On a cold winter day in Beijing, actor-turned-philanthropist Li Yapeng stood outside Yanran Angel Children’s Hospital and admitted what many founders of charitable projects quietly fear: his compassion had outstripped his capacity to keep the institution afloat. Yanran, born from a high-profile personal story and a wave of public sympathy, has performed free surgeries for more than 7,000 children with cleft lip and palate. Yet the hospital was recently subject to enforcement for unpaid rent, exposing an uncomfortable fact about charity hospitals in China: public goodwill does not pay landlords or utility bills.
Yanran’s predicament is not simply a local financial failure; it is a structural clash between the logic of charity and the realities of running a modern medical institution. Chinese law tightly enforces the principle of earmarked donations—funds raised for cleft surgeries cannot legally be diverted to cover rent or payroll. At the same time Yanran itself lacked a broad public fundraising qualification, meaning it could not lawfully solicit the kind of unrestricted donations that sustain ongoing operations. Tens of thousands of online donors subsequently gave nearly RMB20 million in relief, but the legal and institutional constraints limited how that money could be used.
The hospital’s story highlights three contrasting pathways in philanthropic medicine. The Rockefeller model in early-20th-century China exemplified system-building philanthropy: large, long-term capital commitments combined with professional planning to transplant medical systems. Taiwan’s Tzu Chi movement represents a community-rooted, faith-based approach that scaled through a dense volunteer network and institutionalized practices. Yanran, by contrast, exemplifies a founder-driven model: rapid mobilization around a moving personal narrative that delivers immediate rescue but struggles to develop durable governance and revenue models.
Each model has strengths and weaknesses. Founder-led initiatives excel at mobilizing attention and resources quickly. They can target specific needs and create powerful narratives that spur donations. But charisma-driven institutions frequently stall when the emergency phase ends. They tend to underinvest in corporate governance, risk management, and the gradual professionalization necessary for hospital operations—areas that cannot be sustained on episodic ‘‘traffic philanthropy.’’ Medical quality, cost control, and talent retention require steady funding and institutional systems, not just goodwill.
China’s regulatory and fiscal framework compounds these tensions. Nonprofit hospitals nominally enjoy parity with public hospitals in tax, land, and utility concessions, but those benefits are uneven in practice. Charity law also constrains fundraising to ‘‘special funds’’ for designated purposes, limiting flexible operational income. The result is a mismatch: hospitals like Yanran charge below-market fees to patients and rely on narrowly earmarked gifts, while facing full-market costs for rent, staff salaries, and equipment upkeep. Without legal channels to raise operational donations or recognized allowances for administrative expenses, their financial resilience remains precarious.
There are pragmatic remedies that would lower systemic risk and align altruism with institutional viability. Policymakers can explicitly recognize reasonable administrative and operating expenses as legitimate charitable uses, allow qualified charity hospitals or their partnering foundations to petition for fundraising authorizations that include operational lines, and extend tax incentives to donations that underwrite institutional resilience. Governments can also offer targeted subsidy programs, long‑term low-cost property leases, or shared-service arrangements with public hospitals to reduce fixed costs. On the institutional side, founder-led hospitals need to accelerate the move from ‘‘charisma governance’’ to rule-based structures, embed professional management, and explore mixed-income strategies—such as limited paid services, training programs, and partnerships—to diversify revenue without abandoning mission.
Yanran’s plight is a case study in the limits of moral suasion. It shows how individual compassion can illuminate a social problem and provide immediate relief, yet also how fragile that relief becomes without legal, fiscal and managerial scaffolding. For patients, the stakes are literal: delayed or disrupted services mean children lose access to corrective surgery that changes lives. For China’s broader philanthropic sector, the episode should catalyze a policy conversation about how to channel public generosity into durable, accountable medical institutions rather than ephemeral rescues.