When Chen Guangbiao, a billionaire philanthropist, learned about the 7-magnitude earthquake that hit Ya'an, Southwest China's Sichuan Province on April 20, he immediately told his employees to organize for heavy machinery such as bulldozers to be moved to the quake zones to help clear roads blocked by landslides.

"Rent as many as you can," he said on his phone while on his flight to Chengdu, the provincial capital.

Chen got to Ya'an at about 2 pm on April 20. By that time, 13 heavy machines had already arrived, and the rescue team he organized cleared seven roads over the next two and a half days.

"(We delivered) 1,000 quilts, 2,000 cartons of instant noodles, six tons of milk powder, 1,000 cartons of roll paper and tissues, and 5,000 cartons of canned tea beverages (to the people)," Chen told the Global Times in Beijing on April 24.

Chen, who is chairman of Jiangsu Huangpu Recycling Resources Co, also handed out 300,000 yuan ($48,662) of his own money to the local people.

While many other rich people in China choose to donate to charity foundations, Chen prefers to help out by himself, by directly providing goods as well as cash. This is because the philanthropic systems in China are too inefficient, Chen said.

Tainted by scandal

As well as inefficiency, a lack of confidence in charitable organizations is another problem.

The Red Cross Society of China (RCSC), a major State-backed charity for disaster relief, met with a muted response when it called for donations to help with Ya'an earthquake relief.

As of Wednesday, the national headquarters of the RCSC had received only 136.3 million yuan in donations, mostly from big companies.

The organization was mired in scandal in June 2011, when a young woman named Guo Meimei flaunted her luxurious lifestyle in numerous microblog postings. Guo's Weibo account identified her as a manager in a business unit affiliated to the RCSC.

Netizens were infuriated by the thought that their charitable donations were used to buy expensive cars and handbags for Guo.

The RCSC issued a statement in December 2011 denying this had happened and distancing itself from Guo. It also shut down the firm that Guo was involved with, but the skepticism has not yet dissipated.

The lack of response to the charity's call for donations for the earthquake was partly a result of the Guo incident, Wang Ming, director of the NGO Research Center at the School of Public Policy and Management at Tsinghua University, told the Global Times on April 24.

Wang compared the situation to a scandal that befell the United Way of America in 1992, which the Washington Post said had "embarrassed one of the nation's most respected charities."

The ramifications of the Guo scandal have not yet fully revealed themselves, Wang cautioned on the sidelines of a charity foundation forum held in Beijing on April 24.

Other State-backed charities such as Henan Soong Ching Ling Foundation have also been hit by scandals in recent years, giving rise to private fundraising entities for charitable causes, experts said at the forum.

According to research by Huang Zheng, director of the Foundation Research Center at the Beijing-based Central University of Finance and Economics, over the past five years, the number of public foundations has largely stayed the same, but the number of private foundations has grown.

"Out of a total of about 3,000 foundations in China, nearly two-thirds are non-public," Wang noted.

"Also, we have seen after the earthquake hit Ya'an that the government-run public fundraising foundations have lost much of their fundraising capability, whereas privately operated fundraising foundations have shown strong capability in this respect," Huang told the forum.

One such private charity is Songfandang, literally meaning food-delivery party. It raised 300,000 yuan from 3,803 online participants in about six hours after the news of the earthquake broke, news portal caijing.com.cn reported on April 22.

It uses microblogs to run its charity auctions. It holds the auctions on taobao.com, a major online shopping platform, thus adding elements of consumption and entertainment to the charity drive.

According to the caijing.com.cn news report, 1,418 of the participants donated between 1 and 10 yuan. The proceeds went to Li Chengpeng, a prominent Chengdu-based social critic, who was leading a private direct relief campaign in Ya'an.

"This is a good way to get (more people involved)," Peter Little, an overseas liaison officer at Tsinghua University Education Foundation, told the Global Times on April 24.

Philanthropist Chen was also intrigued by the idea of combining consumerism with charity. He launched his own brand of tea beverages in January, which have such slogans as "Let's be good Samaritans," printed on the cans. The beverages are priced at 4 yuan to 5 yuan a can, 0.2 yuan of which goes to Chen's charity efforts.

Chen said his good Samaritan teas are sold in one-third of the supermarkets across China.

"I hope that through the fast-moving consumer goods I can disseminate my own charity and environmental ideas," he said.

Restrictions

There are still some legal and regulatory obstacles facing privately run charities, the experts said.

Songfandang operates in a grey area where it could be considered as illegal fundraising, because no private entity is allowed to raise funds from the public in China due to financial risk concerns, according to Wang.

All of Songfandang's Ya'an charity auctions were later suspended or canceled because they had violated taobao.com's regulations, the operator said in a statement on April 27.

Transparency of the private charities has also been under debate. Thanks to Weibo, Li, the critic, has been receiving questions about his relief work, such as whether he has actually bought and sent as many tents as he claimed with the donations.

"Over the past 11 days ... I had to respond over 20 times to the rumors alleging that we're bluffing," Li complained on his Weibo Wednesday.

Meanwhile, Chen insists on using his personal wealth and company profits for charity, instead of raising money from the public.

"The regulations (on publicly raised funds) require formal procedures that prevent me from donating freely," Chen said, "and when the earthquake strikes, the rules would stop me from going there immediately to dole out cash and hire the heavy machines."

Both Chen and Wang called for the government to stop running charity organizations in the future, and focus on creating an environment conducive to the growth of private benevolence.