Red Cross scandal

The Red Cross Society of China (RCSC), a major charity that receives $600 million worth of donations a year, will have to make more efforts to rebuild its reputation even if it has nothing to do with Guo Meimei. Guo, an otherwise obscure 23-year-old woman, dragged the society into a credibility crisis three years ago by posting wealth-flaunting pictures while claiming to be senior staff member related to the society, in 2011. Although the society later denied the connection, damage has been done as many people suspected the society used donated funds to line personal pockets. Donation — not only to the society but to all Chinese charities — started to decrease.

Official statistics show that donations to Chinese charitable organizations dropped year-on-year in both 2011 and 2012. Although the Ministry of Civil Affairs said global economic downturn and decreasing number of natural disasters in the two years are behind the decrease in donations, the Guo Meimei incident is believed to have played a major role in swaying public confidence in China’s charitable organizations.

After she was recently arrested and investigated by the police, Guo admitted that she had falsified her connections with the RCSC and no penny of her wealth had come from the society.

However, many people still believe that the society is corrupt. According to a survey by China Youth Daily, about 35 percent of the 2,000 respondents said that although Guo had admitted that she had nothing to do with the RCSC, the society must be put under scrutiny to prevent misuse of donated funds.

This lack of confidence in the RCSC is not unreasonable. Media reports have pointed to various scandals and irregularities involving Chinese charitable organizations in recent years, seriously denting public trust in those organizations’ ability to properly manage the donated funds.

In other words, the damaged public confidence had little to do to Guo’s smearing of the RCSC. It comes mainly from the past irregularities of those organizations, Guo’s remarks have simply reinforced people’s bad impressions toward them.

Despite Guo’s arrest, it will take some time for China’s charitable organizations to restore their damaged reputations.

To regain public confidence, they need to avoid any possible controversial behavior , but more importantly, make their operation transparent so that the public can see how funds are used.

So far, detailed reports on how they use their publicly-pooled money remain unavailable despite repeated public calls for transparency.

The earlier they release such reports, the more faster they will rebuild the public trust.