Government-backed Chinese Red Cross pays price for credibility crisis

Microbloggers have been giving the Red Cross thumbs-down emoticons (see screengrab below) and swearing at the humanitarian organisation on its Sina Weibo page since the earthquake hit southwestern Sichuan on Saturday.

Even when the Red Cross declared a total of 42.47 million yuan in donations as of 5pm on 22 April, the post was met with disbelief and bitter criticism such as "Scram! Who are you putting up a show for?" and "There is no hope for the Red Cross Society of China. It will go on to become the shame of the Chinese people and the joke of the world". 

The accusation of putting up a show seemed to hold water, when a volunteer with the Sichuan branch of the national Red Cross revealed that he and other volunteers were ordered to distribute relief supplies only when camera crews from television stations arrived.

In fact, the above photo, taken from the Red Cross' Sina Weibo page, was exposed by sharp-eyed netizens to be 'staged'. The giveaways are: houses in the background that are still intact, the carplate on the Honda CRV behind not having a Sichuan prefix, and the 'absurd' scene of eight people lifting a granny-type of victim.

Compare the Red Cross photo to another similar-looking one taken by AP on 20 April, where rescuers also carry out an elderly person from a collapsed house in Qingren Township, Lushan County, Ya'an City, Sichuan Province.

The Chinese Red Cross has its reputation flogged in the past for scandals involving Guo Meimei and Guo Zihao, who in 2011 flaunted their lavish lifestyles (supposedly financed through their connections with Red Cross) in photos of luxury cars and goods that were posted and spread online. The public perception since has been that Red Cross funds were embezzled or misused to feed expensive indulgences.

The trust deficit was aggravated when billions of yuan in donations for victims of the 2008 Wenchuan earthquake were not accounted for.

Zhao Baige, executive vice-president of the Red Cross Society of China, asked for understanding from society in general to help facilitate ongoing disaster relief efforts in quake-hit Ya'an.

"We fully understand and respect public opinion," she told local media yesterday, though she admitted that "public trust cannot be recovered in a short-run".

Still, the PR injuries to the Chinese Red Cross are severe. "People are discerning, and this is so true when it comes to lies and scandals," said Lisa Chang, founder of Angle Communications. "As an organization or as a human, until you admit your fault and show that lessons were learnt, I do not see how you can expect people to 'let go'".

In contrast, when One Foundation disclosed the sources of its donations via the public service platforms of Tencent, Tmall, Alipay, and Sina, amounting to 46 million yuan as of 22 April, netizens responded in warmer tones.

Communication efforts from both Zhao and the Chinese Red Cross team may be seen as not having real value as the true identity of Guo Meimei was never revealed; the society simply denied the rumours. "When an organisation is not thinking long-term, people would despise it or its campaigns," said Chang.

Unlike most international Red Cross branches, which operate independently of government, the Chinese Red Cross has close ties to the state. It used to be under the Ministry of Health.

According to data from the 2013 Edelman Trust Barometer, Chinese people trust the authorities less than the private sector (81 per cent versus 74 per cent), due to unsurprising factors like corruption, fraud and government incompetence.

Also, 51 per cent of the informed public in China find NGO representatives credible, compared to 36 per cent for government spokespersons.

Although the Red Cross is now separate from the ministry, it is public knowledge that it maintains active links with the bureaucracies, with the de facto connection with the government hard to shake off. That is, of course, unhelpful to donor sentiment.

"Cause-related marketing has been a questionable activity here in China since many have used this for self-gain instead of truly helping people," pointed out Chang.

Charity is "a very new thing" in modern China, being under-regulated, added Darren Burns, managing director of Weber Shandwick China, who has witnessed instances where "ruthless individuals" leverage charities for criminal activity. This has tainted the whole sector.

One Foundation's official website displayed a message saying that funds are transferred to the account under the Red Cross Society of China, but Jet Li has clarified that his foundation is an independent legal entity registered in Shenzhen without any existing relationship with the national Red Cross.

In Jan 2011, the One Foundation already ended its affiliation with the Red Cross after operating as a special program under the Society since April 2007. Previously, the country does not allow the establishment of non-governmental fund-raising entities without an official "unit-in-charge".

To stem fears, Li stated, "No one will have the guts to secretly divert the money to indiscriminate uses."

In February this year, when a controversial idea to mandatorily collect a certain amount from everyone's paychecks to be donated (just like a tax) was suggested by Zhou Sen, honorary vice president of the China Charity Federation and a representative of the National People's Congress, the public viewed it as "shameless and legalised wage robbery".

The backlash is, again, a reflection of public distrust toward government-backed charities in China. It is not necessarily all bad as this urges the need for better regulations for the sector, according to CC Lau, Shanghai general manager of Racepoint Group.

Because the Red Cross is associated with the Chinese government, it all the more needs to be transparent to regain any modicum of trust, said Elan Shou, senior VP cum managing director of Ruder Finn China.

"While building trust takes years, destroying it only takes days," Shou told Campaign Asia-Pacific. "The Guo Meimei story is the best example. Red Cross needs to transparently communicate the ‘game rules [of charity]', by telling the public where money comes and goes, and invite third-party audit firms for verification (One Foundation, on the other hand, hires Deloitte as its auditor and KPMG to do its accounting)".

"It’s better than doing nothing, waiting for perceptions to change themselves," she said.