Foundations’ involvement in impact at differing st
By James F
Thank you Galye. I’m happy to join this panel discussion and share the dynamics in China.
I’d like to briefly introduce the organizations I’m standing for. Almost 10 years ago, together with several top tier business leaders and academic scholars, I established YouChange China Social Entrepreneur Foundation, short as YouChange Foundation.
From then on, YouChange Foundation spent around 40 million US dollars to build the eco-system for social innovation in 3 aspects.
1st advocacy of social innovation and social enterprises, we translate books, host seminars, and provide trainings. One of the main achievements, is the publication of China social impact investment report 2016, collaborated with the top government think-tank - China Development Research Foundation. It is the first in China to offer a systematic description of the characteristics and conditions of Social impact investment in China.
2nd Social Angel Investment
We identified social change makers from startup Social Enterprises and NGOs, provided grants and other types of support to more than 170 founders of these organizations, many of them got followed up funding and grew into social impact players in the field.
We incubated 16 social innovation programs in 9 years, through 3 steps:
· Find the right partners
· Set up goals and strategies together with them
· provide seed funding, other resources, and long time accompany
Finally, those long term partners of YouChange became the key junctions of value chain.
The most significant incubation of YouChange foundation is the establishment of China Alliance of Social Value Investment, short as CASVI. I am the founder and chairman of this organization and it is founded in September this year.In order to mobilize more market forces to engage in social change, together with around 50 leaders from investment, finance, business, academics and NGOs, we build up this inclusive, cross-sectors platforms with multiple players from grassroots to national institutions，to bridge the demand side and supply side.
CASVI is the 1st licensed NGO specializing in social impact investment promotion in China. Also, it’s born with an international structure. Wayne Silby from Calvert Foundation, David Galipeau from United Nations Social Impact Fund are sitting in CASVI board. And more international experts in CASVI strategic committee.
Well, then what do we do with CASVI? Long in short, 3 parts:
1st capital: to call for “Social Value Fund Pool”.
On one hand, we encourage mainstream VC and PE funds to sign up Honor Code called “No-Evil”, to agree on negative list in investment practice, like UN PRI;
On the other hand, we help social impact fund in China such as Tsing Capital to build up “social value umbrella funds”，like fund of funds, through model-design, LPs-referrals etc.
For this part, we are happy to work together with global foundation, impact funds and other financial institutions, to make a difference in China.
2nd pipeline: to build up “Social Value Projects Pool”
We collaborate with national and local business association to organize road shows, events and contest in Beijing, Shanghai and Shenzhen cross China, connecting social enterprises and social innovation companies with potential investors and policy-makers.
For this part, we appreciate to collaborate with international foundation and intermediary organization.
3rd Evaluation: to develop “Measurement Tool” in quantitative approach
We initiate 3A on-line platform to evaluate the company’s impact value. 3A stands for Aim-Approach-Action. In such tool, we score business or investment by analyzing its strategy, model, result and the most important the consistency of 3As.
For this part, we are working closely with UN Social Impact Fund now, and we are also open to align with GIIN’s IRIS and B-corp, ect.
For more detailed information, you can talk to Angela, the secretary general of CASVI, and Ling Hui, the secretary general of YouChange Foundation. They are both here at the conference.
So, if you are thinking of a new emerging region for social impact investment, contact YouChange and CASVI. We will be your contact window and solid partner in China.
This year, China published “The Charity Law” and “Overseas NGOs’ Domestic Activities Management Law”.
You may know that in the past 10 years, a great number of social organizations were founded, now there are more than 300, 000 social organizations and 5000 foundations.
On the contrary, the government are lack of experience, regulations and capacity to manage them.
According to this background, the people’s congress passes the charity law and a lot of other regulations.
It’s not just about International NGOs, but also domestic social organizations. In general, the supervision is stricter.
However, I think it is a progress, a good thing. This is an opportunity and enabling environment for legitimate and well organized NGOs to develop. Hence, we should wait and see the real impact of the law enforcement in the future.
We can see clearly that philanthropy in terms of donation has increased significantly in China after years of economy growth, and more and more millionaires, billionaires, rich people prefer to donate to charity such as building a school in the poor area. But impact investment seems a new concept to them. Because donation is easier to understand and easier to do. Also, high profile donation will easily attract public attention.
The 1st generation of rich people in China still have the high expectation of financial return after years experience of high speed growth and wealth accumulation. As for the investors, regarding social impact investment, they may say “OK, I CAN invest, as long as it brings me the high financial return for sure”.
We are in the early stage. It is the period, we need to advocate more. I am working on it.
In China we have very special, unique time and space. Because we have a very strong efficient government. And I think government pay a lot of attention to social impact through state owned enterprise to invest in rural area and poor area also state owned policy event. We have soft loan and we also have PPP, the government and private companies together to build the infrastructure also government give a lot preferential policies on to the private side, that’s the contradict of China. So in YouChange foundation we want to promote civil society and to promote private sector to participate in this process. I think our model design is from donation to investment and from investment return to donation. So this means the donation from foundation we’ll fill the gap of pre-angel, the gap of seed stage and no body notice these startup companies and we will choose the social aimed company to give them donation and let them develop into mature