crowdfunding for public welfare as soon as possible. The healthy and sustainable development of crowdfunding for public welfare should be guaranteed through taking a series of measures including establishing to the access system of all parties participating in crowdfunding for public welfare and constructing the mechanism of information disclosure, social credit system, protection mechanism of personal information security and trusteeship mechanism of third-party payment.The first chapter is introduction which elaborates on the research background and significance of this paper, explains the comparison and definition of two concepts between “charity” and “public welfare” involved in this paper, makes clear the research content, thought and method of this paper and expounds the innovative points of this paper.The second chapter reviews the development course of China’s traditional public welfare undertakings, sets forth the change made by crowdfunding for public welfare to the concept of traditional public welfare and the new development of current situation of domestic and overseas crowdfunding for public welfare to the public welfare and points out that crowdfunding for public welfare is “public welfare of everyone, public welfare of popularity and universally beneficial public welfare” in the civil society.The third chapter respectively analyzes and expounds the rights and obligations of involved parties of crowdfunding for public welfare—crowdfunding platforms, project sponsors, investors and beneficiaries.The fourth chapter reveals the legitimacy problem faced by crowdfunding for public welfare which plays an embarrassing legal role without the recognition of relevant laws at present, and expounds possible risks including fraud financing, default of project sponsors and crowdfunding platforms’ setting up capital pools and violating the privacy right of related participants in the process of operating crowdfunding for public welfare.Through referring to the relevant experience of American “JOBS” Act, the fifth chapter makes several suggestions on the institutional construction of China’s crowdfunding for public welfare: The top priority is to legalize crowdfunding, construct the mechanism of information disclosure, social credit system and protection mechanism of personal information security, set up the access system of various parties involved in crowdfunding, build the trusteeship mechanism of third-party payment,realize the supervision of crowdfunding platforms and ensure the healthy operation of crowdfunding for public welfare.The sixth chapter points it out that the development of public welfare undertakings is in dire need of mobilizing the active participation of the most extensive grassroots social members. In the field of crowdfunding for public welfare, we start ourexploration almost simultaneously with developed countries. Developing countries may overtake developed countries and take advantage of new technologies, rules and innovative supervisory measures to build efficient and transparent non-governmental public welfare undertakings.