An Interview with Ding Li, Non-Profit Incubator

Editor’s Note

Ms. Ding Li (丁立) is Vice President of Non-Profit Incubator (NPI) – one of the leading organizations that provide support for NGOs, social innovation and entrepreneurship in China. She also sits on the advisory board of the Global Social Entrepreneur Network (GSEN) and the Asia Venture Philanthropy Network (AVPN). Ms. Ding has worked in China’s nonprofit sector for over 13 years, before which she worked for multinational companies. This interview was carried out by CDB’s Gabriel Corsetti on the sidelines of AVPN’s 2019 annual conference in Singapore. 

 

Could you give our readers an overview of what NPI does?

 

We were established in January 2006. We have been the first organization of this kind in China ever since Mr. Lu Zhao (吕朝), our founder, conceived the idea of setting up an incubator for NGOs. The roots of our establishment lie in a pilot program launched in August 2005 by the central government to deepen social reform, which basically provided a way to loosen up the registration of NGOs in many major cities. Thanks to this, in those cities NGOs had the right to register directly under the Civil Affairs Bureau, without needing to go through the “dual management system” in which they first had to find an official body to be their supervisor.

So Mr. Lu Zhao foresaw that there would be a lot of people wanting to set up their own NGOs, but they would not have much experience and they would be in need of capacity-building and of a place to work together, and that was how the idea of NPI came up. In the beginning the idea got the support of two charitable foundations, the Narada Foundation and the Ford Foundation. So we started our incubating program in April 2007, and then it soon spread to other cities, and in 2010 we were invited by the Ministry of Civil Affairs to replicate the NPI model all over China. Soon after that there were more than 300 city-level and provincial-level incubators for NGOs. At its peak the NPI was directly managing 13-14 incubators, and we also provided technical support for another 30 incubators. So that is how we started.

Soon afterwards we also entered the field of community development. As a premise, starting from the early 1990s the Chinese government established many community centers. They had different names, like neighbourhood centres, citizen centres or community service centres, but they were all set up and directly managed by the government. As you will know, however, the government has difficulty in providing direct services to the people, so they were in need of finding capable organizations to run the community platforms.

In the beginning of 2007 we sent two policy papers to the Pudong New District, promoting the idea of entrusting NGOs to run all those services. Luckily they adopted this idea, and at the end of the year we won the bid to run one of the largest community centers in China, the Sanlin World Expo Community Centre, which is about 8,000 square meters. We are currently still running this center in Shanghai. And that was just the beginning; currently we are managing over 60,000 square meters of community platforms in a variety of cities. The community centers we manage cover more than 1,500 different communities in total. It’s not that every community has a community center, rather 5 to 10 communities will normally share one.

So this has been a very major program for NPI since 2007. We also have capacity-building programs, not only for our incubatees but also for other NGOs. We have developed many online capacity-building programs, and in 2016 we started to not only incubate NGOs, but also incubate and accelerate social enterprises. In the same year we also launched the NPI Social Venture Fund that provides funding support to early-stage social entrepreneurs, but as equity investment, not as donations.

Starting from 2007 we had a platform to leverage funding from government agencies and corporations to support the development of NGOs, and in 2009 we also established the Shanghai United Foundation, which is the first grassroots public charity foundation to have ever survived in China. There was in fact a previous one established in Ningbo in 2007, but after a few years they just closed down. The Shanghai United Foundation however is still up and running. It mostly leverages money from individuals, for instance through Shanghai’s annual Egg Walkathon which it initiated. At the very beginning it was about raising money to buy eggs to alleviate the malnutrition of rural kids, but then starting in 2011 it evolved into an annual charity walk of 50 kms that raises funds from the participants. The funds go to NGOs that have programs helping the kids of migrant workers and rural kids, by offering them education and not just eggs!

Apart from this, we also have a media platform. With the support of the Ford Foundation we ran a magazine called Social Entrepreneur for almost 8 years, which later evolved into an online platform. So these are all examples of our programs; we are an intermediary agency that supports the development of the social sector in China, and that is what we are trying to do. From this April we have also renovated our mission statement and strategic focus, and in the future we will really focus on community development.

 

It seems that NPI has already done a lot of work on community development in the past.

 

Yes, but in our first 12-13 years the real focus has been on incubating NGOs of all kinds. After the 2016 Charity Law came out however, there was an internal government document that in a sense reintroduced the dual management system in most places. This means that at least in the major cities like Beijing and Shanghai registering a new NGO will become more difficult. The government has also stopped providing as much support for incubator programs, because many government agencies believe that there already are enough NGOs. This is why we are putting more emphasis on community development.

In 2016 we found that there was very low growth rate for new NGOs, and the Overseas NGO Law also shifted things to some extent. We realized that the market for our services was no longer large enough, so since 2016 the incubator program in Shanghai shifted towards social enterprises, and last August we decided that the NPI Social Venture Fund would also shift towards community services.

 

So overall what would you say was the effect of the Charity Law of 2016 on your work?

 

I think that you need to look not only at the Charity Law, but also at the policy documents that came out in its wake. They show that the government feels it is time to clean up the NGO sector a little bit, especially in the major cities where they have already put a lot of effort in trying to incubate more NGOs over the last decade. Now they think that perhaps it is time to have a pause and rethink the whole policy.

Furthermore, the government has been putting more and more effort into community development and autonomous community management systems. Since around 3-4 years ago every sub-district government will normally have a budget of more that 200,000 RMB for volunteer groups to run their own charitable projects within the community, but what happens in reality is that very few such volunteer groups exist, and those funds are often just sitting there with no one applying for them. One of the main things we have been doing in the communities is to try and cultivate more community-based organizations and volunteer groups. In the past 12 years we have incubated more than 1,500 community-based organizations, mostly informal organizations that do not necessarily have to register under the Civil Affairs Bureau.

 

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Ms. Ding Li posing with Mr. Lu Zhao, the founder of NPI

 

Could you tell us a bit about your own story? What motivated you to enter this field?

 

It’s quite an interesting story. Even when I was 10-11 years old I really had a passion for nature conservancy and sustainable development, because I pretty much grew up in a library and I had access to all these interesting books. This was in the beginning of the 1980s, shortly after the Cultural Revolution, and there were no NGOs, you could only read about such things in books. I graduated from college in 1993 in Shanghai and still there were no NGOs or social enterprises. The closest thing was actually the multinational companies, so I joined a multinational in 1994. The first time I heard the term “NGO” was actually when I was working for Danone, which I joined in 1996. The Danone group owns a brand called Evian, and in Danone’s annual report I saw a story about Evian working with local environmental NGOs to preserve the watershed. This was the first time I ever knew that NGOs existed.

Around 2004 I started to feel that the current model of economic growth, based on producing more and more, is unsustainable for the Earth, so my long-term interest in sustainable development was kindled. I then found the opportunity to join Conservation International’s China program, which was working precisely on sustainable development and trying to tackle climate change. CI’s work is not all done on their own, they believe in partnerships, and my job at that organization was actually corporate partnership. Basically it was talking with multinational companies like Walmart, trying not only to get funding for conservation programs but also encouraging them to make pledges. For example, Walmart has very ambitious environmental goals for 2020, they want to green their supply chain, recycle 100% of their waste and also use only renewable energy. I do not know whether they have achieved this yet, but at that time our job was to help Walmart to put these plans into place, and also try to convince their staff to embrace them. So this was my job, and I found it quite exciting.

At some point it became obvious to me that international NGOs can only do so much in China. China is such a vast country, and particularly with environmental issues it is not only about advocating with the government or convincing a few companies, you need a bottom-up approach. I realized that unless you have thousands or even millions of environmental NGOs, volunteer groups and people really willing to go the extra mile to change their own behavior, change just will not happen. Organizations like Conservation International can certainly change a lot of policies or behaviors in Madagascar or Costa Rica, but think of the size of those countries compared to China! Then in 2007 I met Mr. Lu Zhao, the founder of NPI. He said that NPI was trying to incubate capable, grassroots NGOs, which I thought was awesome. That is the reason I joined NPI.

 

Could you speak a bit about Mr. Lu Zhao’s background?

 

Mr. Lu Zhao graduated from Peking University in 1992, after which he joined the Xinhua news agency for two years as a journalist. Then he left and became a civil entrepreneur, setting up his own companies, but at some point he felt that this was not enough either. He really wanted to do something to make the world a better place, so in 2004 he became chief editor of the Charity Times. He was basically working as a volunteer however, and then starting from 2005 he also became a volunteer for the NPO Information Network of Shang Yusheng. The NPO Information Network was the first capacity-building intermediary agency that ever existed in China for the social sector. At that time Mr. Lu Zhao was the deputy director of that organization. At the end of 2005 he met Madame Ma Yili, who was head of the Civil Affairs Bureau in Pudong New District. Madame Ma invited Shan Yusheng and Lu Zhao to Shanghai and they registered the NPI. That is how NPI started.

 

You have been working in this field for a long time. How do you see the future of China’s NGO sector?

 

I think that the development of the social sector is crucial to create a more harmonious society. Recently, for a variety of reasons, there have been some setbacks. The policies are one factor, but the other factor is that, especially in these last two years, many of the sector’s opinion leaders have been talking about how NGOs should learn from business, improve their efficiency and think about scaling up. It makes me feel that the core values of the social sector are being diminished. Many people are now thinking that turning their organizations into social enterprises would be a better way to develop sustainably, but based on my experience running the NPI Social Venture Fund, I can tell you that it is actually not. Frankly speaking, I think that if you really want to have a successful social enterprise you need a very good ecosystem, a very strong business model and you need to find a big enough market where you can survive. You can’t just think: “I have some difficulties in fundraising, and maybe running a business would be easier”. It is in fact definitely not.

If you look at the Chinese business environment right now, there is already much cutthroat competition. How can you just expect, without any business experience, to earn a lot of money? When deciding whether to set up another entity or try to transform itself into a social enterprise, the only question that an NGO should consider is whether doing business is really a better way to fulfill its mission.

I think that in the long run this sector will definitely have a bright future, but first we really should start from rethinking our positioning and our core value for the whole society, and refocus on the issues we are going to tackle. Also we should build more partnerships between NGOs, be proactive in communicating with the general public and stakeholders, and have more meaningful conversations and dialogue between funders, donors and NGOs. As a sector, we really need to realize this challenge. We need to emphasize that if an organization really wants to have a bright future, it should stay true to its mission. We need more mission-driven organizations, including not only NGOs but also social enterprises. Sometimes NGOs struggle to find the funds to sustain their services and apply for all kinds of funding just in order to survive, but at that point you have to ask yourself why you are doing this.

One positive development is that some NGOs have been very successful in using social media to build a good network of supporters, volunteers and donors who really believe in the mission and also really enjoy working with the NGO, which is very important. However this is easier said than done. Even within NPI we have to work to build a more resilient and robust community. In my view this is a very important key for a successful NGO.

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