3 min read
- Local government is a key catalyst to social innovation, and cities like Shenzhen and Chengdu are driving this movement.
- Social economy stakeholders are aligning philanthropic giving and wealth management
- AVPN is planning exciting initiatives in Greater China to build the social economy – find out more!
China’s social investment sector is at a nascent stage but there is an increasing interest among the government, high net worth individuals as well as corporates. Yet, the increase in awareness has not converted into actual deployment of resources. In order to see this happen, more guidance and capacity building is needed for funders as well as social purpose organizations.
Local Government Support is a Key Player
Local government support plays a major role in the development of the social impact ecosystem. Shenzhen and Chengdu are cities considered to be more forward looking, largely due to their strong local government support, such as policies to promote social innovation.
In 2012, the Shenzhen Innovation Corporate Social Responsibility Development Center initiated a program called “Philanthropy Spark (公益星火)”. It aimed to cultivate the future pipeline of social impact investment leaders who combine their sense of social purpose with strong business acumen. Similarly, the Municipal Administration of Industry and Commerce in Chengdu has weaved social impact into the development of the economy, and has made the development of social enterprises a key focus area.
Forward Looking Corporates, Family Offices, and High Net-Worth Individuals (HNWIs)
Historically, philanthropic giving and wealth management in China has been completely separated and unaligned. As a result, the concept of blending both financial and social returns in one type of investment is a new one. However, like in many other markets, millennials find this concept very interesting and a few high net worth individuals (HNWIs) have started to find social impact investment as a vehicle to help pass and preserve family values.
On the corporate side, there are new social initiatives from foreign companies operating in China as well as local corporates.
Autodesk, a US-based software company and also an AVPN member, strives to solve social issues by partnering with Chinese Social Purpose Organizations (SPOs). Loving lamp, a solar energy-based device designed with Autodesk software, provides lighting to students living in remote villages who have no or intermittent power supply. As of December 2017, a total of 15,036 loving lamps have been hand delivered to students.
Tencent Charity, Tencent’s mobile and desktop donation site, has become one of the world’s busiest charity platforms. To date, some 100 million users have donated 1.7 billion yuan, or US$250 million, an average of only 17 yuan, or US$2.50, each. During Tencent’s 2017 “99 Charity Day” online charity event, 6.8 million users donated 300 million yuan, or US$44 million in one day.
AVPN has a strong commitment in China and we are planning a number of new initiatives in an effort to build the ecosystem, including:
- Capacity building trainings around strategy and due diligence to help HNWIs, foundations and resource providers select SPOs that they would like to support more effectively.
- Workshops to support the growth of social enterprises in China by bringing in best case studies and successful incubation models from around the globe. Our main focus will be to bridge the divide between high potential SPOs and funders who are in the lookout for innovative projects to support.
- Social Impact Investment Roundtables in partnership with the Impact Hub Shanghai, an AVPN member and the first Hub in mainland China. The Impact Hub Shanghai is committed to impact incubation and investment through partnerships with government, corporate, and NGOs driven by sustainability.
We are confident that the interest in social impact investments in China will continue to grow and AVPN is very excited to play a part in this movement.
The next social impact roundtable is scheduled for March 14th. Stayed tuned to more details! Please also follow us on our revamped wechat channel via the following QR Code.
For any questions please contact us at [email protected].