Digital Philanthropy in China: Activating the Individual Donor Base - Digital is unlocking new avenues for individual participation in ...
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Digital Philanthropy in China:
Activating the Individual Donor Base
Digital is unlocking new avenues for individual participation in philanthropy,
promising significant development of the sector.
This report was authored by Yin Chen, Weiwen Han, Ming Wong and Jiakai Yuan. Yin Chen is a Bain & Company partner in Shanghai and leads the firm’s social impact efforts in Greater China. Also based in Shanghai, Weiwen Han leads Bain’s Greater China offices. They can be reached via email at yin.chen@bain.com and at weiwen.han@bain.com. Ming Wong is a Hong Kong-based vice president with United Way World- wide and leads UWW’s Asia-Pacific practice. Jiakai Yuan is the chief China representative for United Way Worldwide and is based in Shanghai. They can be reached via email at ming.wong@uww.unitedway.org and at jiakai.yuan@uww.unitedway.org. Bain Radar 360SM is a service mark of Bain & Company, Inc. Copyright © 2018 Bain & Company, Inc. All rights reserved.
United Way Worldwide | Bain & Company, Inc.
Digital Philanthropy in China: Activating the Individual Donor Base
Contents
Embracing the digital revolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . pg. 1
At a glance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . pg. 3
1. China’s philanthropy sector: Potential and challenges. . . . . . . . . . . . . . . . . . pg. 7
2. Digital philanthropy: Evolution and characteristics. . . . . . . . . . . . . . . . . . . pg. 15
3. Digital fund-raising: Vision and implications. . . . . . . . . . . . . . . . . . . . . . . pg. 25
i
United Way Worldwide | Bain & Company, Inc.
Digital Philanthropy in China: Activating the Individual Donor Base
iiUnited Way Worldwide | Bain & Company, Inc.
Digital Philanthropy in China: Activating the Individual Donor Base
Embracing the digital revolution
Dear Colleague:
In life, we benefit when ability and opportunity meet. Having a skill is important, but more so if there
is a productive way to use it. Similarly, if an opportunity presents itself but you don’t have the capability
to take advantage, the moment goes unrewarded.
The potential for philanthropic growth in China is a tremendous opportunity for organizations with
the ability to seize the moment. As this report describes, China, a nation of about 1.4 billion people,
possesses an untapped philanthropic market in an early stage of development. We need a tool—a way
of working—to help philanthropic organizations take advantage, increase their impact and strength-
en more communities.
China’s potential philanthropic growth represents a tremendous
opportunity for organizations with the ability to seize the moment.
Right now, in countries around the world, digital technology is reshaping society. To make a purchase,
for instance, shoppers used to go to a store and choose from what was physically on the shelf. Today,
with the Internet delivering knowledge right to our fingertips, data is plentiful. Shoppers can research
any number of options at home, learn about brands and make a selection from the comfort of their sofa.
Digital technology is having a similar effect on philanthropy. Today, people don’t have to rely on tradi-
tional charities to act on their behalf. Instead, when they identify an issue they care about, they can go
online, donate, get involved and see the progress they’re making. That’s the growth opportunity for
charities today.
The philanthropic opportunity in China aligns with our vision at United Way and the digital capabilities
that we are developing. This report shows that while donor penetration in China is low, Internet pen-
etration continues to rise—creating a pathway for philanthropies to connect with people more directly
than ever.
Several years ago, I spoke with my board of directors about the importance of United Way embracing
digital technology if we wanted to stay in business. That’s why we have shifted our strategy to build tools
to support today’s empowered individuals. We are helping people find causes they care about, develop
community partnerships and opportunities, and multiply their impact. We are helping them not only
to volunteer, but also to engage their friends and family and to share stories and ideas that increase
their reach.
1United Way Worldwide | Bain & Company, Inc.
Digital Philanthropy in China: Activating the Individual Donor Base
To be effective, philanthropic organizations in China must embrace this digital revolution. They must
build connections, show people how they can make a difference and develop a culture of giving. That’s
what United Way is working to accomplish, and it is how charities in China and around the world will
build trust and support across our collective sector. In China, these efforts must be aided by the estab-
lishment of a regulatory environment that keeps pace with today’s technological innovations.
I encourage you to thoroughly review the data and conclusions in this report. The opportunity provid-
ed by digital technology to help build stronger communities at scale is right in front of us. In China,
the opportunity is massive. Let’s seize it.
Brian A. Gallagher
President and CEO, United Way Worldwide
2United Way Worldwide | Bain & Company, Inc.
Digital Philanthropy in China: Activating the Individual Donor Base
At a glance
China’s RMB 156 billion philanthropy sector has been growing at a brisk pace, but donations
from individuals comprise only about 20% of the total.
Digital fund-raising accounts for slightly more than 2% of China’s total donation value, but it is
growing rapidly, driven by younger people attracted to supporting specific projects with com-
pelling stories.
Government regulations and self-reporting will also support continued development of the
philanthropy sector, ensuring transparency and nurturing public trust.
To capture the opportunities, stakeholders across the sector need to develop integrated digital
strategies, including identifying potential ecosystem partners.
Philanthropy in China has grown rapidly over the past three decades, in tandem with the development
of the economy as a whole. However, China’s overall culture of philanthropy is still emerging as indi-
vidual awareness and participation increase.
Total charitable donations in China reached RMB 156 billion in 2017, having grown at a compound
annual rate of 11% from 2011 to 2016. China’s philanthropic sector has developed primarily through
corporate giving, which contributes approximately 60%–70% of total donation value, while donations
from individuals make up about 20% of the total market. Although China has the fourth-largest num-
ber of individual donors in the world (91 million in 2016), this represents only 7% of the Chinese
population, suggesting significant room for growth.
Individual participation in philanthropy has fluctuated over the past several years. The sector has
been affected by natural disasters, which spur short-term donations, as well as by scandals, which de-
flate the public’s trust and willingness to donate. Total donations from individuals fell by 60% from
2011 to 2014 but have since recovered, growing at a compound annual rate of more than 60% from
2014 to 2016. This trend is poised to continue as rising disposable income boosts donor participation
and donation amounts, and as rapid development of digital infrastructure (e.g., Internet/mobile pen-
etration, digital payments) increases individuals’ access to charities.
Digital—and especially digital fund-raising—is set to transform China’s philanthropy sector, bring-
ing both unparalleled access and transparency. This shift presents meaningful opportunities for
stakeholders with the resources and capabilities to take advantage of new digital channels. At the
same time, the sector continues to face traditional challenges, such as finding and attracting top tal-
ent, which are only exacerbated in the new digital environment.
3United Way Worldwide | Bain & Company, Inc.
Digital Philanthropy in China: Activating the Individual Donor Base
Rise of digital philanthropy
Digital technology is rapidly changing how China’s philanthropy sector operates—from diversifying
and engaging the sources of funds, to better promoting and enabling fund-raising, to driving improved
fund utilization. This report focuses on the most developed of these areas: online fund-raising.
Over the past 15 years, online fund-raising has evolved through three distinct stages. During its period
of emergence, from 2004 to 2013, the market saw the rise of new charities and online channels lever-
aging commercial platforms like Taobao. From 2013 to 2016, innovations by Alibaba and Tencent (in-
cluding the 99 Charity Day campaign) marked a period of rapid development, ushering in exponential
growth in online fund-raising. And from 2016 to the present, it has seen regulated but fast growth,
with China’s Charity Law—the first comprehensive legislation governing the sector—coming into ef-
fect. Online fund-raising has soared over the past five years, both in terms of participation and total
donation value.
By making philanthropy increasingly accessible, digital has activated giving by individuals, which
represented more than 60% of online donations in the past three years, vs. about 20% of donations
overall. Online donations come primarily from younger donors, who have a growing interest in
philanthropy and ability to donate. Engaging this population is becoming a must-win battle for all
stakeholders. Health, poverty alleviation and education are the most popular themes of online projects,
driven both by platforms’ push and by donors’ pull.
Across the sector, online giants Tencent and Alibaba dominate the market today, but the competitive
landscape will continue to evolve as more platforms are approved to engage in public fund-raising.
The ability to generate and drive traffic is a key differentiator within the overall online fund-raising
ecosystem. Departing from the traditional model, where public foundations are by far the largest
players, these platforms empower NGOs and individuals to raise funds and enhance their profiles
online. Thus far, however, funding distribution for online projects reflects the Pareto principle, with
the top 20% of projects absorbing most of the donation value.
Digital fund-raising’s potential growth is significant, as online donations still account for less than
6% of donations from individuals. On the demand side, charitable organizations with public fund-
raising qualifications (abbreviated as COPFQs in this report) and nongovernmental organizations
(NGOs) also have a relatively limited online presence; only about 40% of COPFQs and 2% of NGOs
were represented on Tencent’s charity platform in 2017.
Implications for industry stakeholders
The rapid rise of digital philanthropy in China creates significant opportunity for stakeholders to make
a mark in the sector. At the same time, foundations and NGOs need to conquer some key challenges,
including gaining and maintaining the public’s trust through more efficient operations and established,
transparent reporting standards. The Chinese government is actively providing the philanthropy indus-
try with guidelines and policies to manage fraud, as well as drafting clear guidance on charitable
4United Way Worldwide | Bain & Company, Inc.
Digital Philanthropy in China: Activating the Individual Donor Base
organization reporting. However, the overall regulatory environment is still in a nascent stage and
must continue evolving to keep pace with innovation.
Digital can accelerate the development of China’s overall philanthropy culture, but this requires stake-
holders to define their objectives and develop corresponding strategies. Common digital objectives
include creating a positive and targeted impact, building a trusted brand and broadening the scope of
influence. Still, individual stakeholders have different objectives and need to develop their own differ-
entiated perspectives on how to participate in the market. Even digital philanthropy leaders like Tencent
and Alibaba are improving their operations along these lines, developing clear and unique value
propositions, and focusing their digital efforts on key areas in order to achieve their objectives.
There is no single path to success, but based on our study and the Bain Radar 360SM framework,
philanthropy stakeholders should ask themselves a set of key questions as they begin to develop their
digital strategies.
• Customer and channel engagement: How do we leverage digital infrastructure to maximize do-
nor engagement?
• Products and services: What donation options and donor services can we develop for digital
platforms?
• Operations: How do we improve our internal operations by leveraging new digital tools and ca-
pabilities?
• Data and analytics: What analytics do we use to measure and track key activities, and how can
we apply digital tools to manage them?
• Operating model and partnerships: How do we tailor our operating model to cater to digital
needs? Do we need ecosystem partners?
• Talent and culture: Do we have the right talent and culture to make our digital plan work? If not,
how can we practically close the gaps?
Not all of these challenges and opportunities can be met by individual stakeholders alone; the need for
true partnerships in various forms will increase. However, given the trajectory of the market and the poten-
tial to make a meaningful impact, philanthropic organizations must prioritize their digital strategies
if they want to stay relevant and engaged with an increasingly active population of individual donors.
51.
• China’s philanthropy sector has emerged over the
past 30 years, with significant fluctuation between
2007 and 2011 as a result of major natural di-
sasters and scandals. Thanks to increasing trans-
parency and government regulation, the sector
is now entering a phase of steady growth.
China’s philanthropy
• Despite its rapid rise, philanthropy in China has
sector: Potential and not kept pace with the overall economy. China’s
total donation value currently accounts for only
challenges
0.2% of its GDP.
• Individual donor penetration is relatively low at
only 7% of the total population, but participation
continues to grow rapidly as the younger gener-
ation slowly embraces the concept of giving back
through charity.
• The sector is ripe for continued growth as dispos-
able income increases, digital infrastructure en-
ables easier access to charities, and the govern-
ment actively participates by creating guidelines
and policies.
• However, the industry also needs to tackle a set
of challenges, including winning and maintaining
public trust, establishing efficient operations and
transparent reporting standards, and recruiting
and retaining top talent.United Way Worldwide | Bain & Company, Inc.
Digital Philanthropy in China: Activating the Individual Donor Base
Figure 1: After periods of fluctuation and adjustment, China’s philanthropy sector is steadily becoming
a powerful force for good
Total charitable donation value (RMB billions)
(Sept 2016–present)
Emergence Fluctuation Adjustment and steady growth Regulated
200 CAGR CAGR CAGR
29% 11% 7%
156
146
122
107 103 106
95
100
85 89
63
31
0
1981 06 07 08 09 10 11 12 13 14 15 16 17
Notes: Incomplete record of data before 2007; China’s Charity Law took effect in September 2016
Sources: China Philanthropic Donation Report, Ministry of Civil Affairs, 2012; Annual Report on China’s Philanthropy Development, 2018; Bain analysis
Figure 2: Charitable donations account for a very small share of China’s GDP, indicating future
growth potential
Total donation value as percentage of GDP, 2016
2.5%
2.1
2.0
1.8
1.5 1.4
1.0
0.5
0.3
0.2
0.0
China Japan India Australia US
Notes: Exchange rate calculated at 1 USD=RMB 6.7; due to limited data availability, Japan’s giving data estimated as the sum of 2016 individual giving and 2015
giving by corporations and foundations; Australia’s giving data is for 2015–16
Sources: Giving Japan, Japan Fundraising Association, 2017; Federal Reserve Economic Data (FRED) database; Open Government Data Platform India;
Philanthropy Australia; Euromonitor; World Bank; Annual Report on China’s Philanthropy Development, 2018; Philanthropy Roundtable; Bain analysis
8United Way Worldwide | Bain & Company, Inc.
Digital Philanthropy in China: Activating the Individual Donor Base
Figure 3: Corporations have been the major source of funding, but donations from individuals are
on the rise
Total donation value and sources (RMB billions)
CAGR CAGR CAGR
(11–14) (14–16) (11–16)
85 89 95 106 122 146 8% 17% 11%
100%
11% 6% 13%
12% 14% Other 31% –2% 17%
20%
80
60 57% 65%
70% 71% 65% Corporations 15% 14% 14%
69%
40
20
32% 29%
18% 21% Individuals –24% 62% 3%
11% 16%
0
2011 12 13 14 15 16
Notes: Other includes government, foundations, social organizations, etc.; 2016 data is through September 2016
Sources: Annual Report on China’s Philanthropy Development, 2018; Bain analysis
Figure 4: Chinese donor penetration is relatively low but increasing rapidly
Total donors, 2016 (millions) Total donors in China (millions)
300 100 CAGR
265 91 (14–16)
17%
200 80
146 144 66
60
100 91
39 36 34
40
0
Indonesia China Japan
India US Germany UK
20
Rank by 1 2 3 4 6 8 9
number of
donors
0
Percentage 20% 56% 45% 7% 47% 28% 52%
of population 2014 2016
Notes: Number of donors estimated based on Charities Aid Foundation (CAF) research; donors defined as those who donated money during the one-month period
prior to the interview; Pakistan ranked fifth and Thailand ranked seventh in number of donors
Sources: CAF World Giving Index, 2016–17; Giving USA 2017; World Bank; Bain analysis
9United Way Worldwide | Bain & Company, Inc.
Digital Philanthropy in China: Activating the Individual Donor Base
Figure 5: Based on a comparison with the US philanthropy market, donations from individuals
could grow significantly
Total donation value and sources, 2016 (RMB billions)
146 2,613
100%
14%
23% Other
80
5% Corporations
60
65%
40
72% Individuals
20
21%
0
China US
Notes: Other includes government, foundations, social organizations, etc.; exchange rate calculated at 1 USD=RMB 6.7
Sources: Giving USA 2017; Annual Report on China’s Philanthropy Development, 2018; Bain analysis
Figure 6: Rising income levels in China could help boost charitable donations and philanthropy
participation
Distribution of Chinese households by Distribution of US households by
disposable income (USD) disposable income (USD)
Percentage of Average donation
100% Over 100K 100% households that amount, 2015
65K–100K donated, 2015 (USD)
80 80 Over 100K 84% 3,900
60 60
10K–65K
55K–100K 63% 2,162
40 40
25K–55K 46% 1,382
20 20
2,500–10K
500–25K 30% 1,052
0 500–2,500 0
2000 2010 2017 2030E 2015
Notes: Average donation amount is among households that donated; the Philanthropy Panel Study segmented income by 25K, 50K, 100K and over 100K; for
consistency with the US national household income data, we grouped the percentage of households that donated and the average donation amount for 25K‒50K
into the 25K‒55K category, and data for 50K‒100K into the 55K‒100K category
Sources: Philanthropy Panel Study, Indiana University Lilly Family School of Philanthropy, 2015; Euromonitor; Bain analysis
10United Way Worldwide | Bain & Company, Inc.
Digital Philanthropy in China: Activating the Individual Donor Base
Figure 7: Tapping China’s huge base of Internet users represents a major opportunity for charities
Internet users in China (millions) Internet users by activity, 2017 (millions)
Percentage of total
800 772 Chinese Internet users
731
689 Online
649 531 69%
618 payments
600 564
513
458 Instant
messaging/ 720 93%
400 social
networking
200
Online
533 69%
shopping
0
2010 11 12 13 14 15 16 17 0 200 400 600 800
Internet 34% 38% 42% 46% 48% 50% 53% 56%
penetration
Note: Internet users defined as individuals over six years old who have used the Internet in the past six months
Sources: Statistical Report on Internet Development in China, CNNIC, January 2018; Bain analysis
Figure 8: Despite its spectacular growth, China’s philanthropy culture is still in a very early stage
CAF World Giving Index score, 2017
80% 1
2 3
4 5 6
65 7 8 9 10
60 60
60 57 56 56 54 53 51 51
40
138 139
20
14 13
0
Myanmar Indonesia Kenya New US Australia Canada Ireland UAE The China Yemen
Zealand Netherlands
CAF ranking
Notes: Scores calculated as a combined average of the percentage of people who reported one or more of the following in the month prior to the interview: helping
a stranger, donating money and volunteering time; China’s score based on 4,373 interviews
Sources: CAF World Giving Index, 2017; Bain analysis
11United Way Worldwide | Bain & Company, Inc.
Digital Philanthropy in China: Activating the Individual Donor Base
Figure 9: Low salary is the biggest talent-retention challenge that China’s charities face
Reasons for leaving a job with a charitable organization
50.5%
11.8%
8.0% 6.8% 6.6% 6.2% 5.8%
1.6% 1.0% 0.8%
Low salary Problematic Lack of High work Limited Family Government High Problematic Other
management social intensity space for reasons interference pressure relationship
recognition career with leadership
development
Sources: China’s NGOs Salary Survey Report, China Development Brief, 2016 (n=489); Bain analysis
12United Way Worldwide | Bain & Company, Inc.
Digital Philanthropy in China: Activating the Individual Donor Base
132.
• Digital technology is rapidly changing how
China’s philanthropy sector operates—creating
new bridges between stakeholders, and closing
the distance between donors and specific projects.
• Overall donation value and participation have
both soared over the past five years. Still, given
Digital philanthropy:
the popularity of online donations and increasing
Evolution and confidence among individual donors, there is
significant room for growth.
characteristics
• Currently, the landscape is highly concentrated;
20 online platforms are licensed to link individual
donors to projects, but 90% of total donation
value goes through Alibaba and Tencent. How-
ever, competition may intensify as other players
apply for licenses to participate.
• Overall, digital philanthropy in China today is
characterized by a few key attributes. Young
people are the major donor group online, and
engaging young donors will be an important
battle for all stakeholders. We also find that plat-
forms are encouraging NGOs and individuals
to fund-raise online, and that a relatively small
percentage of projects are capturing the bulk of
the donation value. In addition, health, poverty
alleviation and education are the most popular
themes of online projects.United Way Worldwide | Bain & Company, Inc.
Digital Philanthropy in China: Activating the Individual Donor Base
Figure 10: Digital is changing how China’s philanthropy sector operates
Sources of funds Fund-raising Fund utilization
Digital marketing/ New online platforms
promotion and channels
touchpoints
Individuals E-commerce 20 online platforms with
online fund-raising qualifications
Social media + Foundations/
Live streaming Charitable organizations with NGOs
Short-form videos public fund-raising Beneficiaries
qualifications (COPFQs)
Entertainment
Corporations Lifestyle
COPFQs’ own channels
Sports
Government Offline:
and social Private/public foundations Government
organizations NGOs/government
Emerging influence of new digital tools
Digital-related areas Online flow of funds Offline flow of funds
Notes: Number of online platforms as of August 2018; some individuals and organizations that are not registered as foundations or NGOs can still initiate projects
Sources: Expert interviews; Bain analysis
Figure 11: Online fund-raising in China has developed in three stages
February 2005 February 2012 August 2016 September 2016 August 2017 May 2018
Two charity Sina establishes Ministry of Civil Charity Law “One-yuan MCA approves
institutions open charity platform Affairs (MCA) goes into effect painting” 9 online
“Commonweal approves 13 donation drive fund-raising
Shops” on Taobao online fund-raising goes viral platforms
platforms
Emergence Rapid development Regulated and fast growth
December 2004 June 2011 September 2015 August 2016 November 2016 December 2017
YeePay sets up Guo Meimei and Tencent launches Alibaba launches Luo Er scandal “Same-day birth-
online donation Red Cross Society 99 Charity Day Ant Forest to exposed day” campaign
channel for of China scandal encourage eco- initiated on illegal
Indian Ocean exposed friendly practices platform with prob-
tsunami relief lematic operations
Breakthroughs Regulations Scandals Key milestones
Note: Only 11 of the 13 online fund-raising platforms approved in 2016 are operating today, for a total of 20
Source: Bain analysis
16United Way Worldwide | Bain & Company, Inc.
Digital Philanthropy in China: Activating the Individual Donor Base
Figure 12: Online fund-raising value and participation have soared over the past five years
Online fundraising value (RMB billions)
4 CAGR CAGR
3.5 (13–16) (16–17)
3
2.0
2
75% 79%
1.3
1 Driven by Tencent
0.4 0.4 platform’s strong
growth
0
2013 14 15 16 17
Online fund-raising
as percentage of 0.4% 0.4% 1.1% 1.4% 2.3%
total donations
Number of online 0.44 1.12 3.03 4.61 6.25 119% 36%
donations (billions)
Notes: No consolidated data before 2013; 2014–16 totals sourced from Online Fundraising in China: A Research Report on Third-party Platforms; 2017 total is the
sum of each platform’s data; Tencent data includes individual donations, “steps walked” donations and corporate match donations on 99 Charity Day; Alibaba’s
data may be underestimated because Ant Financial does not disclose corporate donation data; due to limited data availability, 2013 includes Sina platform only
Sources: Annual Report on China’s Philanthropy Development, 2017–18; Online Fundraising in China: A Research Report on Third-party Platforms, China Association
of Fundraising Professionals, 2014‒16; China Philanthropy Times; China Global Philanthropy Institute; Tencent and Qfund operational reports; Bain analysis
Figure 13: Donating online is the preferred participation method, valued for its transparency and
convenience
“What is your preferred way to participate in “What is the biggest benefit of digital
philanthropy?” philanthropy?”
Percentage of respondents, 2017 Percentage of respondents, 2017
80% 80%
62 64
60 60 57
53
50
43
40 40
20
19
20
0 0
Donating Volunteering Donating Initiating More Easily Lower entry
online goods online project transparent accessible for barrier for
by oneself for the industry individuals organizations
Note: Survey conducted on People Think Tank’s WeChat accounts and website (n=11,484)
Sources: “The Public’s View on Philanthropy in China,” People Think Tank, 2017; Bain analysis
17United Way Worldwide | Bain & Company, Inc.
Digital Philanthropy in China: Activating the Individual Donor Base
Figure 14: Online fund-raising has plenty of room to grow across donor categories
Donation value by channel and source, 2017 (RMB billions) Total donation value=RMB 156B
44 95 17
Online ~1%
Online 5%–6%
Offline 100%
Offline ~99%
Offline ~94%
Individuals Corporations Other
Notes: Other includes government, foundations, social organizations, etc.; due to limited data availability, 2017 totals estimated using 2014‒16 CAGRs for
individuals, corporations and other; online corporate donations may be underestimated because Ant Financial does not disclose corporate donation data
Sources: Annual Report on China’s Philanthropy Development, 2017–18; China Philanthropy Times; China Global Philanthropy Institute; Shanghai United
Foundation; Tencent and Qfund operational reports; expert interviews; Bain analysis
Figure 15: Digital has activated donations from individuals
Total online fund-raising and sources (RMB millions)
4,000
1,361 3,540
3,000
835
Individual
2,000
1,345
1,000
Corporate
0
2015 Increase in Increase in 2017
corporate giving individual giving
Contribution to 38% 62%
2017 gain
Notes: Corporate giving includes match donations for Tencent’s 99 Charity Day and Tencent “steps walked” donations; online corporate donations for 2017 may be
underestimated because Ant Financial does not disclose corporate donation data
Sources: Annual Report on China’s Philanthropy Development, 2017–18; Online Fundraising in China: A Research Report on Third-party Platforms,
China Association of Fundraising Professionals, 2014‒16; Tencent and Qfund operational reports; Shanghai United Foundation; China Philanthropy Times;
China Global Philanthropy Institute; Bain analysis
18United Way Worldwide | Bain & Company, Inc.
Digital Philanthropy in China: Activating the Individual Donor Base
Figure 16: Small average donation amount indicates huge potential for online fund-raising among
individuals
Number of online donations, 2017 (millions) Average donation amount, 2017 (RMB)
8,000 500
Top five platforms for 442
online donations
6,250 400
5,980 362
6,000
300
4,000
200
2,000
100
48
270 26 22
203 63 2 1 0.4 8 0.05 2
0 0
China China, Taobao Ant Tencent Qfund Sina China China, Taobao Ant Tencent Qfund Sina Donors Online
excluding Financial excluding Financial Choose crowd-
Taobao Taobao (US funding
platform) (US)
Notes: DonorsChoose selects and runs education fund-raising campaigns online; average donation amount for DonorsChoose reflects first-time donors only
Sources: Annual Report on China’s Philanthropy Development, 2018; China Philanthropy Times; Nonprofitssource.com; DonorsChoose.org; Bain analysis
Figure 17: NGOs and charities with public fund-raising qualifications have a limited presence on
online platforms
COPFQ penetration on online platforms, 2017 NGO penetration on online platforms, 2017
Total COPFQs: 697 Total NGOs: 422K
100% 100%
80 80
59%
60 88% 84% 60
98% 98% 99% ~98% ~100% ~100%
40 40
20 41% 20
12% 16% 2% 2% 2% 0.1% 0.03%
0 0
Tencent Taobao Ant United Baidu Lianquan Tencent Lianquan United
Financial for for Charity
Charity
Number of 289 84 111 17 17 5 Number 8.22 0.40 0.12
COPFQs of NGOs
on platform on platform
(thousands)
Already launched Not launched
Notes: COPFQs refers to charitable organizations with public fund-raising qualifications; NGOs refers to social service organizations (previously known as private
nonenterprise units); some individuals/organizations that are not registered as NGOs or foundations can still initiate projects
Sources: Annual Report on China’s Philanthropy Development, 2018; Tencent, Taobao, Ant Financial, United for Charity, Baidu and Lianquan operational reports;
Xinhuanet; Bain analysis
19United Way Worldwide | Bain & Company, Inc.
Digital Philanthropy in China: Activating the Individual Donor Base
Figure 18: China’s younger generation shows a strong interest in philanthropy
Percentage of online donors by generation
60% 58 Among those under 30 years old:
48
63%
40
35
Pay attention to philanthropy
20 19 19
9 8
52%
5
0 Participate in charitable activities
Post-'90s Post-'80s Post-'70s Other
Average 1.0 2.4 4.3 1.8
donation size
(indexed)
2013 2016
Note: Donation size indexed to the post-’90s period
Sources: 2017 Youth Attitudes Toward Philanthropy Report, Ifeng; China Online Donation Report, 2013; Ant Financial; Bain analysis
Figure 19: Tencent and Alibaba currently dominate among online fund-raising platforms
Online donation value by platform (RMB millions)
4,000 China
Foundation
3,540 186 Center
JD
Other Baidu
Gongyibao Xinhua
3,000 Alibaba Lianquan
Sina
1,978
2,000
Qfund
1,345
Tencent
1,000
United for
367 436 Charity
0
2013 14 15 16 17
Notes: 2014‒16 totals sourced from Online Fundraising in China: A Research Report on Third-party Platforms; 2017 total is the sum of each platform’s data; Alibaba data
includes both Ant Financial and Taobao; Alibaba’s data may be underestimated because Ant Financial does not disclose “steps walked” donations; Tencent data includes
individual donations, “steps walked” donations and corporate match donations on 99 Charity Day; in 2013, Other includes Sina only, due to limited data availability
Sources: Annual Report on China’s Philanthropy Development, 2017–18; Online Fundraising in China: A Research Report on Third-party Platforms, China Association of
Fundraising Professionals, 2014‒16; Tencent and Qfund operational reports; China Philanthropy Times; China Global Philanthropy Institute; Bain analysis
20United Way Worldwide | Bain & Company, Inc.
Digital Philanthropy in China: Activating the Individual Donor Base
Figure 20: Tencent and Alibaba outperform other platforms by better leveraging their business traffic
Online platform performance, 2017
1,155 Baidu 3,384
100% Sina (Weibo)
Baidu
Alibaba (Ant Financial)
Sina (Weibo)
80 Alibaba (Taobao)
Alibaba (Ant Financial)
60 Alibaba (Taobao)
40 Tencent (WeChat)
Tencent (WeChat)
20
0
Daily active users (millions) Platform donation value (RMB millions)
Note: Daily active users refers to users of mobile apps
Sources: Jiguang; Tencent, Taobao, Ant Financial, Baidu and Sina operational reports; China Philanthropy Times; Bain analysis
Figure 21: Other Internet players can harness their traffic to create innovative philanthropic models
Daily active users, Q2 2018 (millions)
125
107
103
100 94
86
75
54
50
41 40 39 37
30
26
25 19 17 16 16 15 13
0
Toutiao Tik Kuaishou iQiyi Pinduo- ixigua Youku Huoshan JD Meituan Vip- Kuwo Bilibili NetEase Momo Didi Qutoutiao
Tok duo shop Music
Companies with online platform qualifications
Sources: Jiguang; Bain analysis
21United Way Worldwide | Bain & Company, Inc.
Digital Philanthropy in China: Activating the Individual Donor Base
Figure 22: As online platforms empower NGOs and individuals, public foundations are no longer
the sole major player
Number of fund-raising projects by initiator type, Tencent platform
10,000
8,000
6,000
Launch of 99
4,000 Charity Day
2,000
0
Before 2012 12 13 14 15 16 17
COPFQs NGOs Individuals
Note: COPFQs refers to charitable organizations with public fund-raising qualifications
Sources: Tencent reports; Bain analysis
Figure 23: Relatively few strong projects claim an outsize share of online donations
Distribution of funding across One Foundation projects on the Tencent platform,
July 2018 (RMB millions)
15 In 2016, the top 20% of
projects absorbed more than
Tencent 80% of total donation value
for Tencent’s 99 Charity Day.
10 The platform’s most popular
project (One Foundation’s
Ant monthly donation campaign)
Financial raised RMB 135 million and
accounted for about 16% of
total donations as of
August 2017.
5
More than 40% of projects
Taobao had few or no donations as
of August 2017.
0
178 One Foundation projects
Sources: China Development Brief; Tencent operational reports; expert interviews; Bain analysis
22United Way Worldwide | Bain & Company, Inc.
Digital Philanthropy in China: Activating the Individual Donor Base
Figure 24: Four categories of online fund-raising projects have emerged
“The Long Tail” “The Survivor” “The Star” “The Influencer”
Performance and key No clear Initiated/strongly One of the most Highly empathy-
characteristics differentiating points promoted by successful projects provoking topic; wide
foundations on online platforms; public awareness
strong reputation thanks to strong
and media exposure platform promotion
Historical track record Relatively new Good track record Award-winning or Award-winning or
offline widely reported widely reported
Branding and Limited Dedicated team Dedicated team and Strong IT and online
marketing capabilities PR professionals support from
platforms
Resources Very limited Strong source of Strong source of Strong source of
(online/offline) funds funds; wide funds; deep
collaboration with collaboration with
media and online media and online
players players
Platform Regular support Regular support Positioned at key Full ownership;
engagement/support traffic point for online co-branding
campaign campaign
Level of capability Low High
Source: Bain & Company
Figure 25: Health, poverty alleviation and education are the most popular themes of online projects
Online platforms focus on projects that Donors are most interested in health, poverty/
inspire public empathy or support disaster relief and education
government initiatives
Topics on Tencent platform, 2017 Percentage of donors by topic, 2017
100% 80% Most popular
Other themes online
63
80 Environmental/
60
Poverty/disaster relief animal protection 54
60 46
Education
40
32
40
25
Health 20
20
9
0 0
Health Poverty/ Edu- Environ- Animal Other
disaster cation mental protection
relief protection
Note: Health category does not include fund-raising requests initiated by friends and relatives
Sources: “The Public’s View on Philanthropy in China”, People Think Tank, 2017; Tencent reports; expert interviews; Bain analysis
233.
• As digital reshapes a wide range of industries,
China’s philanthropy sector is positioned to lead
the world in innovation given its unique combi-
nation of digitally savvy users and large ecosys-
tem players.
• China’s philanthropy sector can harness digital to
Digital fund-raising:
accelerate the development of its overall culture.
Vision and implications To do so, stakeholders will need to clearly define
their objectives and develop corresponding
strategies.
• Digital philanthropy in China is still in its infancy,
and there will be no single path to success in the
market. As stakeholders assess the opportunity, it
is important for them to ask several key questions,
with a focus on how they will engage customers,
manage operations, leverage data and analytics,
and grow their internal talent pool.
• Even for the most mature organizations, these
are not easy tasks, and they can be even more
challenging for nonprofits. Finding partners to
supplement capability gaps will be an important
part of any winning strategy.United Way Worldwide | Bain & Company, Inc.
Digital Philanthropy in China: Activating the Individual Donor Base
Figure 26: Industries further along the digitalization curve can shed light on China’s digital .
philanthropy journey
Beginning to accelerate Changing fast Almost there
• Digital impact primarily in • Digital-enabled customer experience increasingly • Advanced technologies and
operations and cost reduction important data analytics constantly
deployed to find
• Limited digital disruption in • Increasing personalization for customers using competitive Travel
the industry advanced data analytics advantage
Telecom
Entertainment
and media
Professional
services
Energy
Consumer
products
Industrial
goods
Financial
Retail services
Sciences Tech Healthcare Public
and sector
pharmaceuticals
Note: Industry placement based on prevalence of data management platforms, use of predictive modeling, and adoption of multivariate and A/B testing
in marketing campaigns
Source: Bain Worldwide Marketing Leaders and Laggards Survey (n=487)
Figure 27: China’s philanthropy sector can leverage digital to increase its impact and cultivate a
donation culture
Stage 3:
Stage 2: Integrating philanthropy
Increasing frequency into people’s everyday lives
Stage 1: and depth of engagement
Engaging mass participation
Current stage
• Provides touchpoints to increase awareness and drive individual participation
Sources of funds • Incentivizes corporations to utilize and enhance digital marketing capability in
philanthropy activities
• Creates a new fund-raising channel with better transparency and diverse
How digital donation topics
Fund-raising
enables ... • Activates COPFQs with more sources of funds and enhanced marketing and
operations capabilities
• Enables project initiators to better design, operate and market their projects
Fund utilization
• Provides additional sources of funds with higher transparency requirements
Infrastructure (policy/technology advancement)
Note: COPFQs refers to charitable organizations with public fund-raising qualifications
Source: Bain & Company
26United Way Worldwide | Bain & Company, Inc.
Digital Philanthropy in China: Activating the Individual Donor Base
Figure 28: Philanthropy stakeholders need to define clear digital objectives and develop .
corresponding strategies
Digital enablers
Sources of funds Fund-raising Fund utilization
Corporations COPFQs Online platforms Foundations/NGOs
Digital • Create a positive and targeted impact on society
philanthropy • Build a trusted brand and broaden scope of influence
objectives
Seek more touchpoints Generate sustainable Create traffic/pull; Increase public
with consumers and and balanced sources generate participation awareness; generate
gain public attention of funds and diverse sources balanced sources
of funds of funds
Strategies
required
for success Develop a clear and unique value proposition Focus on key areas to improve with digital levers
Note: COPFQs refers to charitable organizations with public fund-raising qualifications
Source: Bain & Company
Figure 29: Asking a set of key questions can help stakeholders focus their efforts and develop .
digital strategies
Bain Radar 360 helps an organization define its Philanthropy stakeholders can focus on
digital transformation journey relevant elements to guide their efforts
Wave 3
Customer and channel engagement
tion Customer
v olu and channel
How do we leverage digital infrastructure to maximize donor
fe engagement
so engagement?
ge Wave 2
Sta
Ke
Products and services
ya
Products
and services
ctiv
What donation options and donor services can we develop for
Wave 1 digital platforms?
ities
Economic
model
Operations
How do we improve our internal operations by leveraging new
Operations
digital tools and capabilities?
Digital
departure Data and
analytics Data and analytics
What analytics can help us measure and track key activities,
Systems and and how can we apply digital tools to manage them?
technology
Ena
Operating model Operating model and partnerships
Pla
ble
and partnerships
of nning Orc How do we tailor our operating model to cater to digital needs?
rs
the h
pro and c estra Do we need ecosystem partners?
ces on tio
s to tinu n Talent
en ous and culture
Talent and culture
sur ov
e r ers
esu igh Do we have the right talent/culture to make our digital plan
lts t
work? If not, how can we practically close the gaps?
Source: Bain & Company
27United Way Worldwide | Bain & Company, Inc.
Digital Philanthropy in China: Activating the Individual Donor Base
Figure 30: To pursue their digital philanthropy objectives, stakeholders should identify critical areas
for development
Objectives Key questions Capabilities to develop
Customer and How do we leverage digital Invest in a trusted brand with strong traffic base
channel infrastructure to maximize donor Create engaging digital marketing/storytelling campaigns
engagement engagement? Embed best-in-class customer relationship management processes
What donation options and donor Integrate philanthropy with core business strategies
Products and
services can we develop for digital Source and manage high-quality projects within focus area
services platforms? Develop innovative models (e.g., gamification) and sustainable project design
How do we improve our internal
operations by leveraging new digital Embed operational efficiency best practices, enabled by digital
Operations Standardize reporting and increase information disclosure
tools and capabilities?
What analytics can help us measure
Data and and track key activities, and how can Leverage digital tools to conduct data analysis
analytics we apply digital tools to manage them?
Operating How do we tailor our operating model
Establish a digital-ready operating model
model and to cater to digital needs? Do we need
ecosystem partners? Develop ability to partner with the right ecosystem stakeholders
partnerships
Do we have the right talent and culture
Talent and to make our digital plan work? If not, Acquire and cultivate digital talent with a clear career story
culture how can we close the gaps?
Source: Bain & Company
28United Way Worldwide | Bain & Company, Inc.
Digital Philanthropy in China: Activating the Individual Donor Base
29United Way Worldwide | Bain & Company, Inc.
Digital Philanthropy in China: Activating the Individual Donor Base
30Shared Ambition, True Results Bain & Company is the management consulting firm that the world’s business leaders come to when they want results. Bain advises clients on strategy, operations, technology, organization, private equity and mergers and acquisitions. We develop practical, customized insights that clients act on and transfer skills that make change stick. Founded in 1973, Bain has 57 offices in 36 countries, and our deep expertise and client roster cross every industry and economic sector. Our clients have outperformed the stock market 4 to 1. What sets us apart We believe a consulting firm should be more than an adviser. So we put ourselves in our clients’ shoes, selling outcomes, not projects. We align our incentives with our clients’ by linking our fees to their results and collaborate to unlock the full potential of their business. Our Results Delivery® process builds our clients’ capabilities, and our True North values mean we do the right thing for our clients, people and communities—always.
For more information, visit www.bain.com Amsterdam • Atlanta • Bangkok • Beijing • Bengaluru • Berlin • Boston • Brussels • Buenos Aires • Chicago • Copenhagen • Dallas • Doha Dubai • Düsseldorf • Frankfurt • Helsinki • Hong Kong • Houston • Istanbul • Jakarta • Johannesburg • Kuala Lumpur • Kyiv • Lagos London • Los Angeles • Madrid • Melbourne • Mexico City • Milan • Moscow • Mumbai • Munich • New Delhi • New York • Oslo • Palo Alto Paris • Perth • Rio de Janeiro • Riyadh • Rome • San Francisco • Santiago • São Paulo • Seattle • Seoul • Shanghai • Singapore • Stockholm Sydney • Tokyo • Toronto • Warsaw • Washington, DC • Zurich
You can also read
