He proposed that the government introduce incentives and punishment.

It can consider withdrawing the qualification of foundations that come at the bottom of the transparency list for three consecutive years and giving more tax incentives to those that top the ranking, he said.

Zhan Chengfu, director of the Ministry of Civil Affairs' department of social welfare and charity promotion, told China Daily on Tuesday that the ministry has attached great importance to boosting information disclosure by charities.

Zhan said the ministry plans to issue regulations with more "binding force" but refused to reveal more details.

He also urged charities to improve their self-discipline.

A crisis of confidence hit charities last year after a series of scandals.

In one scandal, a woman showed off the trappings of an extravagant lifestyle on the Internet while falsely claiming to be an official of the Red Cross Society of China.

An investigation later found out that the society allowed a company to profit from running a charity project.

Lynn Tang, director of the philanthropy development department of One Foundation, said that it takes massive investment of human and financial resources to be transparent. One Foundation, based in Shenzhen, achieved a perfect score of 129.4.

"Most donors are not willing to give money to help charities improve management, so our operation capital is so limited that sometimes we have to sacrifice employees' welfare to invest in updating information," she said.

The report revealed that 25 of the 100 foundations with the largest net assets by the end of 2011 ranked below 1,000.

Contact the writer at hedan@chinadaily.com.cn