Want to know what goes on in the world of social enterprise in China? A report released today by the Foundation for Youth Social Entrepreneurship (FYSE), an organization supporting young social entrepreneurs in Asia, shares insights on the current state of social entrepreneurship in China.
Data was gathered in a survey of 52 social enterprises and 12 organizations supporting social entrepreneurs in China. The following are key findings of the survey:
NGOs want to become commercial enterprises because they face revenue shortages and institutional challenges. However, many fail and revert back to donations and grants. On top of this, many experts question the ability of NGOs to turn into viable social enterprises. They believe that the most promising social enterprises are among businesses that may not even identify themselves as social enterprises.
Because social enterprise is a relatively new concept, social enterprises adhere to existing legislative framework. This poses both a challenge and freedom to choose a legal status that suits their operations. Legal forms to choose from include commercial company, co-operative, or Social Welfare Enterprise. The survey found that 66% of social enterprises were registered as a company, 20% as an NGO, and 14% were not registered at all. A challenge unique to social enterprises in China is that 47% of respondents state government policy or the lack of policy will severely impact their operations.
63% of social enterprises surveyed operate on a local (city or village) level. Two-thirds are headquartered in Shanghai or Beijing where they can access a large pool of human and financial capital and are closer to more forward-thinking governments.
Social enterprises are young. Over half started within the last 3 years. Because of their youth, social enterprises have limited impact. Over 70% reported annual revenues of less than 500,000 RMB and created a median of 7 jobs and 2 volunteer positions. A large proportion of social enterprises are unable to mature from start-ups to established organizations.
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