Tough love as tycoon makes charity contract
By Zhang Xuanchen |
March 10, 2011, Thursday
|
Print Edition
Print Edition
TO many, Cao Dewang, a billionaire glass-maker in southeast China, is merely one of a growing number of rich Chinese businessmen who stretch out their hands to distribute wealth to the needy over recent years.
But the chairman of Fujian-based Fuyao Glass Industry Group has become "the strictest one," as many called him, for forcing a foundation to lower its management fee and to sign an agreement to ensure his donation of 200 million yuan (US$30.4 million) would be used correctly, or he wouldn't open his wallet.
Last May, Cao agreed to deliver the money intended for 100,000 households in drought-affected southwest China only on the understanding that the China Foundation for Poverty Alleviation would lower its management fee to 3 percent of the total donation amount, -reported Beijing-based -business website portal Caing.com yesterday.
A foundation can charge up to 10 percent of donations as management fees, according to Chinese law, which meant that Cao saved 14 -million yuan for poor families.
Moreover, Cao included a penalty clause which said he was entitled to carry out -research to trace the donation in a contract he signed with the foundation.
A group of independent investigators were hired by Cao to interview 10 percent of all the families the donations were intended for.
If more than 1 percent of the donation didn't reach families, Cao had the right to seek 30 times that amount in compensation.
Also in the contract was a clause saying any money that was found not to have been received by families by the due date of November 30 last year should be returned to him.
The media was invited to wholly supervise the process and the foundation was also required by the contract to report updates about the donation every 10 days to Cao.
Chen Hongtao, an official with the foundation, said they had done much to meet Cao's criteria. They screened the identity of every villager, filtering out rich people or those with ties to the government.
The donation was a great success, as a report by an independent agency showed 92,150 families received 2,000 yuan each as planned.
Cao said that he eventually "felt satisfied" when he saw the agency's report.
But the chairman of Fujian-based Fuyao Glass Industry Group has become "the strictest one," as many called him, for forcing a foundation to lower its management fee and to sign an agreement to ensure his donation of 200 million yuan (US$30.4 million) would be used correctly, or he wouldn't open his wallet.
Last May, Cao agreed to deliver the money intended for 100,000 households in drought-affected southwest China only on the understanding that the China Foundation for Poverty Alleviation would lower its management fee to 3 percent of the total donation amount, -reported Beijing-based -business website portal Caing.com yesterday.
A foundation can charge up to 10 percent of donations as management fees, according to Chinese law, which meant that Cao saved 14 -million yuan for poor families.
Moreover, Cao included a penalty clause which said he was entitled to carry out -research to trace the donation in a contract he signed with the foundation.
A group of independent investigators were hired by Cao to interview 10 percent of all the families the donations were intended for.
If more than 1 percent of the donation didn't reach families, Cao had the right to seek 30 times that amount in compensation.
Also in the contract was a clause saying any money that was found not to have been received by families by the due date of November 30 last year should be returned to him.
The media was invited to wholly supervise the process and the foundation was also required by the contract to report updates about the donation every 10 days to Cao.
Chen Hongtao, an official with the foundation, said they had done much to meet Cao's criteria. They screened the identity of every villager, filtering out rich people or those with ties to the government.
The donation was a great success, as a report by an independent agency showed 92,150 families received 2,000 yuan each as planned.
Cao said that he eventually "felt satisfied" when he saw the agency's report.
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