YouChange Concepts

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How We Understand Social Enterprise

2014-03-22 15:40:15

YouChange or China Social Entrepreneur Foundation in its full name is one of the first institutions to introduce, advocate and practice the concept of social enterprise in China’s mainland. In 2007, YouChange organized a trip for Chinese NGOs to visit social enterprises overseas and held a seminar on social enterprise; in 2009, it established Social Innovation Support Center; it was one of the first to support social entrepreneur skills training by the British Embassy and set up “Outstanding Social Entrepreneur Prize”; it supported Peking University in introducing the first credit course on social innovation in China; and it offered financial support to the publication of Social Innovation and Social Enterprises Translation Series and Social Innovation Blue Paper.

As we all know, public services monopolized by the government are inefficient while those provided by commercial businesses have limitations due to their profit-seeking nature. Social enterprises backed by social investment from social organizations can play a supplementing role while the government and market will play its due role.

Social investment means the venture capital model in philanthropy. Social investment is investment rather than donation. This is the biggest difference between social investment and traditional donation. Therefore, social investment institutions pay close attention not only to funds, but also how it is used; and not only whether social objectives are realized, but also how efficiently.

Social enterprise is a new way of business organization in the west. Despite without a rigorous and uniform definition, it generally refers to a business with the provision of public-interest social services as its main objective. Social enterprise, different from social organization, operates in a business model, but with the objective to resolve social problems. Although it seeks profits, social enterprise is non-dividend which means its profits will be reinvested in its business.

We believe it is a trend of our time to introduce efficient business management and marketing practices which are well-tested in the commercial world into philanthropy. It will help improve philanthropy in China and play a significant role in helping charity organizations create more modern businesses capable of social innovation, leading to further development of social innovation in China.