The Ministry of Civil Affairs issued regulations Sunday requiring charity foundations to regularly publish detailed reports of their donations and expenditures, in a move to boost transparency and enhance supervision in the sector.
The regulations, published on the ministry's website, stipulate foundations should establish effective internal management policies that are open to the scrutiny of donors and government departments.
The regulations acknowledge the right of donors to know how their money is spent and make it clear that foundations must "give truthful and timely answers."
The regulations were released after a number of controversies hit the sector, which created fury among Web users who demanded more transparency of China's charities.
"The newly released regulations are conducive to the overall development of charity foundations in China, especially at a time when citizens have begun to lose faith in China's charities," Li Yusheng, program director of the Narada Foundation, told the Global Times.
The new document also specifies "foundations should not fund any profit-seeking activities."
Yang Peng, secretary-general of the Jet Li One Foundation, which was founded by film star Jet Li under a strategic partnership with the Red Cross Society of China, agrees the new regulations are a move forward.
"The amendment is a positive one and will help promote China's philanthropy," Yang told the Global Times.
According to the ministry, the number of charity foundations in China totaled 2,500 by the end of 2011.
Xinhua contributed to this story