Guiding Social Investment in China

February 27, 2012
  • Brooke Avory

    Former Manager, BSR

In honor of International Corporate Philanthropy Day, which is led by the Committee Encouraging Corporate Philanthropy, I want to highlight the state of corporate philanthropy in China.   

As manager of BSR’s CiYuan initiative, a three-year effort building cross-sector partnerships to enhance the value of social investment in China, I’ve come to appreciate the rapid pace at which the nonprofit sector in China is developing.

However, over the past few years, legislation has lagged—particularly legislation related to charitable organizational governance, information disclosure, and operations. Since May 2011, China’s Ministry of Civil Affairs, the body responsible for setting such legislation, has increased efforts to create a “Corporate Giving Guide” that will help companies effectively use their resources for greater impact.  The guide encourages this in three main ways:

  • Provides standards for and best practices on effective and efficient corporate giving
  • Encourages employee volunteering and participation in philanthropy
  • Offers guidance on how companies can shift from a focus on short-term, tangible results to a focus on long-term investments and program impact

Last May, BSR participated on an expert panel (which also included government, nonprofit, and business representatives) to provide feedback on the guide. We came away with some key observations on what is needed to encourage corporate participation in social investment:

  • Increased credibility and transparency of nonprofits to attract corporate partners and funding
  • A clearly defined mission and vision from nonprofits to discourage divergent actions during program implementation
  • Programs that are co-designed by the company and nonprofit to ensure a sense of ownership by both parties
  • Close monitoring and timely reporting on program outcomes at each stage of implementation to strengthen long-lasting partnerships

Presently, the Chinese government is mainly encouraging corporate giving through tax relief for donations and award programs to recognize business efforts in corporate responsibility more broadly. To build a robust social investment structure in China, corporate participation needs to extend beyond traditional giving programs.

At a recent meeting with a leader from a Chinese nonprofit devoted to transparency in that sector, I learned that promoting corporate giving is very much on the agenda, which, along with the Ministry of Civil Affairs’ guide, should help increase the impact of corporate giving in China.

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