Associations in China: Formation and Funding

Published on October 1, 2025 and written by Cyril Jarnias

The vibrant dynamics of China’s association development provide fertile ground for exploring the complex mechanisms of association creation and funding in this rapidly growing country. Behind the screen of rigorous policies lies a multifaceted landscape where collective aspirations collide with administrative and legal realities.

By embracing a spectrum ranging from small local NGOs to internationally-reaching organizations, understanding this phenomenon requires diving into its specificities and challenges. The captivating stories of association founders and inventive funding strategies open windows into a universe where citizen engagement strives to flourish despite institutional obstacles.

Guide to Creating Associations in China

Key Steps for Forming a Non-Profit Association in China

1. Choose the appropriate legal form
   Non-profit associations can take several forms:

• Social associations (社会团体, shehui tuanti)
• Social service organizations (社会服务机构, shehui fuwu jigou)
• Foundations (基金会, jijinhui)
• Public institutions (事业单位)

Verify eligibility

• The association must pursue non-profit purposes.
• Activities must not threaten national unity or have political or religious character.
• Minimum number of Chinese founding members required (typically 50 for a national social association).
• Prior approval from a supervising government agency necessary.

Prepare bylaws

• Draft bylaws defining purpose, governance, membership and exclusion procedures, member rights, etc.

Registration procedure

• Submit registration application to the Civil Affairs Bureau (Ministry of Civil Affairs for national associations, local bureaus for local associations).
• Provide: bylaws, list of founding members, identification documents, proof of address, activity plan, funding sources.

Review and validation

• Document review by supervising agency.
• Validation of leadership by competent authorities.
• Mandatory annual compliance and financial review.

Obtain registration certificate

• Official publication and start of legal activities.

Current Legislation

Law / Regulation	Scope	Key Points
Social Associations Law (1998, amended)	Creation and management of Chinese associations	Requirement for sponsoring agency, strict state control
Foreign NGO Law (2017)	Activities of foreign NGOs in China	Registration with police, limited and monitored activities
Charity Law (2016)	Charitable activities and fundraising	Charitable organization status, management fee limits

Involved Government Agencies

• Ministry of Civil Affairs: registration, supervision, annual review
• Sectoral departments: activity validation according to field
• Public security departments: for foreign NGOs

Tax Obligations and Financial Management

• Associations must maintain accounting compliant with standards.
• Management fee limitation to 10% of annual budget for charitable organizations.
• Financial transparency requirement: annual publication of accounts and activities.
• Tax status: partial exemption from certain taxes, but limited access to tax benefits.

Member Rights Protection

• Right to join, participate in general assembly, vote and be elected.
• Right to information about finances and management.
• Possibility of recourse in case of internal disputes.

Common Challenges Encountered

• Finding a sponsoring agency (essential for registration).
• Strict administrative control: leadership validation, monitored activities, reporting obligations.
• Difficulty for small local associations: law favors formal structures and effectively excludes many unregistered grassroots associations.
• Funding restrictions: limitation of foreign funding sources, high transparency requirements.

Practical Tips

• Ensure support from a recognized sponsoring agency.
• Prepare detailed bylaws compliant with legislation.
• Implement rigorous administrative and financial management.
• Prioritize transparency and dialogue with authorities.
• Consider local partnerships to strengthen legitimacy.

Concrete Examples of Existing Associations and Their Impact

Association	Field of Action	Illustrative Impact
One Foundation	Humanitarian aid, relief	Massive support during natural disasters
China Environmental Protection Foundation	Environment	National reforestation and ecological education programs
China Disabled Persons’ Federation	Rights of persons with disabilities	Rights advocacy and social integration

Key Points to Remember

• Registering an association in China requires government agency support and compliance with strict procedures.
• Transparency and management obligations are significant: any violation can lead to suspension or dissolution of the association.
• Despite challenges, some associations have significant impact, particularly in humanitarian and environmental fields, but their room for maneuver remains closely monitored.

Funding Challenges for Expatriate Associations

Traditional Funding Sources for Expatriate Associations in China:

Expatriate associations typically rely on the following sources:

• Member dues
• Government grants (local or foreign)
• Private donations (individuals, companies)
• Commercial activity revenues (heavily regulated)
• Investment interest

Funding Source	Description	Constraints in China
Member dues	Regular membership, stable base	Minimally impacted by local context
Government grants	French programs (e.g., STAFE), sometimes local	Restrictive selection, complex applications
Private donations	Donations from individuals or companies	Strict control of foreign flows
Commercial activities	Sales, events, services	Activities limited by legislation
Investment interest	Income from financial investments	Low returns, uncertain regulation

The Chinese economic environment makes access to foreign funds more difficult due to strengthened controls on financial flows and priority given to local actors. Local donations remain low compared to other countries.

Specific Obstacles to Association Funding in China:

• Legal restrictions:
  • Legislation on foreign NGOs and associations limiting foreign fund reception.
  • Need to obtain approvals and justify fund origins.
• Cultural differences:
  • Less developed tradition of private philanthropy in China.
  • Difficulties mobilizing local donors for causes perceived as foreign.
• Regulatory compliance:
  • Strict control of financial transfers.
  • Need to justify fund destinations and project nature.

Concrete Examples and Successful Strategies:

Couleurs de Chine: Relies on a network of individual sponsors/donors, often expatriates or from the diaspora, to fund children’s education and school construction. The association diversifies resources by also soliciting companies and conducting targeted campaigns.

A Pleines Mains: Generates funds through collection and resale of items (clothing, books, toys), enabling self-financing of local actions while limiting dependence on foreign funds.

Rotary Club Shanghai Elysée: Organizes fundraisers, often through charitable events involving the expatriate community and partner companies.

Diversifying Revenue Sources:

Diversifying resources is crucial for association resilience:

• Regular member dues, ensuring stable base.
• Private donations, enabling specific project funding.
• French government grants (e.g., STAFE), for educational, social or cultural projects.
• Partnerships with local or foreign companies, providing funding, skills sponsorship or in-kind donations.

Emerging Trends and Innovations:

• Crowdfunding: Using digital platforms to quickly mobilize funds from broad audiences, often for specific or emergency projects.
• Online fundraising: Developing campaigns on social media, reaching diaspora and international supporters.
• Hybrid partnerships: Collaborating with local NGOs to bypass certain legal restrictions, pool resources and benefit from better field knowledge.

Key takeaway:
The Chinese regulatory environment requires great agility and strong adaptability. Successful expatriate associations are those that diversify funding sources, rely on international networks, and innovate in fundraising methods while ensuring local compliance.

NGO Impact on China’s Association Landscape

The rise of NGOs in China fits into a recent dynamic, marked by economic reforms and the country’s opening starting in the 1980s. These non-governmental organizations multiplied during the transition toward a more pluralistic economy, gradually emerging from a strictly state model to address new social and environmental needs.

Historical Overview:

• The emergence of Chinese NGOs mainly dates from the last thirty years, driven by economic liberalization and development of a more diverse society.
• Initially suspected of being mere state extensions (GONGOs), they gradually gained real autonomy.
• Key moments like the Sichuan earthquake (2008) accelerated their appearance, favoring spontaneous creation of organizations directly from the population to address humanitarian emergencies.

Role in Association Development:

• NGOs play a driving role in structuring China’s association landscape:
  • They provide social services, compensate for state shortcomings (education, health, humanitarian aid).
  • They contribute to local development and social integration.
  • Some also serve as relays between citizens and public authorities to channel social demands or propose innovative solutions.

Preferred Activity Sectors:

Sector	Activity Examples
Environment	Ecological protection, urban pollution fight
Health	HIV/AIDS prevention, healthcare access
Education	Rural educational support
Social assistance	Orphan/migrant care
Emergencies	Disaster relief

Influence of Political and Economic Reforms:

Economic reforms opened new but regulated space for NGOs; their growth accompanied private sector growth.

The Communist Party has tolerated these structures as long as they don’t challenge its authority or develop overly strong contestatory power. This limits their critical capacity while favoring certain state cooperation on social or environmental grounds.

Impact of Government Policies on Cooperation/Competition with Other Local Associations:

The legal framework remains restrictive: frequent obligation to affiliate with official supervising organization (“dual system”), heavy administrative procedures.

Policies sometimes encourage cooperation when serving the official “social harmony” objective, but can also foster competition between associations to better control their activities or funding.

Synthetic list:

• Encouraged cooperation:
  • When ensuring deficient public service
  • To channel citizen initiatives toward national priorities
• Competition/inhibition:
  • Competition for public funding access
  • Increased controls limiting spontaneous emergence

Major Challenges Faced by Chinese NGOs:

Main obstacles:

• Significant legal restrictions, particularly since the Foreign NGO Law effective early 2017
• Constant need for stable funding while many still depend on either unstructured private donations or conditional state subsidies
• Advanced administrative surveillance hindering any action perceived as politically sensitive

Practical consequences:

• Unclear legal framework
• Difficulty obtaining official recognition
• Risks associated with any activity deemed dissident

Contribution to Social/Environmental Change:

Despite these strong constraints, NGOs actively participate:

• In concrete daily life improvement, for example through locally-led anti-pollution campaigns
• In gradually evolving collective behaviors around volunteering or animal protection

Concrete examples:

1. Friends of Nature: Chinese pioneer raising awareness against desertification & promoting ecological laws.
2. One Foundation: initially created under Jet Li’s patronage after Sichuan earthquake; became national reference in disaster management & rapid humanitarian aid.
3. Chi Heng Foundation: targeted educational support for children affected by HIV/AIDS in marginalized rural provinces—recognized impact on school retention & fighting local discrimination.

Despite strict surveillance and constraining framework, occasional successes show that some NGOs are becoming indispensable actors—even catalysts—of gradual societal change