Peoples of China

Toward a Social Enterprise Model

A Panel Discussion


Moderator: The challenges we face are quite large and the purpose of this time together is to drill a bit deeper into the main issues. We need, on the one hand, to have absolute hope in what God is doing. On the other hand, we also need a very clear and realistic assessment of our circumstances. We have a God who is greater than our circumstances; nevertheless we do need to confront them.

The title of this session is Toward a Social Enterprise Model; however, there is no one model of social enterprise. Social enterprise is not a traditional charity but it also differs from traditional business, in certain respects. One day, we will come into a better definition of "Social Enterprise", but right now our focus needs to be on effectiveness. To be an effective social enterprise, whatever that ends up being, means to be focused on sustainability. Is it sustainable? Does it have an impact? Is it really making a difference?

Let us spend our time talking about three issues. First is motivation, next is mission and lastly is money. Let's start with motivation. Why are we doing what we do? If we are not clear about that, then we are likely to become confused, and to fail. Let us assume that everyone agrees about being passionate, committed to serving the Lord, having integrity and a "stick-to-itiveness." Let me ask the panel if there are any other things they think are absolute essentials regarding motivation that need to be shared with the group.

Respondent one: The first thing that comes to mind is that when you go into communities, often you don't know where to startyou don't really know what to do. So, you need to find out where that community is at. What are the things that are on their hearts? Otherwise, I think that if we go into communities to create a social enterprise we can try to create something through our view of what we think they need. If they don't have ownership, if they don't buy into the vision of what they can do to better themselves, then we try to create projects or businesses of things we can do. They won't be sustainable because they aren't something that the local people have really bought into. What are the resources and assets in communities that the local people buy into? We need to help them develop these, to see their potential and have ownership of them.

Respondent two: The foundation I work for helps to grow social enterprises, not just in China. When we first meet the entrepreneurs, one of the first questions we ask them is, "Why are you doing this?" We often frame that question by asking, "What keeps you up at night? What is the issue about which you have a righteous anger?" One of the dangers right now is that social enterprise has become a fad. People graduate from college saying they want to be social entrepreneurs. They really have no idea what that means; they just studied it in college. Actually the best social entrepreneurs in China are those who say, "I just saw these people in need and I wanted to help them find a solution and we've been working our way towards one and it may look like whatever you call that social whatever that is, but that's not what we intended." There needs to be a very heart-level issue that will not leave you alone. When that's the case, typically it's the Lord speaking to you in a powerful way.

Moderator: Let's move to the issue of mission. Others have spoken quite clearly about a need for a plan. Motivation (passion) needs to be focused and put into a plan, on paper, that others can see and respond to. C.S. Lewis said if you can't write it down or you can't say it, then either you don't understand it or you don't believe it. By putting it down on paper, you're forced to clarify your ideas so that others can see them. Realistic goals are important as we talk about a business plan. There are certain things that potential investors are going to look for. Even more than that, it's essential to have a plan so you can lead your team.

Respondent three: I think a lot of NGOs are looking at this area of social enterprise because they have to. Social enterprise is just another word for company. I think some NGOs working in China are thinking about starting a companya social enterprise or whatever you want to call itbecause the conditions on the ground demand it. NGO registration is becoming more difficult. So, they're faced with a question: How do I stay and continue working in China, continue to be effective without being able to do it in the way I have done it in the last ten or twenty years? They are looking at a business model because this does provide a new legal way to stay in China. In talking about mission, organizations and NGOs who are being forced to think about this have to think through what their mission is. They may now have to think about something they've never thought about beforethe business plan. Many of us are being forced to think about this because we don't have a choice. It's an expedient. I've got a problem: I'm going to lose my visa. Okay, I'll start a business. I've found myself in that temptation. That's okay, start a business, but you must think about what the mission of this new business is that you're going to start.

Respondent four: Just to clarify, the reason we're focusing on this business model of the social enterprise is because we are talking about China. However, if you're talking about social enterprises in other places, they can take other forms. They don't have to be businesses; they can be NGOs, foundations or even charities. We have narrowed it down to a business because it is about the easiest way to get registered under the legal conditions of the country we are serving in. One of the things that I've seen in the different models of business or social enterprise is that some come with a very clear business mission, but they are also committed Christians and know why they are there. God has brought them here for a particular purpose. They have excellent business plans but might need a little help with the ministry side of things. There may be some members in their team or company that are really good at ministry. They come alongside as partners and together there is an overall goal.

Respondent four: I spend time with people who want to start a business in certain areas to create jobs and situations to improve a community. There are a number of things I always look for. One, does that person have a natural ability to see opportunities and to see what his niche is? Many times it is a faith issue; a person has seen some things that "are not yet." You have to know that is what God is calling you to. If you do, you will have the faith and tenacity to hold on. When you face the hardest times, you have to realize: I know I'm supposed to do this. That gives you the ability to keep going when you think it's over.

Second, I think that gifting that allows individuals to see opportunities and also enables others in their jobs is all part of entrepreneurship. If we see the entrepreneurial spirit, then we can begin to look at how to help others and encourage them. We should also look at what would be the worst case scenario. In terms of income, can we make it if we only make so much a month? On the other hand, can we make it if our expenses go through the roof? If you have a worst case scenario with expenses and income, and you can still make it, then you probably will.

Moderator: That's a great bridge for us to the last of these three critical "M's"money. This issue of money is a challenging one for us as Christians. Although Jesus talks about money more than almost any other subject in the New Testament, for me, it was always a challenge to talk about that in church. We need to talk about it, because money is itself a gift from God. It is a means for accomplishing wonderful things for the kingdom. One thing social enterprise has done is open up some new avenues for funding. I'd like to give you a list of various sources for funding. Ultimately, money comes from God, but God will channel it through someone. Here's the list:

  • Family and friends (pluses and minuses here)
  • Your home church
  • Other churches
  • Public fundraisingthat could include project visits
  • Help in kindthis could be sweat equity or pro bono services from experts who can advise you on legal or accounting issues
  • Investors
  • Foundations
  • HNWIshigh network individuals
  • Government
  • Developing revenue streamseither making sales from a product you're producing or charging fees for a service
  • Franchising
  • Partnerships and joint ventures
  • Venture capital

Respondent four: From the different sources of funding you will have different tensions. While they are not your masters, they will have certain requirements. I think it's very important to be clear in your plans where you draw your lines, what your values are and what your goals are. Don't try to fit into what the funder's goals are because they might not be in line with your goals. It can be really tough when you need funds and a person wants to give them to you, but your goals don't converge. Then you need to have the integrity to say, "This isn't a match." You need to have the courage to say "No." It's a very tough decision and I see it happening a lot with NGOs applying for funding from foundations.

Audience comment: My background was business, but when God called me to China, I started my own very small NGO. I entered this strange world of non-profits and I really didn't like it. I didn't understand it and I disliked asking for money. From the beginning my idea was to have a for-profit, to make money so I didn't have to ask for money because I was more comfortable in that world. But what I've come to realize now is that we need both. At least I do. The body of Christ needs to be involved. When people give, it's different than just praying. There's more of a connection. Thankfully, he's changed my heart about asking for money

Respondent five: I had been working in a commercial company for five years, then I went to an NGO, then I set up a commercial company. I started out with foundation money and many donations. From the start I also had business people on the board. Slowly, they pushed me saying I would have a true business. They decided not to accept any more donations. I said they were crazy. If someone wanted to give us money, we should take it; they said, "No. We have to work according to commercial rules." The journey to becoming a true business was gradual and has been a tough one for me because I thought about control and many other things. However, I believe it's not unbiblical. It's God journeying with me or pushing me in a direction that I think is sustainable. When I had the company ready to go, I had one investor who wanted to put the money upfront straight away. I thought, great, I've got the money. Then someone said to me, "The money is not your problem." A Chinese friend said, "If you need money, we can find money. The question is, "Is he the right partner?" So I turned him down. I've had times where I had no clue where the money would come from and still I had to turn down people who wanted to give me money because they were not the right partner. From a human perspective, I was crazy to do that. In the end it all worked out. So be careful.

Respondent two: I think we're starting to see models arise in situations such as orphanages or something similar. Normally we look at those only as recipients of donations, to be supported. However, we need to look for entrepreneurial ways to see those kinds of works supported. We see places around the world where people are helping children learn responsibility by teaching them skills such as raising cropsa vegetable garden or something like that. There are things we can do to equip people that we have been told are unable to help themselves. The issue is how to give dignity back to people. Even in those situations that seem to be only recipient situations, there are things we can build into them that will give people dignity, help the children and help the poor. We can find ways to help people develop the skills and gifts they have. Whatever we do, it should help people become more self-sustaining, give them the dignity God created them to have and release them into whatever they can do with their lives.

Moderator: I believe the next revival is going to happen in the marketplace. Jesus always met people where they were, and that's where we need to be. We need to meet people where they areand that's in the marketplace. We probably need a new theology so that we're doing this as the church, the body of Christ.

Image credit: Old and New China by rafallg, on Flickr