While reading the recent news that Shanghai based Social Venture Group (SVG) will be launching their most recent project, a website called China Charity Gift to facilitate donations to seven China based charities. It was a project that I know they have been working on for a while now and while taking a sneak peak at the Beta site, I thought that site was really well done, and had the potential to grow into a really nice platform for SVG (and its partners).

For a couple of days following that, I while thinking of the potential of the site, I found the question "Is China ready for online donations?" stayed with me.

It was not a question that was linked (directly or indirectly) to the site itself. It was wider than that. That, while China certainly has the people (it is the largest online market in the world), the resources (it is one of the few cash flush countries in the world), and the issues in need (pick an issue.. any issue), it is also a country whose history with a short history of what I like to call "engaged" philanthropy (see: The Genesis and Impact of Poor NGO Transparency in China for more on this).

This short history of "engaged" philanthropy, in the context of online donation platforms becomes important from three perspectives: donor, benefactor. and platform.

From the donor’s perspective, the issue I see what will donor expectations be when they arrive at the site, and what can sites do to most effectively meet those expectations. Keeping in mind the fact that "engage" philanthropy is still relatively new, and that the average donor was previously only able to channel their money through a handful of organizations (usually through an envelope) or a drop box, this platforms (and the others that are sure to follow) could present a new problem to the donor. The problem of too much choice.

It is an issue that I find on a regular basis now when speaking to individuals who are looking to donate time and money to a "cause". They want to help, are often at a loss for where to start, and when asked "what is an issue you are passionate about", a common reasons is the shrug of a shoulders… and that goes double for some of the wealthy who have dumped millions of RMB into some very public funds.

So, what was once a problem of having little or no choice at all, with less than ideal impact, is not a problem of having too much choice and an uncertainty of how to measure impact. It is a set of conditions that has created a new gap where donor expectations are growing in ways that are not necessarily in line with the realities of the market. That, in their search for firm ground, they are in some ways taking steps in the wrong direction and failing to understand the true purpose/ needs of the organization or issue they are looking to engage themselves in which, can at time, lead to a bad investment, investment experience, or both

So, the first hurdle I see for these sites (which I don’t think the SVG will have a problem with) will be to understand this gap, and build their infrastructure in such a way that the gap reduces in size to a what becomes baby step. Infrastructures that provide information on an issue, highlight the role of the partner, show a donor how far their money goes, and then (over time) releases project specific reports that close the loop for donors.

Second to that, there is the risk of these platforms to the benefactor, a risk position where there are two areas of exposure. The first, directly faces the donor and is related to the shifting expectations that donors will have from their online "engaged" experience, and more specifically that "engaged" donors are now expecting a lot more from those they are donating their money from: higher levels of transparency, reporting, impact, and scale.

New, and at times immature, expectations that place strings on the donations. As a recent survey by China Charity & Donation Information Center highlighted, when they found 90% of public was not satisfied with current levels of NGO transparency. That unlike before where a donor may not have necessarily cared about the benefactors follow through on the donation, or the impact of the donation itself, donors these days are more than happy to express their frustrations in various forms.

It is a risk that translates into more work for the NGOs who participate as (1) they will have to build a level of trust and credibility with site users and that will translate into (2) benefactors having to do more administrative work to open up to a level that meets the market needs. Two facets that are themselves manageable in the most mature markets, but in China where online discussions can quickly heat up, these two things can become a major handicap for an unprepared organization.

Finally, from the issue of the platform, where I see a couple of interesting gaps is how these the platforms themselves will grow, develop followings, develop stable sources of credible projects, and how they will serve to education and retain their donors. And with online donations having the potential to become the most valuable tool for NGOs looking to raise funds from China’s 200+ million online users, the major risk here is that the tool’s shine wears off and donors once again fail to engage at any sustainable level.

For me, it is quite clear that while this uncharted niche that real potential in China to develop into a trusted platform where donors and benefactors meet, it will be important to make sure that these platforms are able to provide the information, projects, and transparency that donors need to make decisions they are comfortable with.. and return to the next time they are looked to be an engaged citizen.

I wish the SVG team all the best in their launch next month, and I look forward to seeing how this platform (and others like it) will play apart of (or change) the philanthropy landscape in China.