Donor Guide for Grant Making and Advisory Services in China

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1 Donor Guide for Grant Making and Advisory Services in China Updated Please note: Unless otherwise noted, Annual and Year in this document all refer to calendar year, i.e. January 1 to December 31.

2 I. Background As stipulated in The Law of the People s Republic of China on the Administration of Activities of Overseas Nongovernmental Organizations in the Mainland of China (the ONGO Law) and associated guidelines and regulations, Give2Asia must submit an Activity Plan and Report to Give2Asia s Professional Supervisory Unit (PSU) and the Beijing Public Security Bureau Overseas NGO Administrative Office (PSB). Annual Activity Plan: Representative Offices of overseas NGOs must submit an annual activity plan for the upcoming year by December 31 each year. Upon approval by the PSU, the annual activity plan must be submitted to the registration authorities for filing. The contents of the annual activity plan must include but are not limited to: o Project(s) to be implemented o Local implementation partner o Project(s) implementation geography area, such as the city, county or province o Use of funds Failure to submit an annual activity plan and to submit an annual report in accordance with provisions will result in a warning or an order from the PSB to cease all activities within a certain time frame. The responsible PSB can also suspend the Representative Office registration certification, if deemed necessary. Mid-Year Activity Plan: Give2Asia s Representative Office in China is now permitted to submit a mid-year activity plan by April 30 each year. As with the annual activity plan, the mid-year activity plan must be submitted to the registration authorities for filing once approved by the PSU. The mid-year activity plan is intended for grants that were not submitted by the December 31 due date. The required content of the mid-year activity plan is the same as the annual activity plan. Annual Report: Representative Offices of overseas NGOs shall, before January 31 each year, submit an Annual Report to their PSU detailing the previous year s work. Upon receiving approval from their PSU, Representative Offices will submit the report to the responsible PSB office for filing record. The Annual Report should include: o An audited financial report as per the unified national standard and audited by an accounting firm within mainland China; o Details of activities; o Personnel or organizational changes; and o Finance statement 2

3 To be compliant with the ONGO Law and regulations, Give2Asia is hereby making necessary changes to grant-making and management, as well as advisory services, in mainland China. Please review this Guide carefully as it may affect your charitable gifts and purposes in mainland China. If you have any questions, please do not hesitate to contact Give2Asia. II. Changes to Procedures and Timeline 1. Pre-approval by Give2Asia As stipulated in the background section, Give2Asia has been given two opportunities to submit activity plans. The annual activity plan must be submitted to the PSU by December 31 each year. The mid-year activity plan must be submitted to the PSU by April 30 each year. Mid-year activity plans are intended for new grants that were not included in the December plan. Grants can be made and activities can be implemented only upon approval by the PSU and submission to the PSB. Give2Asia cannot guarantee approval of any grants. To allow for internal Give2Asia processes and approvals, we strongly recommend that you submit your annual grant making plans to Give2Asia by November 30 each year. If you are unable to meet the November 30 deadline, we require you submit your grant making plans for the remainder of the year to Give2Asia by April 1 each year. Your grants and activities plan will need to include the following information: Grants o Number of grants to be made o Name of grantee organizations o Approved grant amounts o Grant period o Project goal o Brief project description for each grant o Projects implementation geography areas at city, county or province * Grants to individuals or organizations registered as a business are not permitted. * Please complete Give2Asia s Donor Commitment Form once grants are confirmed. Advisory Services o Number of advisory services needed from Give2Asia o Service period o Brief description of each request services 3

4 2. Approval by PSU and Beijing PSB Based on Give2Asia s experience, it takes approximately 2 months to obtain approval for activity plans from the PSU and PSB. Give2Asia will inform donors of the approval results, and begin the process of grant-making shortly upon receiving formal approval. Regarding alterations to the Annual Activity Plan, the ONGO Law has stated, where it is necessary to alter an activity plan under special circumstances, the representative office of the overseas NGO shall complete and submit Form 8: Alteration of Annual Activity Plan of Representative Offices of Overseas Nongovernmental Organizations to the registration administration department for submitting documents for the record. Therefore, adjustment requests on approved grants must be submitted in writing to Give2Asia. All adjustments will be reviewed by Give2Asia prior to submission to the PSU and BPSB. Adjustments can include: Grant amount Grant period Budget allocations Select project activities Adjustments cannot include changes to: Project goal Project partners 3. Grant Making Procedures Once the PSU approves an activity plan, Give2Asia carries out its standard grant making procedures. Should a grant not be made for reasons such as: the grantee organization fails its due diligence review, lack of grant funds, or Give2Asia s Board of Directors not approving a grant for any reason - then Give2Asia will inform you immediately so you can decide whether to consider submitting an updated grant in the next calendar year. Other than the above listed changes, Give2Asia s grant making and management procedures remain unchanged for grants to China. The process is detailed below: Donors o Provide grant details to Give2Asia via a completed Activity Plan or sharing a project proposal o Complete the Give2Asia Commitment Form o Upon PSU and Beijing PSB approval, distribute grant funds to Give2Asia 4

5 China Grantees o Conduct a due diligence review o Review and approve project proposal o Enter into legally binding contract via the Grant Agreement o Disburse grant funds to Grantee in RMB currency o Give2Asia monitor project implementation periodically o Give2Asia collect all necessary reports Suggested grant making process in compliance with the ONGO law: Donors PSU & PSB & Give2Asia Give2Asia Give2Asia monitors and updates project implementation By next JAN Give2Asia collects, reviews and approves grant report & shares with donor By NOV 30 or APRIL 1 Donor complete internal grant approval & submit grants plan for next year to Give2Asia for pre-approval By DEC or APR Give2Asia submits Annual Activity Plan to PSU By JAN Give2Asia submits Annual Report to PSU Give2Asia disburses grant funds to grantee PSU reviews & approves Annual Activity Plan Give2Asia Board reviews & approves grants Give2Asia files Annual Actvity Plan with Beijing PSB for approval Give2Asia finalizes Proposal & Budget Give2Asia conducts Due Diligence Donor wires funds to Give2Asia for approved grants 5

6 4. Monitoring and Reporting under PSU and PSB Supervision According to the ONGO Law, all activities implemented in mainland China are subject to the oversight and supervision of the PSU, PSB, and relevant departments and organizations. This means that both the PSU and PSB are legally entitled to monitor all the grants made and activities carried out by Give2Asia in mainland China. This includes project implementation throughout the grant period, and reviewing project and financial reports. This is a legal requirement for Give2Asia to carry out activities in China. 5. Annual Report and Audit The ONGO Law and regulation requires Give2Asia to submit an Annual Activity Report to its designated PSU by January 31 and file the PSU approved annual report with the PSB by March 31 each year. The annual report should include: o Audited financial reports as per the unified national standard and audited by an accounting firm within Mainland China; o Details of activities; o Personnel or organizational changes; and o Give2Asia s financial statement for China operations Therefore, Give2Asia will submit all grant information and advisory services in the Annual Report to its designated PSU and file it with the PSB. 6. Program Publicity in China To be compliant with the ONGO Law and regulations, Give2Asia MUST be referred to as the grantor in all publicity activities or materials within China. Due to the on-going evolution of the ONGO regulation and administrative guidance from the PSU and PSB, the rules guiding donor publicity are evolving. Thus far, there is no written guidance regarding publicity guidelines and Give2Asia is acting on the evolving advice of its PSU and the PSB. Give2Asia will provide updates on publicity guidelines as they are made available. Please share your publicity plans with your Give2Asia Program Manager for review and approval. To ensure compliance, Give2Asia will specifically bring each case to the related administrative agencies for guidance and assurance. In Give2Asia s grant agreement with the grantee, Give2Asia has suggested the following template for wording program publicity in China: 6

7 o Give2Asia made the grant to [Grantee Organization], with funds donated to Give2Asia by [Name of the Donor]. o Project name format: Give2Asia/Donor/ XXXX Project (XXXX refers to main project goal or activity) o For donors who would like to remain anonymous, please inform Give2Asia Account Managers. III. Services and Fee Structure for China 1. Standard Grant Making and Management Services Give2Asia will continue to provide grant making and management services for donors, including due diligence reviews on grantee organizations, proposal development, international grant making, final report development and submission, as well as all necessary report translation. Services Details The standard donor-advised grant making and management services include: o Service to Donors Conducting a thorough due diligence review on nonprofit organizations to assess its charitable purpose, the soundness of its management and governance practices, its financial management capacity, and its compliance with US guidelines. In China, due diligence reviews will also ensure that program and legal compliance with relevant laws such as the China Charity Law and ONGO Law Providing tax deduction receipts for all donations from the United States or Hong Kong Submitting a project proposal for donor review Monitoring projects to assure that the project is on target and meeting its goals Reporting on program achievements and financial activities periodically Communicating with donors on any needed grant adjustments on activities, grant period, budget, etc. Guiding donors on project publicity and promotion when needed Facilitating donor site visits Supporting corporate employee engagement Providing project implementation and grant budget/expenditure auditing report if the grantee is randomly selected by Give2Asia CRO o Service to Grantees Providing capacity building training and tools to help grantee in project design, implementation, management, evaluation, and reporting 7

8 Working and guiding grantee organizations to develop/improve grant proposals Entering into a legally binding written agreement with the grantees that spells out the terms of the grants Disbursing grant funds to the organization with transparency, accountability, and efficiency Monitoring project implementation monthly Providing any needed technical support to grantees on project implementation and grant expenditure to comply with China relevant law and regulations Translating all Chinese documents, such as proposals and reports, into English Guiding grantees on appropriate project publicity and promotion when needed Facilitating grantee communications with donor when needed Conducting randomized project and grant budget auditing 2. Fee Structure Due to the procedural changes and increased administrative management that the ONGO Law requires, Give2Asia will adopt the following fee structure for standard grant making and management in China: Please note, at this point, Give2Asia is unable to support grants below $10,000. Due Diligence First-time Review Renewal Review (after 3 years) US$1,500 per organization US$1,000 per organization Single-Year Advised Grants Below is information on the fee structure for a single-year grant. Please see incentives in the following section for multi-year grant making. o Category A Fee Structure: Single-Year Grant (12-month period) o Category B Fee Structure: Repeat Single-Year Grants This structure provides an incentive to combine single year grants into multiple years of funding. Total Grant Amount Category A: Single-Year Category B: Repeat Single-Year Grants Grants 2-Year Grants 3-Year Grants $10,000-$19,999 $3,000 $4,000 N/A $20,000-$99,999 15% 13% N/A $100,000-$499,999 12% 10% 8% 8

9 $500,000-$999,999 10% 8% 6% $1,000,000 and more 6% 5% 4% Note: For single-year grants to be repeated for more than three years in a row, please contact your Give2Asia program manager for special pricing rate. Category A Example: Grant Name Total grant amount Grant period Grant fee rate Grant fee X $50,000 1 year (12 months) 15% $7,500 ($50,000*15%) Category B Example: Grant Name Total grant amount Grant period Grant fee rate Grant fee XX $100,000 ($50,000 per year) 2 years (24 months) 10% $10,000 ($100,000*10%) Multi-Year Advised Grants Below is information on the fee structure for a grant that has a duration beyond a single 12-month period. o Category C Fee Structure: Multi-Year Grant (more than 12 months) with fixed grant amount throughout grant period This structure covers costs for monitoring and reporting for projects with a duration beyond a single year. Total Grant Amount Category C: Multi-Year Grants 2-Year Grant 3-Year Grant $10,000-$19,999 $4,000 N/A $20,000-$99,999 18% N/A $100,000-$499,999 15% 18% $500,000-$999,999 12% 14% $1,000,000 and more 8% 10% Note: For grants with a duration beyond 3 years, please contact your Give2Asia program manager for special pricing. Category C Example: Grant Name Total grant amount Grant period Grant fee rate Grant fee Y $100,000 2 years $15,000 15% (24 months) ($100,000*15%) 9

10 3. Advisory Services Give2Asia offers the following advisory services to clients: All fees are subject to client requests, complexity of the service, targeted amount, and project length. Pre-donation Landscape Research Give2Asia provides on-the-ground research to help you make better tactical and strategic decisions in Mainland China. Research can be tailored to specific objectives and lead into longer-term program management and grant making. Project Design and Partner Identification In advance of making investments, Give2Asia can help to identity potential partners and form strategic partnership. Partner identification can be tailored to specific criteria, and Give2Asia can also help you and your local partner design and implement high-impact programs that turn ideas into action Employee Engagement Give2Asia provides technical training for local employees to strengthen in-country decision making toward a philanthropic goal. Workshop training can include topics such as your CSR strategic mission, the philanthropy landscape in China, corporate volunteerism, partner identification and selection, etc. Technical Training Give2Asia can help you enhance the capacity of grant recipients through tailored training sessions based on Give2Asia s robust experience in project design and implementation, and provide data-driven technical tools. Project Management, Administration and Evaluation Give2Asia also provides technical support to grant recipients to ensure project implement is effective, transparent, and impactful. Support can include regular program team meetings, embedded part-time staffing, or on-site program monitoring and supervision. IV. Recommendations for Donors Based on the above-suggested grant making process, Give2Asia recommends that donors make the following adjustments for future grants to China: 10

11 Since the annual activity plans must be specific, it is suggested that donors obtain all necessary internal approvals prior to submitting grants to the annual activity plan due in November for the next year, or before April for the current year. Projects can only be implemented once the annual activity plans are approved by the PSU and filed with the PSB. Thus, it is recommended that all grant projects begin on or after March 1. If you need to review a final report before confirming next year s grants, it is recommended that you obtain the necessary project information in January, and submit your plan in April. 11

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