Under People’s Republic of China law, donations are generally defined as funds or goods voluntarily and gratuitously provided by individuals, legal entities or other organizations to a social organization for public good (such as a foundation or a charity organization) or a not-for-profit public institution (such as a public school, hospital or a scientific research institute) for the purpose of carrying out activities that benefit the public.
Sponsorship, however, is not clearly defined under P.R.C. law. Sponsorships are often provided by a company, partially for corporate image or general business promotion purposes and are not tax deductible. True donations, as distinguishable from sponsorships, must be made without reference for linkage to the donor’s business interest/purpose and are tax deductible if made to certain statutory recipients within certain statutory limits.