This paper focuses on how Chinese foundations distribute donations，i.e. the ways in which they spend their money and how those ways are changing. Reviewing the practices of numerous domestic foundations，this paper identifies two methods of distribution based on the fields in which recipient organizations work and their methods of selecting those organizations. These methods are referred to as“closed”and“open”. The“closed way”tends to be，monopolized，mandated from the top-down，bureaucratic，low-cost，and donates small amounts. While simple and fast，qualities which help to reduce administrative costs and increase the usage rates of wealth，these“closed way”，qualities may also corrode the independence of the foundations and blur the boundary between governments and foundations. The“open way”tends to be transparent，competitive and optional. This method of distribution allows donations truly to enter the civil society sector and become highly productive in society. As civil organizations continue to develop，foundations in China are shifting their methods of distribution from“closed”to“open”，a change accompanied by the growth of operating partners and the introduction of competitive mechanisms. The“open way”trend will develop foundations’capacity as supporting organizations in the third sector and help them become engines of civil society in China.