Billionaires are donating millions to fight China’s coronavirus. But where is the money going?

Bill Gates and Jack Ma have pledged funds, but is China's NGO environment equipped to handle such donations?

The NBA appears to have bought its way back onto China’s good side.

The National Basketball Association and the Chinese government had a falling out late last year after Houston Rockets manager Daryl Morey tweeted out support for the pro-democracy protests in Hong Kong. Beijing responded by suspending broadcasts of NBA games and effectively permitting a boycott of the association in China. On February 5, however, the Chinese consul general in New York was offering the NBA his heartfelt thanks.

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The NBA appears to have bought its way back onto China’s good side.

The National Basketball Association and the Chinese government had a falling out late last year after Houston Rockets manager Daryl Morey tweeted out support for the pro-democracy protests in Hong Kong. Beijing responded by suspending broadcasts of NBA games and effectively permitting a boycott of the association in China. On February 5, however, the Chinese consul general in New York was offering the NBA his heartfelt thanks.

“While China is bravely fighting the virus, people from the United States and all over the world are offering massive support in preventing and controlling this outbreak,” consul general Huang Ping said during a media briefing, reportedly loading special thanks on the NBA, which has donated $1.4 million in cash and supplies to charities in Hubei province, where the outbreak began.

In doing so, the NBA has joined the ranks of billionaires, businesses, celebrities, and philanthropists that have promised donations to help combat the coronavirus. The Bill and Melinda Gates Foundation has pledged $100 million in support; Alibaba founder Jack Ma has committed $14.4 million from his own charity; meanwhile, Boeing has shipped 250,000 masks to frontline staff.

But not all of these donations are going to China, and of the resources that are, not all are ending up where they need to be.

Go, NGOs, go

On January 26, the Ministry of Civil Affairs announced that all donations being made to support efforts to contain the coronavirus should be directed through one of five government-affiliated charities, including the Hubei Provincial Red Cross and the Wuhan Municipal Red Cross—two subsidiaries of the Red Cross Association of China.

But the Red Cross of China is not like the Red Cross overseas, which operates as a non-government agency (NGO). The Red Cross Association of China is what Beijing calls—with no sense of irony—a government-organized non-government organization, or GONGO.

“GONGOs are usually set up by the government to channel international funding and absorb government officials who were laid off during administrative reform in the 1990s. They are either spin-offs of government-affiliated service organizations or direct creations of government agencies, and are often led by retired government officials,” said Li Hui, assistant professor of politics and public administration at the University of Hong Kong.

Deploying former officials to the world of GONGOs gives the government a direct line to their activities, and the former bureaucrats are expected to be more attune to the ambitions and policies of the Party than their civic counterparts.

The ruling China Communist Party prefers GONGOs over independent civic NGOs, Li said, which still exist but are regarded with suspicion by officials who view them as a threat or, at the very least, an interference to Party control.

Foreign NGOs are even less welcome. In 2017, the central government introduced a law requiring foreign NGOs, including those registered in Hong Kong or Taiwan, to find a government sponsor before registering as an NGO. The law also brought foreign NGOs under direct supervision of the Public Security Bureaus—China’s police—which are able to inspect an NGO’s finances, staff roster, and office facilities.

“On the one hand, some officials believe that NGOs can help support service delivery and resolve social conflicts and are open to collaborate with NGOs in providing social services to citizens. On the other hand, the government has devised various policy tools to formally and informally restrict NGOs’ ability to register, raise revenue, and engage in political activities,” Li says. “The political space afforded to NGOs has been tightening.”

Show me the money

The Wuhan Red Cross—the GONGO located in the city at the center of the coronavirus epidemic—had received over $86 million in cash donations from the public as of February 1, according to a local government official. It’s also gotten stockpiles of supplies, including over 9,000 masks, 64,000 protective suits, and more than 80,000 pairs of goggles. But on social media, frontline medical staff complain that the supplies aren’t being passed along.

“We appreciate all donations from society; and in order to make sure all supplies go to the most needed, we have decided to accept donations ourselves without working with the Red Cross,” said Song Zhan, the donation coordination officer for Huoshenshan Hospital, the temporary field hospital built in eight days to accommodate the overflow of patients.

The Red Cross has said there are legitimate reasons why supplies haven’t been forwarded to the frontlines, such as donations of masks that are unsuitable for medical use. On February 1, however, three officials from the Hubei Red Cross were reprimanded for “mishandling donations for the coronavirus,” prompting an apology from the organization.

This isn’t the first time the Red Cross of China has had to apologize for mishandling resources during a crisis. When an earthquake struck Sichuan province in 2008 and killed 69,000 people, the government appointed the Red Cross as the go-to charity for handling donations and relief efforts. A report from Tsinghua University in 2009 estimated that 80% of collected donations were funnelled straight into government coffers as “extra revenue.”

Side step

The shortcomings of China’s GONGOs might be why some altruists are deciding to make indirect contributions to the coronavirus crisis.

Of the $100 million pledged by the Bill and Melinda Gates Foundation, for example, $20 million is going to multilateral agencies such as the Centers for Disease Control (CDC) and the World Health Organization (WHO), while $60 million is earmarked for vaccine research. The $14.4 million pledged by the Jack Ma Foundation will primarily fund vaccine research, too.

“It is exciting to see that individuals, foundations, and corporations are donating money and supplies to help those affected by the coronavirus,” Li said, “But the crises clearly show that the government and the broader society should work collectively to explore ways to sustain the newly emerged donation culture and support the growth of civic NGOs.”

NGOs are far from perfect—just look at the Red Cross in Haiti. But in funneling donations to government-backed charities, China is staking some of its response to the coronavirus crisis on a system mired in the same bureaucracy that stymied its initial response to the outbreak.

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