The charitable efforts made by those people demonstrating great compassion to the poor and marginal groups reflect the kindess of human nature and also the degree of civilization of society. Charity should be about the voluntary engagement of all people instead of a public affair promoted only by the government. Therefore, the issue on how to mobilize citizens into charitable engagement is more significant than the issue of how governmental agents promote charitable activities. With this understanding, we expose the problems in the operation of a state-directed system in China as it relates to charity. At present, this system plays a dominant role in determining the developmental process of charity in China. However, this system also suffers from widespread criticism among the public through channels like mass media due to various charity-related incidents that have occurred recently. This study explores the resolutions to these problems and concludes that strengthening civic organizations is the main way of enhancing charity in China. This study looks at the development of charitable organisations and the donation levels in China, but stresses that this development is accompanied with many incidents that have resulted in a strong sense of distrust among the public towards state-affiliated charitable organisations. This feeling of distrust was widely reported in the mass media after the “Guo Meimei” incident and has had a strong influence on people’s views towards the strategy of development on charity. To deal with these issues, this work examines the charity situation in contemporary China through empirical studies based on data collected from opinion surveys and through social investigation into the behavioral orientations of these charitable organisations. Accordingly, this analysis consists of three dimensions of study in regard to the value, organisational features and the institutional features of this state-led charity system. We argue that the value system that influences people’s view on charity has gradually transformed into a new value system that is in support of public management in charitable efforts. Thus, it is not so much as a value issue but rather an organisational and institutional issue that has resulted in limited public participation in making donations. It is for these organisational reasons that some people complain that it is the lack of transparency in charitable efforts as being the major barrier for this development, but this study maintains that it is the shortcomings of this state-led charity system that is the major obstacle as it restricts the roles of NGOs to perform their charitable actions. Furthermore, by deploying a functional analysis about this state-led system of charitable organisations, the study illustrates several by-functions of the system on the development of charitable activities of civil organisations. This paper argues that there is a crucial need for the state to reform this system in order to modify the role of state in charitable operations. This should be the precondition for coming up with ways to further this development. Through analysis, the study raises policy proposals for strengthening the role of civil agents in the development of charity in China. In order to do so, it is very important to correct a popular viewpoint about the nature of charity; namely that it is an extension of social assistance and therefore should be undertaken by the state. Thus, with a goal of empowering civil agents in charitable efforts, we argue for a change in the governmental function in civil administration in the field of charity. The NGOs should have a space for development in the sphere of charity.