VA
Insights

Preface: On August 26, 2020，VA participated in the China Foundation Development Forum 2020 Summit as a representative of the industry support organization. Several guests had a debate on “foundation and social resource allocation”, which inspires us to share some observations on this topic based on the experience of foundation evaluation and strategic services from a third-party aspect.

The mission of philanthropy is essentially to mobilize social resources and solve social problems. How to attract social resources and make good use of them are essential for charitable organizations, especially for foundations. With the dual identities of resource aggregator and distributor, foundations’ capability of making the cake bigger and distributing it well is practically related to the future of social sector.

1. Make the Cake Bigger

The charitable donation in China is far behind the developed countries. According to the Giving China 2016, the total donation in the US and the UK accounted for 2.1% and 0.52% of its respective GDP; however, the total donation in China was 139.3 billion yuan, which accounted for only 0.19% of its GDP.  Historical development, cultural values, policies and regulations obviously played an important role in charity giving. Meanwhile, it is possible that social resources (not limited to charitable donations) can increase rapidly through innovation.

For example, in 2017 Shanghai WABC Foundation and Tencent Foundation jointly launched the One Yuan Gallery campaign, which went viral on social media. Within just a few hours, the campaign reached the fundraising target of 15 million yuan with participation of over 5.8 million person times. The project’s success was phenomenal.

Like the One Yuan Gallery, the Ant Forest Project jointly initiated by the SEE Foundation and Ant Group has also provided convenient channel for the public participation. Since its launch just four years ago, the number of individual participants has exceeded 550 million, and more than 200 million trees have been planted and maintained. The planting area is equivalent to 2.5 times the size of Singapore, and the carbon emission reduction has exceeded 12 million tons.

The Village Early Education Center Project (VEEC) of the China Development Research Foundation is another great example that has done an excellent job in mobilization and integration of various social resources. The project utilizes government properties in rural areas such as idle school buildings and party member activity rooms as venues for early education centers and recruits local young people as volunteer teachers. This model has been recognized and supported by many local education departments. For example, Guizhou provincial government built 5,100 kindergartens in rural areas, which have benefited 300,000 children. Sichuan and Yunnan have also set the policy targets of “One Village One Kindergarten.”

By cultivating new participants, leveraging the business capital, and revitalizing government and community resources, these popular projects have broken through the boundaries of the existing resources. As a result, they have not only realized their own development but also solved social problems. Moreover, these projects have helped the foundation industry build a better public image and hence have opened up more possibilities for various social resources to enter social sector.

However, there are more competition on existing resources in the entire foundation industry. To make the cake bigger, foundations need to focus on the four aspects below:

1) Innovative Awareness

Innovation is key for any industry to maintain vitality and continuous growth. In the case of One Yuan Gallery campaign, it was eye-catching mostly due to its artistic element. Those beautiful and hopeful art works made by special kids, combined with the low entry barrier of one-yuan donation, made it more suitable for spreading via circle of friends in comparison to those usual tear jerking charity projects. Before the Ant Forest Project started, desertification control projects had existed for many years, but the traditional model made it impossible to succeed like the Ant Forest, not to mention within a very short period of time.

2) Value Creation

The key for projects to attract more resources is to solve social problems effectively. In the case of “One Village One Kindergarten”, the project has achieved effective outcomes by making full use of idle social resources. In Ledu District, Haidong City, Qinghai, the project tracked the academic performance of 8,531 beneficiary children after they entered compulsory education. The study found that among top 40% students over 70% of them attended the village kindergartens. Those children used to be left behind and in poverty, and most of them would not have had the opportunity to attend kindergarten if the project had not had existed.

3) Collaboration and Sharing

Foundations should collaborate with peers or other relevant stakeholders for project research and development. By doing so, they can better understand the needs of all parties earlier, leverage each of their advantages, and jointly develop an innovative and multi-win model. Taking the Ant Forest Project as an example, business thinking, Internet thinking, and product thinking gave vitality to the project, which consequently achieved good social and business results at the same time. Namely, Alipay platform directs participants to the Ant Forest, and the Ant Forest users help Alipay in many aspects such as length and frequency of usage, social interaction, and usage scenarios. Therefore, the Ant Forest Project has been able to receive Ali’s continuous investment of hundreds of millions of yuan each year.

4) Adherence to the Bottom Line

Every charitable organization should scrupulously abide by the bottom line of philanthropy and strictly control risks. Each vicious incident will not only greatly affect an organization’s public credibility, but also could be a major blow to the entire industry. Taking the 2011 “Guo Meimei Incident” as an example, although Guo Meiling was not directly associated to the Red Cross Society of China, netizens’ criticism and doubts kept building and negative information flooded the Internet, which lingered for a long time. As a result, the annual financial income of the Red Cross Society fell sharply from 3.26 billion yuan in 2010 to less than 600 million yuan in 2011, and the total donations in 2011 also fell by 18%.

2. Distribute the Cake Well

No matter how big the cake is, the total amount is limited. How to maximize the limited resources on hand is a question that a foundation, as a resource allocator, needs to think carefully.

We would like to share with foundations the three major observations below:

1) Don’t overlap, focus on gaps

Each foundation needs to be clear about its main battlefield strategically to avoid putting resources in similar places and causing uneven distribution of resources. What social issues and topics does a foundation need to focus on? Which intervention strategies should a foundation adopt? Pilot, research, advocacy or capacity building? If poverty alleviation was the main task for a foundation in the past, at the new stage of China’s social and economic development, what should a foundation do when social needs are becoming more diversified and the new economic development brings new marginal issues?

Since its establishment in 2008, Vanke Foundation has been involved in many fields such as environmental protection, ancient architecture protection, children’s health, education development, and targeted poverty alleviation. In 2018, the foundation developed a new five-year strategic plan, focusing its work on sustainable communities and making community waste sorting as the top priority. Although community waste sorting is a tough problem to solve, Vanke Foundation’s strategic focus has greatly boosted the confidence of those social organizations active in this line of work, and it is the best place for the foundation to put its resources in use according to its stakeholders.

2) Build hubs and develop professionalism

Foundations usually have more resources than other NGOs, and some of them even have qualification of public fundraising. Their project management is more standardized and professional. However, foundations may not be as good as those highly experienced local NGOs in terms of expertise in specific fields, understanding of social issues, capability and efficiency of project implementation. Therefore, foundations need to utilize hubs, handing over professional matters to professional organizations, and raise funds and link resources for hubs and local NGOs.

Beijing Chunmiao Charity Foundation mainly serves for children with congenital diseases. During the pandemic, the foundation took the responsibility to fight against COVID-19. Being aware that procurement of medical supplies was a professional job, the foundation handed it over to professional partners such as the medical team of Fosun Group and the team of volunteer doctors organized by Hao Nan, founder of Zhuo Ming Disaster Information Service. The foundation only focused on fundraising and management. The  joint actions were speedy, professional, effective and recognized by the funders.

We believe that a qualified hub organization should not only link resources, but also further build up professional capabilities aside from coordination capability. The professional capabilities include the above mentioned ability to conduct dialogue and form alliance with various resource providers using innovative approaches, the ability to break through boundary of the existing resources to “make the cake bigger”, but also include the ability to constantly learn from partners by summarizing experiences and lessons and accumulate knowledge on how to choose talent, carry out work, and support partnering organizations. Furthermore, the ability to pursue effectiveness and values of its work, reflect on the results as well as tap into more resources and influence a wider range of partners is very important for a hub organization.

3) Be an engine and cultivate new forces

Given a large number of complex social issues, NGOs still have a huge room for improvement in terms of quantity, structure and quality. Making the cake bigger is also about attracting more organizations to share the cake. Some leading foundations can act as engines for philanthropy development.

For example, Narada Foundation, One Foundation, and the Harmony Community Foundation have played their part in cultivating grass root organizations to provide good projects, resources, and services to the local communities. In addition, Dunhe Foundation, SANY Foundation, and China Foundation for Poverty Alleviation have provided guidance to the sector on philanthropic culture, charity for all, scientific spirit, and social enterprise, etc., to further advance philanthropy. Lastly, Ginkgo Foundation, Zijiang Foundation, and Laoniu Brother & Sister Foundation have played an important role in fostering much needed professional talents with broad vision and systematic thinking, familiarity in the charity’s operating mechanism, as well as skills of resources integration and communication.

In the near future, we hope that foundations can establish a diversified, innovative and shared resource system, find their own value-added points in social services and social governance, accelerate their transition to platforms and highly professional organizations, and spare no effort to build regional and sectorial ecosystems.