The Chinese government is trying to get more of the country’s wealthy to give to worthy causes. Yet international foundations that often work on similar social issues have found their efforts increasingly constrained in recent years.

The likes of tech giants Tencent, Alibaba and Pinduoduo have each pledged billions of dollars’ worth to causes like rural economic development and lifting up low-income groups — all in response to Xi Jinping’s renewed “common prosperity” drive.

The story is different, though, for foreign organizations working in such areas, despite the fact that some have had a presence in China for many years. 

“The [Chinese] government is putting pressure on big industries to donate, so there is a lot of pressure to set up foundations,” says Min Zhou, a sociology professor at University of California, Los Angeles, who researches Chinese philanthropy. “At the same time, there is a clamp down on foreign foundations. It is a paradox.”

International foundations have always had a relatively small presence in China. Even from 2011 to 2015, a more open period for foreign foundations than today, China was only the ninth biggest recipient of U.S. foundation money — with China grants equalling less than two percent of grants to the top recipient — according to one report. The Bill and Melinda Gates Foundation and the Ford Foundation are two of the biggest still working on-the ground there. Others, like the Carnegie Corporation of New York and George Soros’s Open Society Foundations (OSF), make China-related grants but do not have an in-country presence.

Even for those that remain, the world’s second-largest economy has become more inhospitable, particularly since 2017, when the government introduced a new Foreign NGO Law aimed at regulating overseas non-profit organizations’ activities more tightly. The law forced all foreign nonprofits, including foundations, to register with the Chinese government and to partner with a local Chinese organization, as well as to submit detailed reports on every grant or activity. It also gave China’s Ministry of Public Security responsibility for regulating and overseeing foreign foundations. 

This move has markedly changed the environment for these organizations, says Bertram Lang, a research associate in political science at Goethe University Frankfurt, who researches China’s non-profit sector. 

“If public security wants to, they can make it very hard for foreign foundations,” Lang says. “They can sit in on every event, and create a threatening atmosphere. The public security also can visit the offices at any point.”

Overseas foundations have had to rethink their China operations in response to the new law, says Jessica Batke, senior editor at ChinaFile, where she manages The China NGO Project. “It is hard to say how many left after the law or decided not to register, because we don’t have a good baseline and there are a lot of institutions who just don’t want to talk about it,” says Batke. “But it [the law] was 1,000 percent a turning point.” 

Those that have continued with substantial China programs have tended to be big, established foundations who have been more able to navigate political minefields. 

“Once you are registered, there is a pretty big administrative burden. You have to get everything approved,” says Elizabeth Knup, the Ford Foundation’s regional director in China. “If you don’t have the capacity, it is hard. Ford has a lot of capacity [and] we are pretty stable under the law now — our relationships are good.” 

The foundation grants that do make it through China’s system these days are closely aligned with government priorities. The Gates Foundation works primarily on health challenges, such as malaria prevention and pandemic response. It declined to comment for this article. The Ford Foundation, which gives $13 million in China annually, mostly focuses on the impact of Chinese economic power outside of China, in particular on communities in the Global South. 

By contrast, it is nearly impossible for foundations to work on what the Chinese government deems to be politically sensitive areas, like human rights or grassroots organizing, experts say. 

While never easy, such work has become much more difficult in China since Xi Jinping came to power in 2013. Thomas Kellogg, who ran the OSF’s East Asia program from 2008 to 2017 and is now the executive director of the Center for Asian Law at Georgetown University, says his initial goal at OSF was to focus on civil society work. “At the time, there were a lot of restrictions and it wasn’t easy, but it was possible. In retrospect, we should have realized that we had a fair amount of space in comparison to what has happened since.” 

That foundations now must adhere so closely to Chinese government priorities gives Kellogg pause. “There is a potential for organizations to stay in China and do good work in that context. But is the good work they are doing regime enhancing?” he asks. “There are no easy answers to those questions, and I imagine there is a high level of ambivalence from these organizations.” 

Increased scrutiny has made it harder for Chinese NGOs to take money from international foundations. “If they get foreign funding, that puts them on the radar,” says Shawn Shieh, an expert on civil society in China. “I hear this all the time from Chinese NGOs, if they receive foreign funding, they are visited [by the police] more often.”

Knup, of the Ford Foundation, says, “There is a level of scrutiny by the system. We are under scrutiny and they [the potential grantees] are under scrutiny. You can never know who did not ask for a grant.” 

The increasingly constrained space has also made it harder for exchanges between international foundations and Chinese foundations to occur that could benefit China’s still-developing charitable sector. 

Anthony Saich, director of Harvard’s Ash Center for Democratic Governance and Innovation and a former representative for the Ford Foundation in China until 1999, says such exchanges were common before the onset of Covid-19, after which U.S.-China relations deteriorated further. 

If they get foreign funding, that puts them on the radar… I hear this all the time from Chinese NGOs, if they receive foreign funding, they are visited [by the police] more often.

Shawn Shieh, an expert on civil society in China

“It is important for people in China to learn from global best practices, like how you structure a foundation, or how you create a mission statement,” he says. 

The lack of such exchanges could have a harmful impact more broadly, says Katherine Wilhelm, executive director of NYU’s U.S.-Asia Law Institute who used to work in Ford’s Beijing office.

“It is going to be important that international civil society is in China, providing an alternative to government and providing people-to-people relations,” says Wilhelm. “When government [level] relations are tough, they can still be a bridge. The worse the government and business relations are, it is more important that they are there.”

Stephen Del Rosso, director of international peace and security at the Carnegie Corporation of New York, says that given China “is so important on so many levels, it is receiving a small number of small private funders.” This may be due to China’s increasing affluence, which has led some foundations to question their mission in the country. Or Del Rosso adds, it may simply be because there are so many other issues, like climate change, to work on, even though “these all have a China element.” 

UCLA’s Zhou says some foundations will ultimately be able to continue operating in China if they are “politically savvy” and temper their aims. 

“If the goal is to change China, that won’t work,” she says. “You cannot expect immediate impact, you have to think about long term impact.”

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