In today's MSNBC article Beijing starts locking poor villages at night, it is being reported that Beijing's migrant communities will effectively be locked down in an effort to prevent crime. According to the article, residents entering and exiting areas will be asked to show their documents (assumed to be Hukou and/or temporary residence permits) at night in the 16 villages. Experts in the article are quoted as saying that this is a move that not only looks bad, but also will only serve to more deeply ingrain existing discrimination. Discrimination that is part of the core problem of migrant crime.

It is an action that is surely being taken with short term security goals in mind, but as the quoted experts suggest, the long term implication of the "Sealed Management" policy are likely to only exacerbate the underlying issues that exist. Which will likely do little to relieve the pressures of future instability and security within the population as the feelings of isolation and discrimination are only reinforced by policies that single them out as "the problem".

Long term the problems are more complex.

Issues of economic and physical security at the forefront of crime, long term the policies will need to be focused on offering migrants an opportunity to reap the rewards for their work to build and support cities, but also ensure that their investments be protected.

To learn more about my thoughts on creating stable communities and cities, please refer to my recent pitch from the BMW Young Leaders Forum

This is an old post that I originally had at another site, but while catching up on some reading, I was reminded by the power of the interviews we did last summer, the stories we began to tell, and the sense of respect I have for China's migrant workers

Earlier in the year while a few of my interns were inbetween assignments, I tasked them to get out of the office and do some street interviews. Now, executing street interviews was nothing new for them, but instead of taking out a video camera and asking questions to our typical targets, I wanted to push them outside their boundaries and speak to people whom they were more likely to walk right past on their way to work.

Migrants. Cooks. Sidewalk Seamstresses. DVD vendors. Pot Sticker vendors. Fruit vendors. Crane Operators. Bus Drivers.

It was a project I named Shanghai's 100 hardest jobs, which was (for the sake of full disclosure) inspired by the Discovery Channel program Dirty Jobs.

Initially, my interns were a bit skeptical, and were giving me the face of "he has gone crazy... again", but over the course of the next few weeks the first team completed about 30 interviews (2 more teams have since completed nearly 100 interviews), and were looking for more. In short, they were not only hooked, they were seeing a side of Shanghai that they never new existed.

... and they were Shanghaiese.

Reading through the interviews (we use the same questions for each), one is given a really humbling glimpse into the lives of these people and how hard they have it. People who are busting their humps day in and day out, and eating bitterness, for a common cause.

Hope and opportunity.

Cigarette Vendor - female from Henan

Q: Would you want your children to have this job?

A; No. My husband and I have this job/career because we lack of qualified education background. Letting them step on our old roads is the last thing I want to do. To my 14-year-old girl, I don’t have so many strings attached and just want her to live a happy life; as to my boy, I hope he can be a government official someday, a big name who has power (laugh).

Watermelon Vendor

Q: What do you want most right now?

A: We hope our boys can go to school in Shanghai. The education conditions are much better than we have in Linyi and we can take care of them while making a living here.

Hat Vendor

Q: If there was one thing you could change about your job, what would it be?

A: Change? It is such a luxury to me. How can I dream about changing my current status? I want to do my own business, like opening my own restaurant, but who will give me the money? I want to recruit and train my employees, but who will teach me how to manage or run my place? I dare not think of change. I guess my only hope is my son. He is the one can bring real changes.

Everything comes down to hope and opportunity

For the next generation.

With the last 2.5 years being the most active time in China's recent history of citizen based philanthropy, it has become clear that the level of opaqueness in the system has become a real issue for some.  That while the historical system of donations, largely fuelled by corporations looking to leverage their donations into something else, benefited from a level of opaqueness.  the current system that is meant to encourage public engagement does not.

This was perhaps highlighted best during the 5.12 Earthquake when firms, and celebrities, were thrown into a media cycle that no one had expected.  That, unlike before, people were paying attention to how much was donated, by whom, and for what cause, and additionally, it was also clear that, unlike before, the organizations on the receiving end of the donations were going to be expected to show a far higher degree of transparency than they were used to.

It is an issue that has come up recently on a number of occasions when speaking to students, corporations, and ordinary people, and it is an issue that has recently been highlighted in a Global Times piece Skeptical Chinese donors need concrete results where Wang Zhenyao discussed the difficulties of fundraising, reporting, and managing expectations:

To persuade people to support you, you need to have a strong reason for them to do so. Good causes and good proposals speak for themselves. Take the project on autistic children in Shenzhen for example. The Shenzhen Autism Society (SAS) gathered hundreds mothers with autistic kids and wrote to the central government. The top leaders learned about the project and sent inspectors there to learn how SAS helps the young patients. Now SAS receives millions of yuan from the local bureau every year.

In addition to that, you also need to show people what you have done with the money received. The lack of transparency creates misunderstanding. There is a common speculation that the money has gone to the pockets of corrupt officials. What I did back in the Ministry of Civil Affairs to combat such misunderstanding was to have flyers and pamphlets printed out and sent to all sponsors and related departments.

After seeing the smiling faces and reading the reports about the people and projects that received donations, the donors and public had a much better idea of what the charity had done. Some charity organizations posted their statistics online but received unsatisfactory results.

It is a situation that I feel at times is grounded more in ignorance than curiosity as average citizens are looking to understand the "impact" their money is having, and it is a condition that I feel will require NGOs, GOvernment Agencies, and 3rd parties to begin working together in an effort to educate the public, manage expectations, and provide a clearer picture of where NGOs are spending the money.

Why is doing this so important?

Simple. On a fairly regular basis, I find myself fielding questions about the impact of donations, the amount of money that an NGO spends on overhead, and whether or not NGOs are simply wolves in disguise, it is clear that regardless of where the education gap lies, it is NGOs who will be forced to pay the price in the long term. that, without addressing the transparency concerns of donors and opening themselves up to 3rd parties, they will eventually risk their brand, funding streams, and eventually programs.

As part of our work to define and support the efforts of China’s social entrepreneurs, the Collective Responsibility Social Entrepreneur have been working on a series of exercises. Exercises that are mean to begin developing a framework that defines what is a social enterprise (non and for profit) is in China, as well as to develop a stronger understanding of the constraints that these entrepreneurs and organizations operate in, the challenges they face, the potential scale of their ideas, and areas where they can be supported in their endeavors.

The first exercise was a simple one.

Take 25 of China’s most well known social enterprises and place them on a chart to measure their potential scale (size of bubble), their primary mission (X Axis), and their financial model (Y Axis).

And as you can see in the chart above, there is a wide spectrum of organizational structures, financial models, and scale in China’s social entrepreneurs. With the more nonprofit group found in the lower right quadrant (Hands On Shanghai, 1KG, Huadan, Golden Bridges, and others), it was clear that the perception was that the more socially focused one’s organization was, the more reliant on fundraising and event based revenues it was. While, on the other side of the spectrum, groups like Shanghai Organics, Naked Retreat, and Bambu Home have developed (in the eyes of participants) a financial model that is focused more on profit, and has a stronger product or service model to support operations.

More interesting though was that when we plotted the perceptions of participants against those of the founders, what we found was that there were a number of groups who had clearly done a good job of communicating their mission and message externally, and others who had not.

That, and I will use my own first social venture HandsOn Shanghai, as the example, there were a range of opinions about the potential scale of HandsOn Shanghai. For some, a volunteer platform was something that offered limited scale, while for others, they took the view that volunteerism in China held large potential. Mission wise and economic model wise, we were nearly in line (at least everything was within the same quadrant).

However another group, who I will keep nameless, had a very different set of perceptions. That, even though they are one of the more well known social ventures in China, they have largely created a name for themselves without creating a name that had a managed focus in the minds of participants. That, even though they are perhaps one of the more well known brands, there is wide range of perceptions about their core mission, their economic model, and their scale. And that confusion was even shared by the cofounders (red dots).

In the end, and the above charts are only a fraction of the existing body of work, the trends we are beginning to see are quite interesting. That in general, the more profit driven the group, the increased perception of scale and economic sustainability exists, while those on the NGO side (lower right) are seen to have a smaller potential scale. And that while there are clear cluster patterns emerging, there are still a number of hybrid organizations that exist and are creating a bit of gray space between the black and while.

If you would like to participate in the first exercise, feel free to send an email to SE (at) collectiveresponsibility.org and we will send you the file to be completed.

As part of our first official discussion in the Social Entrepreneur committee, and one in fact that is often had in the wider community, we began a process of finding a way to put our finger on what is a social enterprise vs. what is an NGO.

Clearly, it was a conversation hat was not goign to be solved by the 8 of us, and clearly it is a question that will only be answered in time, however to help us develop some framework that would help to narrow the discussions we began with a few simple classifications.

1. Reason for being: Whether or not the prime motive for the organization is one of social mission, of profit motive, or somwhere inbetween

2. Financial Structure: Was the organization one that had (or would) develop a sustainable product of service based revenue stream, was its primary source of income event based (fundraisers, grants, etc), or had it developed a hyrbid model

Being perhaps the two that we could agree on, we decided to start there.... btu what do you think?  If you were going to try and develop a definition of what is a social enterprise vs. an NGO, what would you look at? 

What are the areas that make for a successful organization, and should the primary focus be one of legal structure a nd financial models, or more focused on programs and impact?

Let us know by leaving a comment

In the last 12-18 months, interest in China's social entrepreneurs has really heated up. 

Nothing new to China, what is interesting about this new group of people is that there are so few people or groups identified who would fit any classic EU/ US definition of this structure, but there has yet to be a group within China who has put forward their own "Chinese" definition either.  Something my many conversations with members of the community, inside and out of China, only continue to support.

Recently, through the development of a Social Entreprenurship Committee (we held the last meeting 2 weeks ago), we are trying to change that.  That, through engaging the various stakeholders, we will help develop a framework that will help to define who/ what is a social entrepreneurs, what drives these people/ organizations to exist, and what are the organizational issues they face as the move forward (hint: there are bigger problems than money).

We hope you will continue to follow us through this process, and while we will be releasing some of our notes the the readers, we will also be asking you for your help in asking the big questions that we are debating.

Why shouldn't one expect to see more companies follow google's lead? simple.. The people who runs the worlds largest firms are by and large not invested in their firms beyond their pay package.  Executives are commodities whose decisions are made by the short term equation that with profits comes opportunity (for them), and is not about building companies.  On the whole.

That, for all the arguments about whether or not the decision was made to comply with a firm's motto, or what influence the founders upbringing had in complying with chinese law, the fact remains that the founders of google are still the largest shareholders of the company.. And more importantly have built and retained a culture whereby they can make choices that do against the commonly accepted business rules that they are often measure by.

Which sadly leaves me to believe that few firms will ultimately put the firm's codes and values out in front of their profit motive. that, when they entered China they made peace with any moral objections that may have existed ( we should not assume that everyone has a moral objections to china, its policies, or those in power).

So, before looking to others to make such morally uprightous decisions, keep in mind that some organizations are better structured for such decisions.

With plent of quips about the level of responsibility and engagement of the post 80s generation, KK has arranged what looks to be a very interesting discussion on this issues as it relates to social entrepreurship for next week (March 31).

A panel discussion format, the discussion will address the following topics:

• What are the aspirations of the post-80s generation?
• Will they be attracted to the rising field of social entrepreneurship
• What are the opportunities and challendges?
• What could we do to support young social entrepreneurs?

If interested, you can download the full flyer here.

On April 9, Ashoka Fellow Ramji Raghavan will be speaking at an event in Shanghai, and you are invited:

Venue: Shanghai No.1 Art Museum, No.1 Jianguo Zhong Road, Luwan Dist, Shanghai
Time: Morning of Apr 9, 2010 (around 1.5-2 hour) Agenda: 5 min - Short film about Ramji's work 30 min - Presentation by Ramji 60 min - Discussions with audiences
Guests: Around 40-50 social entrepreneurs, business leaders, venture philanthropists, academic experts who are interested in social entrepreneurship, and a few journalists from media Organizer: One Foundation

Brief introduction of Ramji (download complete bio here):
In 1998 Ramji left his commercial career to realize his dream: "retire early and have a school in the foothills of the Himalayas, where we will teach children to be creative leaders.” He founded Agastya, an innovative education organization in India.

Before Agastya, Ramji has worked as a senior executive in organizations in the US, Europe, the Caribbean and Asia and created and managed businesses in financial services, consulting and software. In addition to later co-founding a New York based investment bank and broker-dealer, he has also held positions at
Citibank, Cedel Group, and Morgan Stanley & Company International Limited.

As Agastya’s founder, he has written articles on education for Indian and foreign journals and spoken on creativity and leadership to audiences throughout India,  the UK and US.

Late last week, when the State Administration of Foreign Exchange released new regulations (right click to download here) governing how China based NGOs register their inbound donations, several media outlets (AP, SF Examiner, and SCMP) put out coverage that would leave many to believe that this new regulation was going to have an immediate and negative impact on NGOs operating here:

"China has surprised thousands of aid groups by stepping in to regulate overseas donations for the first time, complicating efforts to get money from supporters in the United States and elsewhere. Some groups warned that losing the support could force many to shut down."

The regulation, which was pretty benign in nature, was viewed as another tool that would be used to clamp down on NGOs, and their activities in China, and they offered a number of expert opinions as to the severity of the impact.

However, after reading the regulations through, I am still unsure.  Not unlike many other regulations in China, this one is very loosely worded, non-specific about who exactly will oversee the implementation, and leaves a lot of room for loopholes. 

And while it is a regulation that is by its very nature meant to "limit" activities, or perhaps better record is a better term, and while that typically has meant a more restricted environment for industries in the past, I am also unsure that this regulation would achieve that either.

In fact, depending on how one would lie to read this, it is entirely possible that this new regulation could end up supporting the development of NGOs in China. Which would be a good thing! 

First a few operational things to point out:

1) Even if one were to take this document at face value, and with a negative line, the fact is that this document would fail to have much of an impact anyway as it fails to accurately account for how donation transactions occur.  this document, if you read it letter for letter, is meant to force local NGOs to go to bank and submit a document that would certify the inbound donation.  If this is done in a manner similar to a typical business, then the money would already be in China, but more importantly, the question of where the money originated from was left out of this document as it assumes the donor would be making a direct donation from overseas account to China account.

A transaction that (1) rarely happens without an entity in the middle and (2) fails to follow the facts that foreign donors rarely send money directly to China as they get no tax benefit by doing so.

So the big loophole is that much of the money coming in is in fact not a donation, but an internal transfer between the NGOs legal/ banking center and China.  It would have already have been recorded as a donation overseas, which would negate the technical need to call it a donation in China

Which leads to my first big conclusion.  This regulation is not meant to be the norm, at this time, but to be used against the exceptions.  that, rather than push and effectively monitor all NGOs, what this document will do will give a tax auditor (or some other agency) a regulation that they can use against a specific NGO / group as part of a "normal" investigation of their operations.  Should any donations from overseas group come up, particularly those that are in the gray area, then the NGO could be presented with this regulation. 

2) In comparing this new regulation to others worldwide, I would have to say that this document in its current form is still very lenient in its intensity.  Yes, it is technically "possible" that donors would have to present themselves in China, but for anyone who has ever donated money across the U.S. border you wil know that the paperwork involved in that process (called equivalency) is far more cumbersome to the donor and benefactor.

Where this document gets interesting for me is that it could potentially open a door for NGOs in a very positive manner.  That, with one of the big issues being NGOs forced to registered as corporations, and their donations being taxed as a result (booked as revenues), this regulation could unwind that.  That, thorough the regulation, tax authorities would now have a document that say that NGO XYZ received 123 from Donor ABC on DATE, and with the SAFE seal on that document, the NGO would have the ability to strip that donation out of their revenue and thus reduce their tax burden.

Also, and this is thinking bigger picture and longer term, the setting up of donation accounts is a new piece of infrastructure that could be build upon for legal and tax regulations rumored to be in development.  Another step in the right direction as well.

In the end, what is clear is that China is now looking to develop mechanisms that can create strength in how NGOs are regulated.  for some, this is going to be viewed in a negative light because for some the gray areas that they occupy are comfortable.  However, if this document leads to other steps like legal and tax regulations, and the removal of tax burdens, then I would say that the fears of many will quickly turn themselves into hope for the future.  That does not mean that there are not more hurdles to come, but baby steps are being taken.