VA
Insights

Recently, VA was invited by the British Council to conduct a survey among its “Skills for Social Entrepreneurs Program” trainees, which intended to reflect the status quo of China’s social enterprise (SE) sector. Among the participating organizations, there were 107 SEs and social entrepreneurial projects, and 59 organizations that plan to apply SE models.

We found that the SE sector is developing rapidly. Over 80% of all SEs today started within 5 years. Also, SEs that have been operating for many years are mostly active in traditional service areas such as special children, poverty alleviation, elder care, and the physically disadvantaged. However, more and more SEs that emerged in recent years are engaged in youth development and employment, women empowerment, community development, and supporting other charitable organizations. Those that plan to apply SE models are also more likely to be involved in these service areas. In our point of view, SEs in China are moving towards diversification and professionalism, and putting more emphasis on sustainable impact on beneficiaries’ quality of living as well as construction of an industry eco-system.

Seeking sustainable solutions

As the concept of sustainability becomes more and more popular, all sectors of the community are taking actions to enrich the content of sustainable development. The SE sector is no exception. For example, Xiji County Qingyuan Harmonious Community Service Center (“Qingyuan Center”) is constantly exploring sustainable solutions to community problems. Xiji County, located at the south of Ningxia Province, exports 140,000 labors every year. Old people are usually left behind. Poverty and loneliness have forced many of them to commit suicide, some even not noticed until a few days after they pass away. In order to solve this problem, Qingyuan Center did not just build a nursing home for it would not only be costly but unable to meet old people’s ultimate needs; instead they set up a lamb raising cooperative. These two things may seem irrelevant. But Qingyuan Center believes that the root cause of the problem is the inadequate economic sources for young people due to the restriction of local environment. By lending purebred lambs, Qingyuan Center hopes to provide extra income to local farmers and attract them to stay. Besides, Qingyuan Center uses profit to organize community events to advocate for filial piety for the elderly. Furthermore, Qingyuan Center sponsors training for a few villagers to become qualified home-based elder caretakers.

Emergence of professional intermediary service providers

There is an increasing public demand for the philanthropic sector to operate more professionally. But our survey reveals that capital restriction, lack of talents and inadequate expertise in marketing and sales are most common bottlenecks among SEs. Due to the strict control of operating expenses, charitable organizations usually have difficulties in getting the kind of talents they need. With regard to this phenomenon, many intermediary SEs have emerged in recent years to provide professional services to charitable organizations, and the services are no longer limited to capacity building.

For instance, Shanghai Charity Explorer (SCE) focuses on providing charitable organizations with branding service. Despite of their great social impact, many philanthropic projects are known to only a small group of people; some are even forced to come to a stop as a result of inadequate resource support. These are all because of weak communication and lack of communication channels. What SCE does is to provide one-stop branding service at a price lower than the market, including design, video making, project packaging, and public relations, etc. SCE hopes to help charitable organizations enhance their public images with clarified branding positions and stories.

Increasing Cross-Sector Partnership

The development of the philanthropic sector does not solely rely on charitable organizations. Government, media, commercial business, public are also stakeholders. Government can be supportive by purchasing social services. Media can promote philanthropic culture as well as monitor charitable projects. Businesses can practice Corporate Social Responsibility not only as donors but also partners of charitable organizations. There has been an increasing trend of cross-sector partnership and resource integration, which gives birth to a lot of interesting SE models. Take Xiaotidazuo (小题大作) as an example. It is a website that connects businesses, charitable organizations and users, and allows them to interact online. A user can choose a charitable project that interests him/her and answer some questions. The more he/she answers correctly, the more businesses will be attracted to donate for the specific project. A user can also choose a business-sponsored charitable project. Every time when the user answers certain numbers of questions correctly, the company will make donations accordingly. Ultimately, this creates an all-win situation.

Again, we are delighted to see that the SE sector in China is moving towards diversification and professionalism. The enhanced perception of philanthropy, emergence of professional intermediary service providers, and increasing cross-sector partnership will further ameliorate the charitable industry eco-system and advance SEs’ pursuit of sustainability and scalability. This no doubt is exciting for social investors.