China Development Brief 2013 (Winter)
On October 30, 2013, Beijing New Sunshine Charity Foundation (北京新阳光慈善基金会) – the private foundation that started as a campus club – once again welcomed an upgrade in its status. This time it was from “non-public fundraising foundation” (非公募基金会) to “public fundraising foundation” (公募基金会). However, New Sunshine is not an “old-school” public foundation with deep political ties. After the One Foundation (壹基金) and the Yongyuan Foundation (永源基金会), New Sunshine is considered China’s third public foundation to grow from the grassroots level.
Two status changes in 11 years
New Sunshine was created in response to the unexpected arrival of an illness. In December 2001, a graduate student at Peking University’s Guanghua School of Management named Liu Zhengchen was diagnosed with leukemia. While seeking treatment he encountered problems because the only bone marrow registry at the time was unsophisticated and inconvenient. In order to help both himself and other patients, he conceived of a bold idea while still hospitalized – to launch a “people’s bone marrow registry”.
Following the dictum of “from loving oneself to loving others” Zhengchen started by first mobilizing the “Sunshine 100,” a group of 100 classmates and friends who volunteered as bone marrow donors. Soon, the Sunshine 100 grew to be the Sunshine 1000. In June 2002, the Peking University Sunshine Volunteer Association (北大阳光志愿者协会) was officially established in Zhengchen’s dormitory. Later on, the association moved into a nine square meter corner office at Peking University, and hired its first full-time staff member. With that, New Sunshine began to stumble forward.
Yu Wenjie, a member of the foundation and one of its earliest supporters, recalls, “At the time, I heard there was a group of student volunteers at Peking University who wanted to become bone marrow donors, but they didn’t even have enough money to run a test to match blood types!” The cost of running a blood test for a bone marrow match was more than 400 RMB at that time. In order to support his dream, Zhengchen’s parents gave him 50,000 RMB to start the initial Sunshine 100, but the money quickly ran out. With this, Yu Wenjie started to contribute funds to pay for blood testing fees for these students. As a die-hard supporter, Yu Wenjie explained, he often introduced his friends, family, and work clients to New Sunshine to garner their support. Most recently, he participated in New Sunshine’s crowdfunding activity by shaving his head, embodying the effect of the disease’s treatment.
Liu Zhengchen recalled, “The 20,000 RMB donation Professor Zhang Weiying contributed was our first large donation.” Over the last 11 years, the committed support of noted economist Zhang Weiying has been an important force in New Sunshine’s development. As the honorary director general of New Sunshine, Zhang broke the teacher’s mold of “never showing interest in student affairs or pulling the strings for students.” Liu Zhengchen often entered Zhang Weiying’s Executive MBA (EMBA) class a few minutes before class ended to introduce New Sunshine and promote the fundraising campaign to Zhang’s students. This style is precisely what drew the Director of New Sunshine Yang Rongrong and other corporate figures to New Sunshine.
In an interview, Zhang Weiying explained his understanding of the non-profit sector and university education: “With regard to performing valuable social activities, there is a type that can become a business model. This type obtains money by providing a valuable service to society. But there are also other types of activity that mankind does such as art, philosophy, and charity. Though these types of activity hold value for mankind, they often do not become profitable. Zhengchen’s project follows the first type!” Zhang Weiying further explained, “I have many students, but I am most proud of Zhengchen! Peking University is the best in China, and so it should cultivate leaders from every industry and corner of society, and not just produce students who merely do research and become successful businessmen and earn a lot of money.”
Non-Public and Public
New Sunshine’s mission is to “battle leukemia,” which is an undertaking that involves the thousands and thousands of leukemia sufferers and their families across society. For this reason, the task also requires the highest degree of social mobilization. The mission and responsibility shouldered by New Sunshine requires it to always seek to break out of its identity so as to legally and more widely mobilize society and attract social resources.
According to fundraising parameters set forth in China’s Regulations on the Management of Foundations, charitable foundations are divided between public and non-public. Non-public foundations, like corporate foundations, overseas foundations, or family foundations, are primarily launched by a designated group with funding, and can only direct fundraising at a specific “small circle.” In contrast public foundations have public rights, and can solicit donations from unspecified groups in society, resulting in a higher level of public participation. These two types of foundations are not without merits and drawbacks. Some industry figures summarize this as “if you want to do public welfare work, and you have your own money to establish a foundation, this is called non-public; if you want to do good work but don’t have money, and you’re forced to solicit contributions and support from the people, this is called public.” Because public foundations are well-known and far-reaching, government-administered approval has always been very strict.
“We started as a campus organization, so in the beginning a lot of our activities, strictly-speaking, were ‘illegal’! For example, the charity sale of my autobiography “To Happiness” (至乐), or events such as the benefit concert we held on campus…” reflected Liu Zhengchen. Since China’s Regulations on the Management of Foundations were implemented in 2004, the government has been supportive of non-public foundations. The threshold for establishment was quite low, and the procedures for establishment were relatively simple. In order to achieve an independent status as quickly as possible, New Sunshine first applied as a non-public foundation. However as Liu Zhengchen says, “given the current system and policy environment what we always wanted was public fundraising status.”
Following the establishment of the One Foundation, China’s first non-governmental public foundation, and the Yongyuan Foundation, Beijing’s first non-governmental public foundation, the tightly closed gate of public funding seemingly loosened up. New Sunshine strove to upgrade their status. In 2012, three non-public foundations including New Sunshine applied to change their statuses to “public”, but all were rejected. There were two main reasons New Sunshine’s application was rejected: first, its funds in the previous year (2011) had not reached the required threshold of 10 million RMB; secondly, Beijing was not New Sunshine’s primary service locality.
The following year, 2012, New Sunshine focused its efforts on rectifying these two reasons for rejection. That year, New Sunshine raised more than 12 million RMB in funds. In addition, New Sunshine partnered with four Beijing hospitals to provide financial aid to patients, thereby meeting the requirement that its primary service area is Beijing. Furthermore during its “social organization assessment” in 2012, New Sunshine was rated a 5A foundation (only 5% of foundations are given the 5A rating). This “outstanding performance” was eventually affirmed by the Ministry of Civil Affairs, and New Sunshine won its public status.
From campus club to non-public foundation to the public foundation of today, New Sunshine has therefore walked a long and winding road to finally receiving the public privileges it truly requires to effectively “battle leukemia.” At the news conference marking the significant breakthrough, honorary guest and Chairman of the Narada Foundation Xu Yongguang said “this is an industry trend!”
Contributors and contributions
As the first Beijing non-public foundation to transform into a public foundation, the status change not only signifies a shift in fundraising efforts, but also hands New Sunshine a challenging transition to tackle.
At the press conference marking the change in status, a reporter asked Liu Zhengchen his vision for fundraising in the next 5 years. Liu responded that he hopes to reach 50 to 100 million RMB. At the same event Xu Yongguang added: “I hope New Sunshine achieves this public investment and develops with public mobilization and crowdsourcing. Raising large amounts of money is not the only thing that is important. I hope that when New Sunshine assesses its performance it also thinks about how it enables more effective public participation. In my opinion the public participation rate should be prioritized over any funding targets.” Xu Yongguang explained that the number of public contributors to the One Foundation had already surpassed ten million. In America, individual donations have reached 82% and according to Xu once you’ve won over an individual, you’ve won over society.
Looking at the biggest challenges faced by public foundations from the operational perspective, in addition to having differing fundraising targets from non-public foundations, each year public foundations are required to spend 70% of the previous year’s total funds raised. Without a doubt, this puts a lot of pressure on public foundations. Moreover, public foundations first work then fundraise. The quality, effectiveness of publicity, ease of channels for fundraising, project design etc all influence public participation. In addition, the special characteristic of public participation is that even though the number of donors is high the contribution amounts are low. Managing small sum contributors is not easy! As one staff member from the One Foundation said, after the foundation received several hundred million donations for the Lushan earthquake appeal, the One Foundation had to recruit more than 100 volunteers to write and mail out receipts. This proved long and boring work for the volunteers and many of them left their positions early.
For these reasons, although China’s Regulations on the Management of Foundations strictly defines the fundraising targets for public and non-public foundations, as for fundraising sources, there exists a convergence between the two. In other words, public foundations fall behind non-public. Data shows that 39% of funding for Chinese public foundations comes from Chinese citizens while 49% comes from domestic organizations. Therefore organizational donations far surpass those of individuals. For non-public foundations, 32% of funding comes from Chinese citizens, while 51% comes from foreign organizations. On top of that, many public foundations also have some government funding and support. Some public foundations that don’t want or need to publicly fundraise are prone to “living like a rich man” by finding a few big companies to take care of their funding problems. Another problem comes when a public foundation is not recognized by the public when doing public fundraising. This keeps individuals from donating and again pushes some public foundations towards collecting non-public funds. Poverty alleviation foundations – often China’s most energetic foundations – can have more than 90% of their funds from big domestic companies and other organizations. Although in recent years these foundations have slowly increased public contributions, organizational donations still make up the majority of their support.
In fact even though many non-public foundations strive to achieve public status, many ignore the extra workload this brings including stricter supervision, more difficult work, and tougher management. As Liu Zhengchen recalls: “when applying for public status we came across someone in charge of a public foundation. He jokingly said ‘why are you applying? We all want to apply to go non-public!” New Sunshine is already feeling the pressure. The original development department had just two staff members. After changing status the department immediately recruited two more people. During his interview, one of the two new staff said he previously worked for a company. During the press conference, Liu Zhengchen recalled, “as soon as I heard that he was personally responsible for protecting more than 10,000 customers, my eyes lit up! I decided to hire him on the spot.”
Professional & business support
As the only Chinese foundation focused on leukemia, New Sunshine will continue to strive to “battle leukemia”. In the future, in addition to continuing to work to financially support patients, provide psychological counseling, mobilize society, and educate the public, New Sunshine will also continue to work under expanded business horizons.
As an individual, New Sunshine creator Liu Zhengchen suffers from chronic myelogenous leukemia (CML), which was the first type of leukemia to be discovered and treated. After coming to understand the process through which CML was tackled, Liu was attracted by the clinical trial cooperative system. “China’s total number of leukemia sufferers is huge, so if we can introduce this kind of system, the space for doing clinical trials will be quite big, and under this kind of system, we can greatly enhance treatment services for patients, because the hospitals in cooperation groups will be treating patients based on the same treatment plans,” Liu Zhengchen explained. But, he later came to understand that some Chinese hospital units had once pushed for a clinical trial cooperative system, but did not continue. When asked why, one cooperative group hospital told him, “there is dedicated power in the cooperative, but when research results are published they become the accomplishment of the hospital, rather than the individual, so no one is motivated to continue participating.” With this, Liu Zhengchen called to mind ‘Robert’s Rules of Order’, a tool often used in the Chinese NGO realm. By introducing rules of order, New Sunshine came to protect the interests of small party participants.Furthermore, as a public interest organization fighting disease, in a country where the doctor-patient relationship continues to erode , China still needs medical social workers. New Sunshine actively pushed for medical social workers to participate in the treatment process, serving as an efficient communicator and middleman between patients and hospitals.
In its 2012 social organization assessment, New Sunshine was rated a 5A level foundation. On the China Foundation Center transparency list it is consistently ranked highest. Building on its experience, New Sunshine was sponsored by the Capital Philanthropy Federation (首都慈善公益组织联合会) to develop a comprehensive quality-control and management system for China’s public welfare and charity organizations. New Sunshine put forward the seven most important qualities charitable organizations should possess: transparency, equality, compliance, traceability, service-provision focus, sustainability, safety, and risk management. These represent some of China’s first comprehensive quality-control and management standards for charitable organizations. New Sunshine also developed a set of scaling-up methods to give new charitable organizations a competitive advantage.
For New Sunshine, after completing it’s 11-year journey to cross into public fundraising, the future is bright.