China Development Brief, No.54 (Summer 2012)
In this article, Fu Tao profiles the successes and challenges of an up-and-coming social enterprise in Chengdu that creates travel experiences with a public benefit bent.
2008 triggered an influx of newcomers to the public benefit sector – the “Public Benefit Inn” (公益客栈), founded in Sichuan by Ni Kaizhi being one such example. While working for a Shenzhen IT company Ni went to Wenchuan nine days after the earthquake as a volunteer aid worker via a referral from the Sichuan 512 Voluntary Relief Services Center (四川512民间救助服务中心). Later, Lv Zhao, founder of Non-Profit Incubaor (NPI) invited Ni to join the new NPI office in Chengdu. Discussing the time he entered the public benefit sector, Ni recalls the passion with which he visited rural disaster areas, carrying out research, and monitoring and evaluation of the work of organizations which implemented the Narada Foundation’s (南都基金会) ten million RMB disaster relief funding.
The Path to Social Entrepreneurship
After a year with NPI, unhappy with the existing state of affairs, Ni began feeling restless. In his words the work with the NPI was insufficiently challenging, “the work was repetitive and always the same and I lost my enthusiasm.” In August 2009, he heard about a social entrepreneur training program jointly organized by the British Council, the cultural and education branch of the British Embassy (英国大使馆文化教育处) and the Narada Foundation, which was being held in Chengdu. At this training program, Ni came empty-handed, unlike all of the other participants who had their own social entrepreneurship projects, but the training inspired him.
After finishing the training program in September, Ni noted that agricultural produce was not selling in the disaster area, prompting him and some friends to set up the Urban-Rural Community NPO Development Center (城乡社区NPO发展中心) (hereafter, Urban-Rural Community) with the aim of getting the local urban and rural communities involved in fair trade. Upon handing in his resignation, Ni talked to Lv Zhao about his own idea for a social enterprise. Receiving Lv’s approval, he applied to enter NPI’s Chengdu incubator program. Despite the support of NPI’s incubator program, he was unable to secure funding that year for his project. “At that time, our mission and vision were always changing, and our projects lacked a core structure. Without funding and a brand, it was hard to gain the trust of donors,” says Ni, reflecting on his difficult start.
Gradually, they reached a turning point. After getting their ideas and direction together, they launched an interactive urban and rural travel service, to promote interactive tourism for the public benefit. The Urban-Rural Community invited the “Public Benefit Inn” to join their specialized tourist training in Chengdu’s surrounding rural communities. Through their organization, urban volunteers travel to rural areas and have the opportunity to participate in environmental protection, poverty alleviation and child education projects, as well as family activities.
On October 1, 2010, a 14-person tour group traveled to Hanwang and Zundao townships in Mianzhu City where they paid a visit to local communities to help harvest rice. The participants, along with Ni and NGO insiders, were all curious and supportive as they completed “the trip witnessing the post-disaster reconstruction”. Even though the event resulted in a loss of 3000 RMB, the activity offered a rare opportunity for Ni to gain observation and suggestions from the participating NGO workers. Afterwards, Urban-Rural Community also created an online community forum – ‘The Rice Paddy Community Network’ (稻谷社区网), as a platform for tour participants, friends and mentors to exchange stories and ideas.
Ni went on to build on this success, and in the subsequent period between October and November, organized four more visiting tour groups. In November 2010, Urban-Rural Community was selected for the Entrepreneur Innovation Prize, established by the Youchange Foundation (友成企业家基金会), which came with an award of 80,000 RMB. In 2011, it won a bid to receive 190,000 RMB in disaster reconstruction funding from the China Foundation for Poverty Alleviation (中国扶贫基金会). The funding was used to organize community public benefit tour guides trainings, develop 10 new public benefit inns, organize voluntourism for 1000 people, and improve the design of tour packages and marketing activities. The Rice Paddy Community Network was upgraded to the China Public Benefit Tourism Network (中国公益旅游网) and formally launched on December 1 of the same year.
The Role of Communities
Selected sites for the village “public benefit inns” were communities with around 10-15 households. The requirements for these communities were that they be 30 minutes journey from tourist sites, have public service needs, and be willing to accept this kind of voluntourism.
Ni explains that the public benefit inn project emphasizes guidance from the community. Visitors that go into the community are met and shown around by the community’s public benefit guide. Within the community there are retired teachers and married women with children, all of whom, with the correct training, can become guides. Furthermore, their employment in these positions benefits peasant households and boosts local employment. The design of the theme-oriented tour packages is based on the needs of the community and the feedback of these guides. During the tour, the guides must observe and collect meaningful community stories and traditions to record. The Urban-Rural Community receives ‘orders’ through community discussions and services are fairly distributed in order for everyone to benefit.
The Hardships of Social Entrepreneurship
When the Public Benefit Inn was initially launched, Ni was unable to generate enough attention, so he turned to social media to promote his project and attract new customers through mainstream portal sites and various tourism forums. Now the situation has improved, he was able to shift his focus to promoting the China Public Benefit Tourism Network and meeting the needs of regular customers through Sina Weibo, Renren, and QQ groups, while at the same time designing special tour packages targeting the needs of companies.
At present, the Urban-Rural Community is carrying out market development using public benefit as the starting point. In the initial launch stage, a social enterprise is always difficult to sustain solely with income generated from the market. However, given limitations that some donors have in their understanding of ‘public benefit’, there were times when Ni was unable to attract funding.
After the May 12, 2008 Wenchuan earthquake, the reconstruction in the earthquake zone had a positive impact on the quality of houses in the villages. Yet even though poor people were provided with better quality housing, their lives for the most part were still impoverished, with no substantive changes.
Sichuan University offers an EMBA class. After finishing the class, the entrepreneurs came up with an idea to spend 30,000 RMB on a graduation trip to provide help to disaster-stricken areas. When Ni received the commission to plan and implement the tour package for entrepreneurs, he was in Shenzhen. He immediately rushed back to Chengdu to design a 3-day 2-night tourism program. He took his entrepreneur clients around Mianzhu, Maoxian, and Wenchuan on an investigative tour. Yet in the end, he was unable to satisfy his clients who asked that “the houses be in bad condition, and the people be poor”. After seeing the farmers’ new homes constructed after the earthquake, even though the homes were completely empty inside, the entrepreneurs were skeptical that local farmers were poor enough to deserve their support. Recalling this experience, Ni did not know whether to laugh or cry.
Social entrepreneurship needs more than just innovative ideas, the startup details must be well designed and executed. The initiative must be filed (bei’an) with the local Public Security Bureau, the distribution of profits with the community, and hosting standards need to be negotiated and regulations drawn up. The Urban-Rural Community provides a link between urban and rural areas, but also can be a collection point for complaints of all kinds reflecting the many complications involved.
After tour group enters the community they are given meals and have free time during which they can play mahjong or rest. But Ni has received complaints from guests that the food was unsatisfactory and the portion sizes were too small. Many were also dissatisfied with the travel services.
Some of the Urban-Rural Community’s own members have not acted conscientiously. Some regard themselves as tourists and relax, while others drink heavily and forget their responsibilities. These matters both confuse and concern Ni, and test his patience and capacity as a team manager.
Nevertheless, having previously worked as a regional sales manager at a Shenzhen IT company, Ni is relatively proficient at resource integration and marketing, and is always thinking of new ideas.
Resource Integration and Marketing
To compete with experienced travel companies, the Urban-Rural Community must emphasize their own brand of tourism. This is where the concept of “voluntourism” comes in. The Urban-Rural Community assigns each group a theme, such as environmental protection, elder care, education for parents and their children, youth experiences, enterprise development, stress relief and so on. To supplement its limited resources, it formed partnerships with other local organizations in Chengdu. The Urban-Rural Community’s current environmental partners are the Green Society Environmental Action Network (GSEAN, 济溪环境交流网络), and their elder care partners are the Western Senior Citizens Federation (西部老年联合会). For tours focused on youth experiences, it partners with Youth Spaces (青少年空间) which is in every district in Chengdu.
Ni is currently planning a large-scale promotion by holding a Voluntourism Festival and seminar. He also plans to print 2000 postcards featuring the Public Benefit Inn and its rural village activities.
Of course, there remain challenges, and the Urban-Rural Community has continued to experience many setbacks when applying for funding. Their application to foundations to hold a competition for social entrepreneurs to promote public benefit tourism was not approved. They failed to qualify for the finals in the Cinnovate Initiative (芯世界技术应用奖) competition hosted by Intel China, China Poverty Alleviation Foundation and the Narada Foundation, and did not get past the early assessment stage of the 2012 Narada Foundation’s Ginkgo Program (南都公益基金会银杏计划).
The Registration Puzzle
While Ni has a number of ideas for how to promote the Urban-Rural Community, he is always thinking about how to register his organization. In order to define the Urban and Rural Community’s position in the social enterprise world, Ni recently registered it as a business (益游中心)in March of this year, but he still wants to register as a nonprofit organization. The business registration is convenient for commercial operations, but institutions relying on developing and operating public benefit tourism need to develop a public benefit tourism brand. Registered businesses are restricted in applying for government procurement funds and foundation funds, and there are tax requirements they cannot bypass. The current method used is to transfer any public benefit funds to NPI’s Shanghai headquarters and have NPI act as a trustee for managing these funds. [Editor’s Note: As a registered nonprofit, NPI does not have the tax requirements of a commercial enterprise.] Ni noted that most of their clients regard the Urban- Rural Community as a public benefit organization, and participate in its activities because of its public benefit nature. As a result, Ni stresses the importance of financial transparency, and insists on publishing the Public Benefit Inn’s finances online.
After a great deal of effort, the Urban- Rural Community finally received approval in May of this year from the Chengdu High Technology District’s Social Enterprise Bureau (成都高新区社会事业局), and successfully registered as a civil, non-enterprise unit. [Editor’s Note: A civil, non-enterprise unit is one of three categories of nonprofits that are registered under the Civil Affairs office. The other two are social organizations (shehui tuanti) and foundations (jijinhui).] In 2012, Ni plans to run 2-3 projects for business, in addition to two foreign university groups, three trips for recent university graduates, and around 20 trips for groups of individuals, in order to earn an income of 170,000 RMB to fund its operations for the year. In March of this year, through the referral of YouChange Foundation (友成基金会), Urban-Rural Community and Hong Kong Polytechnic University signed an agreement to organize a rural services program tour. In early September, the university will send 104 students to two public benefit inns to participate in poverty reduction and community development activities. They plan to put all their effort into this program to accumulate experience for hosting future university groups from China and overseas.
Since setting out on the public benefit path in 2008, Ni and his partner of six years have been traveling back and forth between Chengdu and Shenzhen. After its first year of incubation, NPI stopped giving it small monthly grants, and at that time they thought of going back to Shenzhen. Now things have changed for the better but their future remains uncertain.
Ni’s public benefit tourism commitments leave him dividing his time between the countryside and Chengdu. But Ni prefers the clean air and freedom of the countryside. In his words, “in the countryside I feel needed but in the city I can feel very insignificant.”
There is a saying that Chengdu is a city where, once you arrive, you will never want to leave. Now Ni too feels a sense of belonging in Chengdu. He likes the city, and not just because of its unique geography, climate and cultural characteristics, but also because there is an atmosphere of solidarity among the NGOs there. He has been able to share a glass of wine while having impassioned conversations and debates with other NGO founders and entrepreneurs. When the project started, and funding was trickling in slowly, they used friendships as a guarantee and personal savings to meet their urgent needs, including advances, wages and salaries.
Although the Urban- Rural Community has now acquired some influence, Ni recognizes that there are still many difficulties. The existing team has still yet to fully mesh, and often the execution is lacking. Ni is the kind of person who is always leading the way with new ideas, but as the organization becomes a team effort he no longer needs to take on all matters single-handedly and needs to be patient in dealing with management and team building issues.
When this interview was conducted in March the Urban-Rural Community had just moved to a new property within the Second Ring Road of Chengdu. With office equipment not yet fully in place, several rooms appeared empty. On the entrance wall, Ni had made a photo display, documenting their performance since 2008 – from the bottom up, these photos are laid out in the shape of a tree. The trees height increases with the increase of participants and activities and splits into two branches at the top to represent the growth of this young institution.
Contact: Ni Kai Zhi