China's charity sector has developed rapidly in recent years, with the amount of donations and number of charity organizations growing and new charity strategies such as better utilizing the Internet and social media are constantly emerging. According to China's 2014 Charity Donations Report published by the China Charity Information Center, donations of money and items amounted to 104.226 billion yuan ($15.9 billion) in 2014. Nevertheless, the industry is still plagued by a variety of issues.

Most charity organizations in China are related to the government, while many non-governmental organizations (NGOs) engaged in charity have found it difficult to obtain a legitimate status. They have to meet strict requirements for funding and staff and hand in a certain amount of registration fees in order to register at civil affairs departments. In addition, they are required to be affiliated with a government department. Although the government has lowered the threshold for charity NGOs to get registered, many still remain unregistered.

On the one hand, without competition from NGOs, government-backed charity organizations almost enjoy a monopoly and therefore lack the motivation and pressure to improve their performance and be transparent. On the other hand, the lack of legitimate status has hampered NGOs from expanding their services. The draft Charity Law has clear stipulations for developing the charity sector, regulating activities, and strengthening supervision.

One highlight of the draft is that the charity concept has become broader. Now charity doesn't just incorporate social assistance but also public services, so the new charity concept will help define the course of the charity sector for the next decades. The proposed legislation has also eased access to fundraising so that organizations can be qualified as fundraisers as long as they meet certain requirements. As a result, more competition will be introduced to the sector to boost its development. In addition, the draft has addressed new issues such as whether individuals can raise funds online and proposes to setting up a "charity day."

Perhaps a charity law alone cannot solve all the problems involved in the industry at once. Nevertheless, the adoption of the new rules will greatly promote the healthy development of China's charity sector.