However, Wang suggests that it may be a new approach in China's philanthropic development to encourage more entrepreneurs to establish family-owned private foundations.

"It's easier for them to establish a foundation as they have enough money," he says.

In May, billionaire Cao Dewang from east China's Fujian Province cooperated with the China Foundation for Poverty Alleviation by donating 200 million yuan to five drought-affected provinces in southwest China.

Different from other donations, Cao strictly regulated the distribution of the money to make sure each family receives 2,000 yuan. Penalty clauses have been included in the contract. Cao also organized a team of reporters to "supervise" the allocation.

Cao has been preparing for the registration of the Heren Foundation, named after his late father, but there are still problems.

Cao planned to donate 70 percent of his stock in the Fuyao Group. As it is not regulated in laws and regulations, and there was no successful example in this regard, the procedure is still ongoing.

Wang says more private foundations will be positive for grassroots NGOs.

"When more entrepreneurs establish their own foundations, they can support more grassroots NGOs in accordance with their own philanthropic preference when they are considering spending money," Wang said.

Heidi Hu says it is true that more private foundations will help grassroots organizations to develop, especially in China.

Hu's foundation, now a project under the China Children and Teenagers' Fund (CCTF), hires a professional team of insurance, IT, and communications professionals to promote insurance for orphans across China to protect them against critical illnesses. It only has a small amount of money for management, so it raises funds from a company, especially for this part.

"It may still be difficult for the public to accept that part of their donation will be used to pay our employees, but it's easy to understand for the companies," she said.

She says the idea of philanthropy should be changed. The foundation now is promoting a new type of donation, if you buy 50-yuan insurance for an orphan, then you can buy another at the same price for another child, which costs much less than common business insurance.

"It's meant to encourage donors. What we want to spread is that philanthropy is not only about giving. It's all right if you are expecting some return from your philanthropic deeds," she said.

Wang Zhenyao said more cooperation and interaction between foundations and NGOs requires development of agency service organizations, such as his institution, whose foundation is also a milestone in the development of Chinese philanthropy.

One of the major goals is to train high-level management for the foundations and NGOs, Wang said.