The majority of NPOs in the Western rural area in China are the branch offices of some international development and aid organizations, mixed with only a few local grass-roots. The reason behind is that, very often the latter find themselves stranded in a predicament: Under the circumstance of governmental regulation, grass roots nonprofits cannot fundraise publicly. Outside of foundation support and government service procumbent or fiscal appropriation, those nonprofits hardly have any source of funding.  Nowadays more and more nonprofits begin to explore operation models that generate earned income. Mr. Huang Hua and his charity initiative combining with a business, Big Sister Liu’s Food Production, is a typical case.

Mr. Huang Hua was once quite a successful merchant who owned an advertisement company. Year 2004 was the turning point of Huang Hua’s whole life when he got to know a few friends who are active in doing public services, and began to engage himself in activities serving the lonely elders, orphans and the disabled. Gradually, he regarded the delivery of warm-heartedness as his innate responsibility.

At the beginning of 2008, Huang initiated the 1314 Charities Association (1314CA, 1314 is the homophone of the Chinese term meaning “life-long”) in Guizhou and recruited several hundreds of volunteers. Like most of Chinese grassroots, 1314CA did not registered officially because of the policy barriers. Instead, 1314CA built an online blog where its volunteers communicate with each other and organize activities. They set the lonely elderly people as their primary service subject in order to address the trend of population aging. In the short live, the 1314CA has actively devoted itself to emergent earthquake disaster relief and distributed around 1 million RMB aiding materials to social vulnerable groups.

However, under the seemingly success hid the difficulty of the long-term operation of 1314CA and Huang’s own subsistence: shortage of funding. Once Huang designed some broaches and accessories and held a charity bazaar. He also tried cooperating with companies he knew, but the funding was limited and unstable. Huang also observed the same problem earlier when he was still volunteering at a senior charity team before the founding of 1314CA. “The true career of social service should be sustainable over a long time, so that more people can benefit from it.” said Huang, “If the core organizers only contribute enthusiasm according to the good or bad fortune in his or her life rather than consider social service a perpetuating personal career, the organization will soon get crumbled, especially when it expands”

At that point, Huang learned the notion of “Social Enterprise” in Chen Jiawei’s book “Social Enterprise and Social Entrepreneur”. Setting up profit-making businesses to tackle a social or environmental need, it is exactly Huang is thinking. Huang Hua thought of his mother Liu. Decades ago, Liu used to peddle vegetables, cigars and snack on the streets until she obtained a stand and opened a restaurant at a farmer’s market in Guiyang in 1976. Because of the good material Liu used and the unique taste of the spicy condiment she invented, more and more customers visited her restaurant. Around 1990s Liu’s small restaurant was even on top of the list of famous restaurants in Guiyang. Some time later Liu quitted due to her bad health.

In memory of his mother, Huang Hua established the Big Sister Liu’s Food Company in June 2008, focusing on the production of Liu’s homemade spicy condiment. He then made 1314CA one department of the company, saving it out of the past embarrassing position. The food company provides an office for 1314 CA, and covers its overheads. For its program costs, 1314 is supposed to raise through charity bazaar, or business collaboration with the company. Of course the accounts of both sides were clearly separated.

As for the formation of the core team, there is only person (Huang) in charge for the Big Sister Liu at present. The situation of the 1314CA is better. Over 200 internet members, a dozen of active volunteers as well as 6 managers for marketing, finance and activities have webbed a pretty mature framework.

After nailing down the relationship between the Big Sister Liu and the 1314CA, Huang further brought forward his philanthropic vision of Big Sister Liu in developing rural villages:
1. The company can provide free, high-quality seeds to the poor farmers, encouraging them to grow pepper and develop related agricultural industry.
2. The company can train farmers, and make contracts with them about purchasing their final products. It follows that the farmers can expect some reasonable profits which will not be influenced by the fluctuating market prices.
3. The farmers should not use harmful chemical fertilizers and pesticides. Therefore, the Big Sister Liu can bring to the market the unique green food.
4. In the process of production, the company can hire some deaf-and-dumbs or the disabled, thus solving the employment problem of the special groups.
5. Extra fund can be used to assist other organizations working for public welfare.

As long as customers buy the food from Big Sister Liu, they are backing up social services indirectly. In Europe and North America, this kind of “Ethical Consumption” has been in fashion. Considering the policy environment in China that a NPO is not allowed to solicit for funds, intentional purchase of ethical products is a more ideal approach to promote a harmonious society than simple donation. Huang envisaged that Big Sister Liu might benefit in the campaign of market share expansion thanks to “the advantage of public welfare”. Moreover, bridging the connection between customers and service subjects might lead more people to the course of volunteering.

It seems that the “enterprise + NPO” mode is a miraculous panacea to cure the scarcity of funding of nonprofits in China. Nevertheless, even Huang himself would not completely agree.

First of all, Huang has more and more realized that the burden on the food company was too heavy. It is not reasonable for a newly-built company to accomplish all of Huang’s philanthropic blueprints, including hiring the disabled, green production or even aiding other NPOs. A stepwise tactic is advisable.  Take initial financing of the factory for instance. OEM (Original Equipment Manufacturer) or relegating production to some big factories would be the wisest way. However, that would not allow for providing jobs to the disabled, as a part of Huang’s social vision.

On the level of the whole society, fierce debate and doubts are targeting towards Huang. Huang once released an ad about Big Sister Liu on the blog of 1314CA. It turned out that some cyber friends queried about the appropriateness for Big Sister Liu to use philanthropy appeals for marketing. To most of the public, philanthropy still equals purely free, noble dedication and is poles apart from business. As a result, to popularize the notion of social enterprise and convince customers of the philanthropic purpose of Big Sister Liu, or to completely abandon the immature conception of ethical consumption and launch normal marketing through the high quality of products, is the most critical issue Huang is facing with and will headache Huang here from.

(Translated and compiled by Yongmei Sheng. Edited by Xing. Based on http://www.ngocn.org/?action-viewnews-itemid-42136)