This paper shows how government programs unified under the rubric of 'building socialist spiritual civilization' are institutionalizing philanthropy and transforming government practice in China. Spiritual civilization refers to a program of simultaneously advancing China's market economy and socialist culture. Using a governmentality approach, the paper explains how this strategy has been translated into practice through the government-directed establishment of a not-for-profit sector and 'national civilized city' competition aiming to produce modern cities populated by civic-minded citizens. It reveals how civil servants are incentivized to become community-focused social actors by examining new conditions of Communist Party membership and the growth of volunteering in Shenzhen. It concludes that China's governmental authorities are creating, and being shaped by, what liberal political thought describes as the non-governmental arena.