SSIR

Using Online Donations to Strengthen Philanthropy in China

There is no single path to successful digital philanthropy in China, but stakeholders should ask themselves six questions as they begin to develop their strategies.

By Ming Wong and Yin Chen

Published on January 22, 2019
min read


This article originally appeared in the Stanford Social Innovation Review (subscription may be required). Lost among the oft-reported story of how Tencent and Alibaba dominate more than 90 percent of China’s online fundraising by value is news that China’s two largest banks, Bank of China and ICBC, obtained approval to operate online donation platforms in mid-2018. These companies and many others are increasingly turning to the creation of online donation tools like Tencent's and Alibaba's in a bid to increase customer loyalty. Nonprofits stand to benefit because their funding sources will become more diverse and accessible. And donors will get the satisfaction of seeing their money going toward the specific causes they choose. This shift presents opportunities for stakeholders with the resources and capabilities to take advantage of new digital channels, particularly online fundraising, which offers significant room for growth, given that it accounts for less than 6 percent of all donations from individuals in China. Another indication of a notable opportunity for expansion can be seen in broader patterns of Chinese giving: Though the country has the fourth-largest number of individual donors in the world—91 million in 2016—they represent only 7 percent of the population. And total charitable donations in China reached 156 billion RMB ($23 billion) in 2017 (compared to $410 billion for the United States), reflecting a compound annual growth rate of 11 percent from 2011 to 2016. Read the full article at Stanford Social Innovation Review. Yin Chen is a partner in the Shanghai office of Bain & Company, where he is a member of the firm's global Industrial Goods & Service practice and co-leads its Social Impact practice in Greater China. Ming Wong is vice president of Asia Pacific, United Way Worldwide, where he leads a regional team working with organizations on fundraising, capacity development, government and stakeholder engagement, program design, and impact measurement.

This article originally appeared in the Stanford Social Innovation Review (subscription may be required).

Lost among the oft-reported story of how Tencent and Alibaba dominate more than 90 percent of China’s online fundraising by value is news that China’s two largest banks, Bank of China and ICBC, obtained approval to operate online donation platforms in mid-2018.

These companies and many others are increasingly turning to the creation of online donation tools like Tencent's and Alibaba's in a bid to increase customer loyalty. Nonprofits stand to benefit because their funding sources will become more diverse and accessible. And donors will get the satisfaction of seeing their money going toward the specific causes they choose.

This shift presents opportunities for stakeholders with the resources and capabilities to take advantage of new digital channels, particularly online fundraising, which offers significant room for growth, given that it accounts for less than 6 percent of all donations from individuals in China. Another indication of a notable opportunity for expansion can be seen in broader patterns of Chinese giving: Though the country has the fourth-largest number of individual donors in the world—91 million in 2016—they represent only 7 percent of the population. And total charitable donations in China reached 156 billion RMB ($23 billion) in 2017 (compared to $410 billion for the United States), reflecting a compound annual growth rate of 11 percent from 2011 to 2016.

Read the full article at Stanford Social Innovation Review.

Yin Chen is a partner in the Shanghai office of Bain & Company, where he is a member of the firm's global Industrial Goods & Service practice and co-leads its Social Impact practice in Greater China. Ming Wong is vice president of Asia Pacific, United Way Worldwide, where he leads a regional team working with organizations on fundraising, capacity development, government and stakeholder engagement, program design, and impact measurement.