Beijing Red Cross Society responds to questions about donations.

The Beijing Red Cross accepted an exclusive interview with China Philanthropist.

A few days ago, the Beijing Red Cross Society (hereinafter referred to as "Beijing Red Cross Society") announced the income and expenditure of donations for flood control and disaster relief: as of August 6, the Beijing Red Cross Society had received a total of 87.2906 million yuan of social donations, including 51.3701 million yuan of funds and 35.9205 million yuan of materials; 15,924,600 yuan of donations have been spent, including 12.38 million yuan of funds and 3,544,600 yuan of materials; Another 20 million yuan of funds and 30 million yuan of materials were included in the overall implementation of the city.

However, the details of the use of two social donation materials announced by official website triggered a heated discussion, and the public’s doubts focused on four points: First, why the accommodation fee for a condolence activity was as high as 27,000 yuan; Second, why the materials donated by the enterprise are sent to the place where the enterprise is located; Third, whether the prices of materials donated by enterprises are on the high side; The fourth is whether the price of purchased materials is reasonable.

On August 9th, the Beijing Red Cross accepted an exclusive interview with China Philanthropist on the above issues.

Consolation hair4,000 yuan,

Room and board cost 27 thousand yuan?

The allocation and payment details released by Beijing Red Cross Society in June 2023 show that in June 2023, the "Boai in Beijing, Healthy Grass-roots Bank" activity paid 4,000 yuan in sympathy and relief, while the accommodation and meal expenses of this activity were as high as 27,452.8 yuan, and the expenses for making table cards and banners were as high as that of 880 yuan.

According to Beijing Daily, in May, the Municipal Red Cross launched the research service activity of "Boai’s Health Grassroots Tour in Beijing" in 2023. During the activity, the Municipal Red Cross organized medical volunteer service teams to carry out free clinic rounds and health consultation in remote villages and towns and urban communities.

According to the information released by official website, the Huairou District Government of Beijing on June 19th, the Red Cross Society of the city and district, together with the Third Hospital of Beijing University of Chinese Medicine, went to Liuduhe Village, Beigou Village and Xinying Village of Bohai Town to carry out free clinic activities with the theme of "Love in Beijing, Health at the Grassroots Level". In July, the above activities started again and went to Pinggu District, but the accommodation expenses of this activity have not been announced yet.

After the heated discussion, the Beijing Red Cross Society revised the expression of the above expenses, such as "accommodation and meals for activities" changed to a more general "activity expenses" and "table card and banner production expenses" changed to "activity logo and banner production expenses".

On August 9th, the relevant person in charge of the Beijing Red Cross Society told China Philanthropist that the high accommodation and meals for the research service activity of "Boai in Beijing Health Grassroots" were due to the fact that many doctors and volunteers went in batches. The purpose of this activity is not to send 4000 yuan to needy households, but to give health screening and free clinic to villagers.

"The 27,000-yuan activity and accommodation expenses did not happen in one activity, but three activities. More than 30 medical staff, volunteers and logistics support participated in the event, providing free clinics and health screening for villagers in more than 10 villages. " The relevant person in charge of the Municipal Red Cross Society told China Philanthropist, "Our accommodation is strictly in accordance with the standards, and the price per room per night is around 200 yuan."

Regarding 880 yuan’s activity logo and banner production fee, the person in charge explained, "Because this activity is a long-term project, several sets of table cards and banners have been made, and an average banner is more than 100 yuan."

Is the price of purchased materials higher than the market price?

According to the "Information on the Use of Money and Materials" of the Beijing Red Cross Society, in July 2023, the Beijing Red Cross Society purchased rain boots, split raincoats, etc., and the prices of the materials purchased on the same day were slightly different, ranging from 73.5 yuan to 74.5 yuan per pair (set). The reporter found through online shopping platform search that the price of the same type of goods is generally around 30 yuan. Some netizens questioned: "The number of purchases is thousands of pieces. Shouldn’t it be calculated at the wholesale price? It should be lower than the market price. "

Official website information of Beijing Red Cross Society also shows that on December 26th, 2022, the organization spent nearly 740,000 yuan to purchase 485 tents, the unit price of a single tent was 1,330 yuan, and the unit price of cotton tents was 2,250 yuan. In March, 2021, China Red Cross Society allocated a batch of cotton tents to Beijing Red Cross Society, with the unit price ranging from 1,760 yuan to 1,900 yuan.

The reporter saw on the online shopping platform that most tents are around 300 yuan, but some tents cost thousands of dollars.

Regarding the procurement of materials, the relevant person in charge of the Beijing Red Cross Society said that the procurement department handled it according to the assistance needs and the process.

"According to the internal regulations of the Municipal Red Cross Society, the procurement materials with a price of more than 500,000 yuan must go through an open bidding process. The bidding enterprises will explain the price and quality, and then the experts in the national expert database will evaluate the bids and finally determine the procurement-related matters." The person in charge said.

Is corporate donation "left hand down right hand"?

Also questioned is a company closely linked to the Beijing Red Cross.

According to the donation information on official website of Beijing Red Cross Society, Beijing Wumu Clothing Co., Ltd. (hereinafter referred to as Wumu Clothing) made four donations on July 27th, including trousers, suits, short-sleeved T-shirts and short-sleeved shirts, with a total value of about 1.56 million yuan. Among them, the unit price of short-sleeved T-shirts was 162.97 yuan, and a total of 1027 pieces were donated. The receiving unit of this batch of materials was the Red Cross Society of Wulanchabu, Inner Mongolia.

In May this year, Wumu Clothing donated down jackets, leather garments and leisure coats with a total value of 1.46 million yuan to the Beijing Red Cross for disaster relief. The unit price of leather garments was 1,409.73 yuan, and the unit price of down jackets was 880 yuan. Earlier in August, 2021, Wumu Clothing also donated clothes worth millions of yuan to the Beijing Red Cross.

Such a caring enterprise should be respected, but it has attracted many questions.

The content of the public’s query, in addition to thinking that the price of clothes is on the high side, also raises another question: the donated materials of Wumu Clothing in May this year were received by Luxinzhuang Village and Beidahua Village in Zhangjiawan Town, Tongzhou District, and Beidahua Village was the registered place of Wumu Clothing Company, and Luxinzhuang Village was the registered place of another forestry company under the name of Ji Lianxu, the legal representative of the company. The "date of donation" and "date of dispatch" of this batch of materials occurred on May 22, 2023, which means that they were donated on the same day and were accepted on the same day.

The relevant person in charge of the Beijing Red Cross explained that Wumu Clothing Company had made several donations, and the materials distributed to the relevant villages on May 22 were not the ones donated that day. "After receiving the materials, the Red Cross must first put them in storage, and the staff will count them to see if there is any problem with the quantity and quality. This will take time and it is impossible to distribute the materials received on the same day."

Regarding the issue that the donated materials are finally distributed to the location of the enterprise, the Beijing Red Cross responded, "Corporate donations can be directed, and the donor specifies where the donated materials will be used. This is also the power of the donor. It is normal that the recipients of that batch of materials are ordinary people in that village, not the donor Wumu Clothing Company. "

In addition, on March 15th, 2021, "Ji Lianxu" in the list of members of the Standing Committee announced by the Beijing Red Cross Society had the same name as the legal representative of the above-mentioned company, which also triggered public speculation.

China Philanthropist was confirmed by the Beijing Red Cross Society. Ji Lianxu and the legal representative of Wumu Garment Company are the same person in the list of members of the Standing Council of the Society. The relevant person in charge said that the executive directors are elected, including people from all walks of life. They only participate in some decisions, including voting at meetings, and do not receive wages or other remuneration from the Red Cross.

How to price self-produced materials donation?

In order to encourage enterprises to fulfill their social responsibilities and participate in charitable undertakings, the relevant policies stipulate that enterprises can enjoy pre-tax deduction or tax deduction for public welfare donations, including donations, materials and donations to students, which objectively reduces the tax burden of enterprises.

According to the provisions of the Enterprise Income Tax Law and the Provisional Regulations on Enterprise Income Tax, the public welfare donation expenditure of enterprises can be deducted when calculating the enterprise income tax, but the deduction amount shall not exceed 12% of the total profit of the current year, and it is allowed to be carried forward for three years.

However, the current Regulations on the Implementation of the Enterprise Income Tax Law puts forward certain restrictions on the tax deduction of corporate public welfare donations. For example, the donation object must be a public welfare organization or unit recognized by the civil affairs department of the State Council, and the purpose of the donation must comply with the relevant provisions of the state, and it must be true and legal, without any form of return or interest.

Material donation is also a way for all sectors of society to participate in public welfare donation, which is generally divided into three forms: first, donors purchase materials independently for donation; Second, the donor will use the self-produced materials for donation; Third, donors, as distributors, use their wholesale or retail materials for donations.

The donation of Wumu clothing belongs to the second category, and the public questioned the high price of the donated clothing, especially the short-sleeved T-shirt with a unit price of 162.97 yuan.

In response to the question that the price of donated materials of Wumu Clothing is too expensive, the relevant person in charge of the Beijing Red Cross Society said, "Wumu Clothing is a mid-to high-end product, and there are outbound orders and sales records of similar products, and there is no virtual standard price."

How to determine the price of self-produced materials when donating? He Guoke, a lawyer of Beijing Zhicheng Law Firm, told China Philanthropist that the relevant laws clearly stipulate that the value of donated materials should be measured at fair value, and it is not the random offer of donors.

China’s current "Accounting System for Non-profit Organizations" and "Several Provisions on Standardizing the Behavior of Foundations (Trial)" all mentioned that the "fair value" of donated materials is taken as the accounting standard. If the donor provides relevant credentials (such as invoices, customs declarations, relevant agreements, etc.), the amount indicated on the credentials shall be taken as the entry value. If there is a big difference between the amount indicated on the certificate and the fair value of the donated assets, the donated assets shall take its fair value as its actual cost.

"If it is purchased materials, there must be purchase invoices and payment traces in the process of purchasing. According to the recorded value of invoices, the price cannot be significantly higher than the market price. When the donor donates his own products as a manufacturer, the fair value is the ex-factory price of similar products produced by him, and it is based on the ex-factory credentials. " He Guoke said.

Source:China philanthropist