Charity Law Reform in Hong Kong: Taming the Asian Dragon?

Damian Bethke (International Journal of Not-for-profit Law (Vol. 18, No. 1))

This article examines the historical development of charity organizations in Hong Kong and reviews laws governing them.

Hong Kong has seen a rise in the number of charitable organizations despite a lack of clear regulations. To address this, in 2007 the Law Reform Commission initiated a review of the charity law and recommended 18 changes. This article discusses where these recommendations fall short and proposes an alternative model: the creation of independent charity watchdog organizations to monitor the sector. Read it here.

What exactly is a GONGO?

What exactly is a GONGO?

By Vincent Cheng

When I first came across the term GONGO, or “government-organized non-governmental organization”, I was perplexed by the rather oxymoronic combination of the term. Isn’t a non-governmental organization supposed to be non-governmental? How are they different from typical NGOs? And since GONGOs are effectively an extension of the government body, what is their role in the civil society?

First, let’s look at the definitions. Theoretically, GONGOs are typically established, funded, staffed, and governed by the government, hence the “GO”-of GONGO. NGOs, as a contrast, tend to be established independently and are less reliant on government funding. They hire their own staff and are independently run and managed. But when it comes to GONGOs, the distinction between the two becomes blurred. In today’s world, with ever more complex social challenges, collaboration across sectors is important and necessary. This trend also blurs the line between government, and the private and social sectors.

GONGOs are generally created by governments to carry out a certain social or political agenda and have been established across a range of government types. They can play a useful role in society. In Germany, for instance, the government promotes and sponsors citizens’ initiatives and counter-mobilizations against far-right extremist groups under initiatives labeled as “Kampf gegen Rechts” (Fight the Right).[1] These initiatives help to strengthen democracy and the people’s voice.

In Asia, many GONGOs stay away from politics and play more of a social delivery role. GONGOs can be like other NGOs as social service providers, and there are ample examples of that in China. China Youth Development Foundation, which is known for its education programs for rural youth, such as Project Hope, is a case in point. That said, the situation can become a bit tricky when GONGOs dominate the third sector. Because of GONGOs’ principal-agent relationship with the government, GONGOs are more likely to work aligned with government agendas and less likely to be critical of government policies—at least not explicitly.

While there are positive aspects of close alignment with government, GONGOs can also diminish an independent voice as well as solutions that may adhere less closely with government guidelines.

In China, nonprofits intend to carry out charitable activities that fall under the remit of the Charity Law. Certification as charities can be applied if they have a mission of carrying out charitable activities and aim to work on certain permitted areas of social issues. These include poverty alleviation and assistance; care of elders, orphans and the ill, and assistance for the disabled; natural and emergency disaster relief, public health incidents, and other emergencies; promotion of education, science, culture, health, and sports; prevention of environmental risks, and protection and improvement of the environment; and other public interest activities permitted by the law.[2]

It is also worthy to note that China is the biggest procurer of social services from social delivery organizations (SDOs)[3] in Asia. According to the Doing Good Index 2020, 63% of SDOs receive government contracts in China, compared to the Asian average of 26%.[4] For NGOs, while sustained government funding ensures alignment with government priorities and a sustainable income stream, it also means they essentially become de-facto GONGOs. This is something that could have important implications for the development of the third sector, and the wider civil society in China.


[1] Merkel, W. (n.d.). Political regimes and state‐sponsored contentious politics: What’s new? Projects at Harvard.

[2] Ministry of Justice, the People’s Republic of China. (2020, Feb. 14). 中华人民共和国慈善法. [Charity Law of the People’s Republic of China].

[3] In the Doing Good Index, we use “social delivery organization” (SDO) to refer to organizations that deliver a product or service to address societal needs. We refrain from using the term “nonprofits” because many organizations nowadays include a for-profit or social enterprise arm, and that many of them in Asia are affiliated with the government. For more detail, please refer to page 6 of the Doing Good Index 2020.

[4] Centre for Asian Philanthropy and Society (CAPS). (2020). Doing Good Index 2020 – profiling Asia’s social sector: the path forward.


Y.A.M Tan Sri Dato’ Seri Syed Anwar Ibni Almarhum Tuanku Syed Putra Jamalullail (Malaysia)
Zakat Selangor

Published date: 20 April 2020

While much attention has been focused on ultra-high net-worth philanthropists, it is religious giving which accounts for the vast majority of giving across Asia. In Malaysia and Indonesia, religious tithing fills the coffers of the Islamic foundations set up across the two countries. Zakat embodies a central tenet of Islam–the practice of providing 2.5% of one’s income to charity. In Malaysia, the largest of these yayasans, or foundations, are quasi-government and under the auspices of the Sultan of each state.

Zakat Selangor is the wealthiest of the state-based foundations and provides numerous goods and services to the poor and needy in Selangor, which despite its economic vitality still counts about 50,000 of its families as poor. In Selangor, Sultan Sharafuddin Idris Shah appointed his brother-in-law Tan Sri Dato’ Seri Syed Anwar Syed Putra Jamalullail to run the foundation. He recognized that Tan Sri Syed was a gifted accountant and manager and could use these skills to oversee the running of a foundation which gives out more than RM800 million (approximately US$185 million) a year.

CAPS’ Chief Executive Ruth Shapiro sat down with Tan Sri Syed to better understand the important role of Zakat Selangor and his responsibilities in running it.

Shapiro: Tan Sri, thank you for taking the time to talk with me. Zakat is prescribed by the Quran and thus has been around for more than fourteen centuries; but at the same time, you must oversee this massive fund utilizing modern tools and oversight techniques. Can you explain what this balance means to you?

Syed: Of course, you know that Zakat is something that all Muslim have to pay and there are seven categories which are to receive the funds. We have a degree of leeway in designing our programs, but we focus primarily on the poor and needy who live in Selangor.

Shapiro: Your background is in finance and you are a Chartered Accountant. How has this skill set helped you to meet the challenge and responsibility of running Zakat Selangor?

Syed: For me, undertaking this role has been a very honorable task to accept. When I accepted it, I asked for and received permission from High Highness (Sultan Sharafuddin Idris Shah) to change the governance of the organization. I felt that the responsibility of dispensing such a large and important amount of money necessitates high accountability and oversight. You see, RM800 million (approximately US$185 million) coming in and RM800 million going out within one year means we are dealing with RM1.6 billion (approximately US$370 million). I tried to formalize and organize it better. I reviewed the skillsets of the trustees and of the leadership team. I convinced his Highness that we’re like a bank, so we need people with professionalism, who have knowledge about finance, Islamic finance and so on. One of the first changes I made was to bring in a majority of independent trustees, so now we have six independent and four appointed by the religious authority of Selangor. I also changed the auditors when I came in—I wanted a brand name, so now our audits are done by one of the top four.

The other important change was with the leadership team, especially the selection of our CEO. Of course, we cannot pay like a publicly listed company because this is money that is to help the poor, but we should be able to attract somebody who understands what governance is all about, what finance is all about. I am proud of the team we have put in place, a highly professional team with a great deal of integrity.

Shapiro: Are there rules about how the foundation apportions administrative costs?

Syed: Yes, we take what is known as the amil portion, which is 1/8, so that is for administrative costs and salaries, and so on, but the trustees do not receive salaries.

Shapiro: When I prepared for this conversation and read about you and Zakat Selangor, I was struck that information on management and governance received the most attention, and in effect, came first before the vision of how this money can be used to help the people of Selangor. Is that intentional?

Syed: The vision is critically important. The vision is to help the poor and destitute within the Islamic community in Selangor. Now about 50,000 families, multiplied by an average of four children, so let’s say 200,000 are classified as destitute in Selangor. We have to help them until the day they are able to get a job and they are able to pay zakat.

Shapiro: Muslims who pay zakat can choose which charity to give it to. So why do the people give to Zakat Selangor?

Syed: That is a very good question and one we have been focused on. To me the main thing is trust in Zakat Selangor. The reason we need good governance is so that people trust that the funds they send us are spent well and in accordance with our mandate of helping the most needy. I think when people entrust you with their money, you must really look after every single cent of it and use that money properly. Of course some people might not agree but, to me this is fundamental. And it has worked. Over the last nine years, donations to Zakat Selangor have increased from RM300 to 800 million (from approximately US$70 million to 185 million), and we hope to reach 1 billion (approximately US$230 million) in three, four years’ time.

Shapiro: Although there are parameters for the type of programs you support, you do focus on education. Why?

Syed: As we said, Zakat should be helping the poor and the destitute, but how do we do this in a sustainable way? How do we do this in ways which decrease the need over time. So, we target the children. We built a hostel for the kids to live, they go to school, we provide buses, we provide everything. We probably have about 115 boys and girls. And while we do much in the field of education, we also have a number of health and medical programs. Unfortunately, health issues are becoming more problematic in Malaysia. It is sad, but Malaysia has the highest incidence of diabetes in Asia and one of the highest in the world. Zakat Selangor spends close to RM30 million (approximately US$7 million) a year on dialyses. In fact, we have our own dialysis center, which is probably one of the better run in the country. It runs three shifts a day, every day.

It gets back to trust. People trust us, so we give them the best help we can. When they need food, we provide five basic food products. When they need an operation, we take them to the hospital. When they need cash, we provide it, into their account, every month.

Shapiro: You give cash?

Syed: Yes, we give to those who cannot work.

Shapiro: Do you have success stories?

Syed: Yes, of course. We have many examples of children who have succeeded because of the help we have provided them. Many of our graduates come back very often to talk about their success stories, and it motivates the new generations.

Shapiro: So, in your nine years, sounds like one of the things you’re proudest of is the re-organization or the management of the organization.

Syed: It’s very satisfying…I believe when you join an organization, you should leave it in better shape. For me, building trust and showing leadership is by example. You do the right thing and provide the example. When I was asked to lead Zakat Selangor, I had no choice really, it’s my duty. But I had some reservations initially because I did not know much about religious organizations, but then if you really think about it, running any organization is the same fundamentally. It’s governance, trust and leading by example.

Of course you make mistakes along the way, but that’s part and parcel of becoming a better person.

Social Innovation and Social Transition in East Asia

Stanford Social Innovation Review (SSIR) & Leping Social Entrepreneur Foundation

This collection of articles examines the varying ways in which social innovation has evolved in China, Hong Kong, Korea and Japan. The authors delve into the impact that each country’s history, culture, and political and economic systems have had on social innovation. Read it here.

Philanthropy and Islam

Mohamed Amersi & Ayatollah Fazel Milani (Philanthropy Impact Magazine)

This article analyzes the significance of charity in Islam. While philanthropy is embedded in most religions, it is one of the central tenants in Islam, instructing followers to connect with each other and the community at large. This article examines the two kinds of philanthropy practiced in Islam: obligatory (zakat and fitrana) and voluntary (sadaqa and waqf). Read it here.

The Palgrave Handbook of Global Philanthropy

Palgrave Macmillan

This publication is a comprehensive guide to the philanthropic sectors of 26 economies, including China, Hong Kong, Indonesia, Japan, Korea, Taiwan and Vietnam. It provides an overview of the landscape of giving, the role that government and religion play, fiscal incentives, and the legal policies that shape philanthropic giving. It also seeks to understand what motivates individuals to give and why the level of giving varies across countries. Read it here.

Japan’s Civil Society from Kobe to Tohoku: Impact of Policy Changes on Government­-NGO Relationship and Effectiveness of Post-­Disaster Relief

Harvard University

This article explores the development of Japan’s civil society through the lens of citizen volunteerism and the role of nonprofits in natural disaster relief and reconstruction efforts. The development of civil society organizations in Japan occurred relatively late compared to Western countries. However, their numbers and civil society activism as a whole have surged in recent decades. The article explores the changing relationship between the state and civil society in Japan in light of these trends. Read it here.

Corporate Responsibility in the Age of the SDGs: Role of the Keidanren Charter in the Evolution of CSR in Japan

The Tokyo Foundation for Policy Research

This article provides an overview of the evolution of the Keidanren Charter of Corporate Behavior and how it has helped promote good citizenship among the Japanese business community. It discusses Japan’s development of CSR which has largely been led by businesses and the role of Japan’s best known and most influential industry group, Keidanren (Japan Business Federation). Read it here.

Defining the Nonprofit Sector: South Korea

Inchoon Kim & Changsoon Hwang (The Johns Hopkins Center for Civil Society Studies)

This paper analyzes Korea’s nonprofit sector in the context of the major characteristics of Korean society. It explores the emergence of Korea’s nonprofit sector and its defining features, as well as the relationships between the state, society and the nonprofit sector. Read it here.

Cross Border Giving Guides

Asia Philanthropy Circle (APC)

These country reports provide insights into Asia’s social sector. It offers a toolkit for philanthropists looking to enter this unfamiliar and under-developed market. It includes recommendations from experienced practitioners on navigating through the country’s regulatory framework and cultural nuances when conducting philanthropic activities.

Read it here:

  • Giving to Myanmar: A Guide for Asian Philanthropists (English)
  • Giving to China: A Guide for Asian Philanthropists (English, Chinese)