Social Entrepreneurship, Philanthropy, and Innovation in China and the United States

Blaring news headlines about a developing trade war between the governments of the United States and China lie in sharp contrast to the emerging partnerships developing between philanthropists and social entrepreneurs from the two countries. As I learned while on a recent delegation from Stanford Center on Philanthropy and Civil Society (PACS) to Beijing there are far more similarities than differences when it comes to how American and Chinese civil society actors are helping solve some of the world’s most pressing problems.

On March 27-28, Stanford PACS co-hosted its seventh annual conference at the Stanford Center at Peking University with the Leping Foundation—one of the largest funders of social entrepreneurs and a leader of philanthropic education in China—bringing together an audience of more than 200 Chinese philanthropists, nonprofit and social enterprise leaders, students and academics, to hear from Chinese and American experts about challenges and opportunities in the field. The following are some of the most prominent trends that emerged from our two days together:

1. New wealth and a new Chinese charity law are powering a new wave of philanthropy in China. With the number of Chinese billionaires soaring from three in 2004 to 568 in 2016, and with 8 percent of the world’s super-high-net-worth individuals (those with more than $50 million in assets), these new Chinese millionaires and billionaires are using philanthropy to try to help solve China’s social ills, such as poor rural education and an aging population. China’s first-ever charity law passed in 2016 has made philanthropic giving easier, unleashing large philanthropic gifts, such as Alibaba Group co-founder Jack Ma’s $44 million gift to public hospitals in China. In particular, many young people in their 20’s and early-30’s from wealthy Chinese families have a strong sense of the importance of giving back and are building and leading family foundations.

2. Philanthropists in both the United States and China want to give more than just money. Donors in both countries seek opportunities to enhance their financial contributions with donations of time, skills, and access to their networks. For example, Social Venture Partners—an organization that connects professionals with opportunities to use their professional skills to support nonprofits and social enterprises—has been thriving in both the United States and China over the past decade. This trend toward giving more than just money is an opportunity to harness even more resources for the greater good.

3. Funders must invest in capacity building for nonprofit and social enterprise leaders. Another common thread between the United States and China’s nonprofit sectors is that they are starved for resources and talent. Both countries face the challenge that nonprofit staff are severely underpaid, thus making it hard to recruit high-quality employees. In the United States for example, only 20 percent of funding is unrestricted, which means nonprofit and social enterprise leaders are unable to invest in building capacity and are starved for basic skills such as management training, fundraising knowledge, and strategic planning support. To combat this challenge, as Jennifer Wei, organizational effectiveness officer at the William and Flora Hewlett Foundation taught in her workshop, it is critical that foundations lead the way in funding nonprofit capacity building.

4. China has an opportunity to create a vigorous social enterprise sector. Whereas historically the United States has strongly entrenched boundaries between the nonprofit and for-profit sectors, because philanthropy is still nascent in China, there is an immense opportunity to blur the lines between business and social good. As a result, there is a growing social enterprise movement in China, with a wave of new social businesses emerging, such as First Respond—a B Corporation empowering local citizens with life-saving skills like CPR—and Kiaterra, a startup focused on monitoring and mapping the world’s air using data from an air quality monitor they sell for home-use.

5. A collectivist model of philanthropy is flourishing in China. Finally, as Harvard Kennedy School visiting professor Christopher Marquis noted in presenting his research, networked models of philanthropy continue to thrive in China. Unlike in the United States where wealthy individuals often create a private foundation with their name on it and take full control over distribution of the assets, in China funders often collaborate with colleagues and friends to pool resources for good. This approach is one that US philanthropists could learn from their Chinese peers.

Indeed, the path toward creating a culture of philanthropy in China isn’t lined with roses. Philanthropic giving and nonprofit activities are still heavily monitored by the government, undoubtedly having a chilling effect on initiatives that could be perceived as misaligned with or critical of the government, such as human rights. But the passion and energy of those who participated in the Beijing conference is evidence of growing leadership in the field of philanthropy in China, and the potential for cross-border bridges between philanthropic communities so that we can all maximize the potential of our philanthropic initiatives.

Read more stories by Kathleen Kelly Janus.