【Marketizing the NGO Sector】The NGO Sector Cannot Forego Marketization

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Over the last few months, CDB’s Chinese Website has played host to a vigorous debate on the pros and cons of the marketization of the NGO sector. The issue of marketization has long been discussed within Chinese civil society. While some see it as a way to ensure the independence and competitiveness of Chinese NGOs, others see it as a threat to the inherent values of philanthropic organizations.

A number of experts and people who work in civil society contributed to the debate with articles stating their point of view. We have decided to translate two of these articles into English for the benefit of our international readers. The one you find below was written by Xu Yongguang, the director general of the Narada Foundation and an important figure within Chinese civil society, who looks upon marketization as a positive phenomenon.

The author sees a shift towards a market-led charity sector as the best antidote to what is know in Chinese as 行政化, literally “the tendency towards administration”, which denotes being incorporated into a system led by the state rather than the market, and is deeply rooted as a concept in China’s traditional planned economy.

The second article we have translated is by Hu Buxi, and argues that the market’s focus on efficiency and profit is incompatible with the values of the charity sector, and so marketization should be resisted if possible. You can find it here.

 

In May 2009, all the 530 students at the Sichuan Fanglongju Primary School received care packages from the China Foundation for Poverty Alleviation (CFPA).

A journalist from the China Philanthropist magazine asked me: “could we use the term ‘guo jin min tui’ (国进民退,the state advances, the private sector retreats) to define the Chinese NGO sector in the past?” My answer was that this definition was not accurate. In the 1980s and 1990s the sector sprouted, benefiting from the opening-up policy and the “guo rang min jin” (国让民进,the state encourages the private sector to advance). The once totalitarian government allowed space for the progress of the NGO sector. The Regulations for the Management of Foundations (1988, State Council) stipulated that a foundation “is a private non-profit organization that manages the funds voluntarily donated by domestic and foreign social organizations, other organizations or individuals.” There was a strong groundswell for the establishment of foundations with a governmental background, which conducted philanthropic projects in various fields such as education, medicine, poverty alleviation, women and children. This gave citizens access to public affairs. Later on, in par with the economic sector, the NGO sector experienced a trend towards “guojin min tui” (国进民退,the state advances, the private sector retreats). The government came to view the NGO sector as a supplement to its social security. Donations became “another type of tax” in some regions, and the soliciting of donations through the use of political power roiled the sector.

How will the Chinese NGO sector reform? He Daofeng[1]‘s comments on “the marketization of the economy, society and politics” inspired me to come up with the topic of “countering the administration-orientation[2] with a market-orientation”.

 

The concept of charity marketization (公益市场化) has a long history

The concept of charity marketization is hardly novel. Similar ideas exist in traditional Chinese culture – “give a man a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime”; “help others by helping yourself, god helps those who help themselves”. 120 years ago, the American philanthropist Carnegie, in the Gospel of Wealth, suggested to the rich that helping a man to climb up the ladder is better than giving him alms. Rockefeller believes that the happiness in being wealthy comes from being able to help others. During the recent two or three decades the phenomenon of social enterprises, using innovative business approaches to solve global problems such as poverty and the environment, has reached a climax around the world. It has impacted greatly on traditional philanthropic concepts and operations, and the marketization of charity has become a trend.

Having been born in Wenzhou city, I may have inherited the teachings of the local Yongjia School (永嘉学派), which place an emphasis on both utility and righteousness. Marketization is simply natural to me. Decades ago, a Hong Kong research institution on the market economy wanted to recruit me as their consultant, and I was surprised:”I have only worked in philanthropy.” They answered: “but Project Hope (希望工程)[4] is a remarkable example of market operations. ” This sentence enlightened me.

The opposite of marketization is an administration-orientation. According to the Law Dictionary (《法学大辞典》): “administration is the organization and management of public affairs by state administrative departments”. Promoting administration in the NGO sector means mixing civil philanthropic affairs with public affairs. Civil philanthropy falls into the category of personal rights. Administration is power-oriented. Using state power to solicit donations represents a violation of private property by state power. It ignores the will of the people, hurts their caring instincts and damages the environment of the NGO sector. Marketization is rights-oriented. Respecting the will of the people, cultivating their caring instincts and operating according to market rules are essential for building a good NGO environment and expanding the NGO market.

The public interest market is similar to the business market in four aspects-market entities, factor markets, market rules, and marketing.

 

Market entities

Market entities are individuals and organizations that conduct business activities in the market and have rights and responsibilities, including investors, enterprises, operators, workers, and consumers.

The investors in the NGO market are the donors. They are individuals, enterprises, and foundations, like business investors. Public and private fundraising activities in the business and the NGO sector are similar too.

NGOs run their assets and projects as businesses. In the Hong Kong SAR and in some countries, NGOs are registered as companies. But NGOs, unlike businesses, cannot distribute profits and enjoy tax exemption.

NGO managers and workers are the counterparts of businesses’ managers and workers. The business market contains investors (shareholders), enterprises (with the board of directors to make decisions for shareholders) and professional managers. The NGO market has donors (approximating shareholders), NGOs (with the board of directors to make decisions on behalf of the donors and the public), and managers (like business managers). The law, interest relationships, and governance structure are similar in the two sectors.

The composition of consumers in the NGO market is much more complex than it is in the business market. Firstly, the beneficiaries are consumers. This definition is quite easy to grasp. But donors are in fact both investors and consumers,and thus have a strong influence. Donating to a project is an act of purchase, however it is aimed not at the donor’s own consumption but rather at giving to others gratuitously. Apart from tangible consumption, the donor also “buys” a spiritual commodity, that is “spiritual consumption” of a kind that is compatible with the idioms “fragrance always remains in the hand that gives roses”, “happiness lies in helping others”, and “it is more blessed to give than to receive.” Therefore, behind all voluntary donations, there is a rational choice and an exchange of equal values.

Donors, volunteers, and service purchasers are active consumers. Hayek, co-winner of the Nobel Prize of Economics, proposed the “consumer paramountcy theory” – consumers choose products based on their will and preferences, according to which the manufacturers produce and provide products. Contrary to this is the theory of producer paramountcy. During a public fundraising in the NGO market, there is a distinct consumer paramountcy. Donors will look for good philanthropic products and donate. For every 100 RMB donation, the CFPA prepares a care package for a child in the poor areas, worth 180 RMB at the local standards. Consumers, thus, enjoy a great deal. Donors used to be able to help a child complete a primary school education with a 300 RMB donation to the Project Hope. The pleasure, satisfaction and marginal benefit of this donation go way beyond a mere 300 RMB. Consumer paramountcy is essential for the flow of philanthropic resources towards efficient organizations.

The needs and consumption of the beneficiaries are the primary engines of the NGO market. However, beneficiaries are receivers of free products and services and they are passive consumers. Within the relationship of supply and demand, providers of philanthropic products are absolutely paramount. Providers are on a slippery slope towards ignoring beneficiaries’ demands, operating projects recklessly and pushing “better this than nothing” products down the throats of the needy beneficiaries. Even more distastefully, some “philanthropists” violate the dignity of the beneficiaries in the name of “philanthropy”. The distribution of philanthropic resources under a producer paramountcy mindset greatly thwarts the efficiency of the NGO market. The results of a business investment are easily visible in profits, but the results of an NGO investment depend on evaluation, which is what serves as a means of restricting producer paramountcy within the NGO sector.

When it comes to the operations of the NGO market, producer paramountcy is not necessarily negative. It is necessary for the producer to be paramount in order to identify social problems, design innovative philanthropic products and lead the trends of consumption. Venture philanthropy (philanthropic risk investment) projects by non-public fundraising foundations, as engines of social innovation, fit in even better with producer paramountcy theory. The Narada Foundation’s Ginkgo Fellowship Program funds future NGO leaders with a high potential who have a global vision accompanied by a practical attitude. This demonstrates the producer paramountcy. Ginko Partners must meet the foundation’s criteria and will receive 100,000 RMB annually for three years as living expenses and for their personal development.The money is spent according to the plans outlined in their own proposals, so consumer paramountcy is also realized.

The research and rational use of consumer paramountcy and producer paramountcy is important for NGO marketization.

 

The role of the factor market in NGO marketization

First of all we must look at the NGO financial market. Philanthropy needs funds. Chinese foundations are categorized as “non-banking financial institutes” and governed by the Bank of China. The financial market pushes funds towards highly efficient units, simplifies payments and transfers, safely and effectively maintains and increases the value of the assets, and provides philanthropic trust management, which are all cornerstones of the NGO market. The development of fundraising in the NGO sector is synchronized with the financial market. In traditional public fundraising and private fundraising, there are creative fundraising modes such as database fundraising, monthly donations by credit card, internet financing and Wechat and Weibo crowd sourcing. During this year’s “two meetings” of China’s top consultative bodies, Ma Weihua, a member of the National Committee of the Chinese People’s Political Consultative Conference, put forward a very valuable proposal to introduce the trust system into the management of China’s philanthropy and charity funds. This marks the mainstreaming of once marginalized philanthropic assets in the financial market. But the need for such a proposal to advance the charitable trust law, which has been in effect for 12 years and is not yet implemented, is still worth a degree of reflection.

 

The NGO Labor Market

The NGO labor market is composed of professionals and volunteers in the NGO sector, the latter of which provide gratuitous services. The market mechanism provides a test for the Human Resources policies of the NGO labor market. At present, the moralization and demonization surrounding the issue of NGO workers’ salaries discourages real talent from joining the sector and hamstrings its development. Leaders of NGOs, when helping the disadvantaged and pursuing their personal ideals, need to consider whether they are putting their employees at a disadvantaged position themselves due to their incompetence and backward thinking.

 

The technology and information markets

Professionalism is increasingly asserted in modern philanthropy. Technical trade and communication are indispensable for the progress of the NGO market. IT technology brings mobile networks, new media, alternative donation payment methods, and improved transparency that enable easy access for the public to NGO information and philanthropic projects. It provides the primary opportunity for NGO marketization and is the catalyst for the reshuffling of the NGO market.

 

NGO Market Rules

The rules in the NGO market are virtually the same as in the business market: being demand-oriented; respecting the rights of individuals (voluntary donation – fair trade); opposing the monopoly of philanthropic resources and ensuring fair competition between charitable organizations; distributing philanthropic resources to achieve maximum efficiency; ensuring that the government has a supervisory instead of a participatory role (government operations are the main cause of weak supervision); holding fast to a moral baseline while avoiding “moral kidnapping”; and also abiding by laws and regulations, maintaining self-discipline, transparency and social supervision; all of these are important rules for a healthy NGO market.

The social capital rule is unique to the NGO market. The NGO market is a network of donors, volunteers, beneficiaries and the public. The healthy operation of the NGO market nurtures good social relationships, builds social trust and increases social capital. More social capital, which is based on social relationship and trust, leads to lower costs for social trade, including business activities, and generates marginal utility to produce economic value. China faces rigorous challenges on social trust. The legitimacy of NGO’s existence depends heavily on whether they contribute to restoring social trust and cultivate good social relations.

 

NGO Marketing

NGO marketization demands effective marketing. NGO marketing can refer to the definition of “marketing” approved by the American Marketing Association: “Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.”

Satisfying the needs of society and human beings is the basic value for NGOs. This value can only be achieved through marketing. As subjects of NGO marketing, NGOs should, first of all, clarify their mission, research social problems, identify needs, and find their positioning. They should develop innovative products (projects) and price them properly (to conduct fundraising and service sales), and attract donations and service purchasers through advertising and branding – mass transmission differentiates philanthropy from traditional charity. The final goal of NGO marketing is to realize the organization’s value through effective services and the implementation of projects. The targets of business marketing are products and consumers and the targets of NGO marketing are investors in the NGO market, donors acting as consumers, the beneficiaries and the governments that purchase social services. The point of business marketing is to deliver value through bilateral interaction between businesses and consumers, while the point of NGO marketing is to interact with and balance a multitude of actors including donors, service receivers, beneficiaries and governments in order to achieve maximum interest for all parties.

In the value chain of NGO marketing, different NGOs have different roles as both “businesses and consumers”. Generally, foundations are often providers of resources, working with professional service-providing organizations in their chosen fields and achieving value together. Public interest service-providing organizations and social enterprises work in multiple fields and face the public as the terminals of social services. Closely related to them are advocacy organizations for civil rights and policies. Philanthropic support organizations are to serve NGOs and provide services in accounting, finance, investment, fundraising, law, information, consulting, branding and capacity building. There are also research institutes and civil think-tanks that provide theoretical ground for the development of the sector.

Sectorial associations and self-regulatory associations are representatives of the NGO sector and make the sectorial standards (without needing administrative permissions according to the law), and constitute a key mechanism for sectorial excellence. The marketization of the NGO sector calls for the establishment of independent sectorial associations.

 

NGO Marketization responds to popular sentiment

The planned economy depends on the visible hand of the government and the market economy depends on the invisible hand of supply and demand. The rule of supply and demand results derives both from people’s desire for profit and from their altruism. Mencius said, “compassion is common to all men.” Universal love, compassion, honor and religious sentiment are at the root of philanthropy. An administrative orientation in the NGO sector is not only incompatible with market rules, but will also lead to an even more disastrous result than a planned economy: a monopoly on resources is possible, but a monopoly on charitable hearts is not possible. A monopoly of philanthropic resources will result in withered charitable hearts.

During the Lushan earthquake in 2013, the government withdrew itself from the fundraising market and civil donations reached their climax. The total donations from over 100 foundations exceeded the sum raised by the entire Red Cross System in China, and was many times superior to the total donations raised by the China Charity Federation. One Foundation alone raised more than the Red Cross Society of China’s offices in Beijing. Contrary to similar situations previously, there was seldom any criticism and the right to voluntary public donation was respected. Even if there were doubts about the use of the donations, it was understood that the NGO market could self-regulate, without harming the government.

The marketization of the NGO sector aims to restore the fundamental position of the market in distributing philanthropic resources. It is the key approach to the reform of the Chinese NGO sector. The success of excellent Chinese grassroots NGOs can find its root in marketization. All the GONGOs that had successful reforms followed the rules of marketization. On the other hand, any organization that attempts to stick to an administration-orientation so as to use its power to control philanthropic resources will eventually be weeded out by the market.

Marketization differs from commercialization (商业化). Marketization  the rules while commercialization stresses profit. The market is an ocean and businesses are ships in the ocean. Those once wielding the ships of business have turned to the NGO sector and will surely contribute to its advancement. Many successful foundations and NGOs have sharp business elites as dominant players.

The marketization of the NGO sector is the right path, but it is also a long path that requires us to liberate our minds and change our mindsets. After the long struggle between the market and administration-based orientations, let philanthropy return to the people, to common sense, to reason and to the rule of law and let the Chinese tradition of charity rejuvenate. This course of action is highly beneficial to public welfare and social stability, so shouldn’t all my fellow NGO workers devote themselves to it?

 

[1] He Daofeng (何道峰), former chairman of the China Poverty Alleviation Foundation.

[2] Editor’s note: 行政化, or literally “administration-orientation”, refers to a system led by the government rather than the market.

[3] The Yongjia School was a Confucian school of thought which was born in Yongjia, Eastern Zhejiang. It stressed the importance of trade for the country and society, and opposed Ancient China’s policy of suppressing commerce and stressing agriculture

[4] Project Hope is a well-known project founded by the author in the 1990s which aims to build up schools for China’s poor rural area with funding from the public.

徐永光:公益要去行政化、去道德化,不可去市场化

2016-05-16 11:15:35  来源: 南都公益基金会  作者:徐永光    点击数量:1632

        该文为徐永光在中国人民大学“当代中国文化变迁研讨会”上的发言

从80年代中后期算起,改革开放后的中国民间公益历时30年。30年间,公益文化随着经济、社会、政治的发展变化而发生变迁。以本人的亲历观察,我以为中国公益经历了“国让民进萌发期”、“行政管控回潮期”和“创新突破转型期”三个阶段。

 

       第一阶段,”国让民进萌发期”(80年代中后期到2004年《基金会管理条例》颁发,近20年)。这一阶段伴随政府改革放权,一批有改革理想的人士冲出体制进入社会领域,创办了各具特色的公益基金会及社团。这些自上而下的社会组织利用政府释放的空间,动员民间力量参与公共事务,也在一定程度上弥补了公共财政投入的不足。这一时期出现的以希望工程为代表一批优秀公益品牌,基本上是按照需求导向和市场化的模式来设计运行的,建立了不错的管理规范,公开透明,平等竞争,在公益启蒙和激发公众参与热情上可圈可点。

 

        第二阶段,“行政管控回潮期”(从2005年到2012年,前后7、8年)。2005年,全国人大政府工作报告首次提出“支持慈善事业发展”。学界往往把它解读为“政府更加重视慈善事业”;康晓光则说是“行政吸纳社会”。实际情况是,各级政府直接把“支持慈善事业发展”改编为“支持慈善事业,发展第二税源”。从2006年开始,许多地方政府以支持慈善为号令,大刮“慈善风暴”,强行摊派,以权谋捐,一些县级市,动辄派捐10亿、数十亿。中华慈善慈善总会创会会长崔乃夫痛斥“这是对慈善事业的破坏”。2008汶川地震,760亿捐款8成进了政府账户;2010玉树地震,5部委下文收缴基金会的救灾捐款。到了2011年,中国红十字会、中华慈善总会和多个基金会沦陷,有的是信任危机,有的是管理混乱,有的是躺着中枪。社会对慈善的信任度陷入低谷。其背后,是政府把慈善当“肥肉”来吃,不尊重私人财产权,让社会爱心受伤,遭致公众不满情绪的反弹。

 

        第三阶段,“创新突破转型期”。(从2012年党的18大召开到慈善法出台的今天和未来若干年,也许到党的20大)。中央提出社会治理体制创新,官民协同合作平台涌现,官办慈善与草根NGO优势互补、资源共享,互联网公益兴起,商业与公益融合,社会企业运动方兴未艾。这个阶段,公益创新模式频出,旧的慈善体制根基松动,公益文化领域去行政化已经成为共识,在日趋多元的公益文化思潮中,公益市场化与道德化两种观念的对峙与影响,对中国公益行业的价值导向及其发展不可小觑。

 

在我2年前发表《公益市场化刍议》之后,不断听到“警惕公益市场化”、”不赞成公益市场化”的批评声,我看到文章都会转发,希望引起辩论。乃至在一些论坛上,我会请反对者”向我开炮”。可惜,迄今还没有听到稍有说服力的反对理由让我修正自己的观点。

 

        市场化本身是一个中性词,指的是以市场需求为导向,以公平竞争、优胜劣汰为手段,实现资源充分合理配制、效率最大化的机制。公益市场化的灵魂是志愿精神,正常的公益活动都应符合自愿、等价、有偿的市场交易规则。公益要等价有偿?很多人一听就反感。

 

有一位优秀的草根组织领导人,因他的努力给社会带来了改变,但他不同意公益市场化的观点。我问他“你付出了那么多,自己得到什么好处”?他一听,满怀深情地谈起自己的满足感、荣誉感,说自己得到很多很多,付出再多也值得。我说,这不就是”等价有偿吗?也许还是超值回报呢”!

 

     不赞成公益市场化不等于主张道德化,但把公益看成”无私奉献”,用“利他”排斥功利,则是道德化手握的利器。殊不知,“既无功利,则道义者乃无用之虚语”(永嘉学派叶适)。《道德经》说,即便是身先士卒的圣人,“非以其无私邪,故能成其私”,意思是“无私是为了成大私”。孔子说“己所不欲,勿施于人”,换个角度,就是“己所欲,施于人”。爱他人,首先是自爱。我能坚持做慈善近30年,根本动力就是自爱,爱自由,能做自己喜欢的事。

 

无私奉献不仅违背人性,也不合“神性”。佛教说“自他二利,人人成佛”;基督教说“施比受更有福”;中国传统文化讲“积善之家,必有余庆”,“善有善报”;志愿服务的名言是“赠人玫瑰,手有余香”;《义务工作香港宣言》指出:“义务工作不仅能帮助别人,义工本身也因此受惠”。我写过一篇文章《志愿服务的原动力是有私奉献》,地球村创办人廖晓义看似不食人间烟火,但她看到我的文章后力示赞同,说:“我就是有私奉献”。

 

一次讨论,我说了世界上不存在无私奉献的人。有人反对说:有。母亲对孩子,就是无私奉献。乍一听有理,但仔细一推敲发现:不对啊!子女不就是母亲的私吗?就因为孩子是母亲最大的私,才愿意付出最大的爱。

 

       做好事有回报--主要是精神,也不排除物质,好事会做得更好;同样,接受帮助的人,要付出成本,这样的帮助才会更有成效。一次,孔子的学生子路救起一名溺水者,那人感谢他送了一头牛,子路收下了。孔子高兴地说:“鲁国人从此一定会勇于救落水者了。”他教学生也不是白教的,“吾弟子三千,逢年过节,一人一束修(一捆腊肉),所得无数,储蓄满室”。大儒王阳明在湖南龙兴讲寺讲心学,闻讯来了很多人,他说:“收费”。结果来的人跑掉了9成。王阳明很坦然,说,真有心来听心学,不在乎一点学费。在乎那点学费的人,根本不会真的用心来听。看来,先圣们也深谙“公益市场化”的道理。

 

女子德慧大学堂创办人王红做过公益教育免费的尝试。每期培训班她都会留出一个免费名额给单亲贫困母亲,每次都会有许多人打破头来争这个名额,而每次免费来的都学得很差。而越是不远千里付费来学的,都学得好。实验三年,无一例外,王红终于决定再不搞仁慈的免费培训了。

 

 

         今天,我也要宣布一个决定:今后凡是对学员免费的公益培训活动请我讲课,我将一概拒绝。因为这类拿着政府补贴或基金会捐款,不吝烧钱的免费公益培训,干扰了公益培训市场的正常竞争秩序,将可能导致劣币驱逐良币的可悲后果。一位专业培训领域的NGO领导人向我抱怨,政府埋单的质量不高的免费培训,已让他的收费培训难以为继。所以,免费公益在某些时候貌似为善,实乃作恶。在扶贫领域更是如此,输血式扶贫,已经把一些地方的穷人培养成了懒人、废人。

 

市场机制就是亚当.斯密所说的“无形之手”。商业如此--商人因“自利”而“利他”;公益也是如此,人们因“利他”而“自利”,获得精神的满足,道德的升华,乃至灵魂的救赎。

 

       创新性不足,市场化程度低下,是制约中国公益部门发展的痼疾,而公益道德化则让中国公益雪上加霜,内忧外患加剧。内忧者,道德优越感成了公益效率低下的自慰剂,道德标签可以作为掩盖机构能力不足,躲避优胜劣汰的挡箭牌;外患者,道德绑架让公益从业者得不到应有的尊重和合理的劳动报酬,创新探索只许成功,不许失败,让你动辄得咎,寸步难行。更可怕的是,法治不健全,社会道德沦丧,又给了公益道德化肆意发挥的空间,“道德家”掌握着道德话语霸权,道德审判可以凌驾于法律之上。这次人大硕士雷洋事件,在一些人眼里,生命不值钱,道德价更高。

 

不同时代有不同的道德观,不同文化背景有不同的道德标准。道德解释的不确定性也使得道德很容易成为任人拿捏的糖人,乃至于根据需要把伪善人塑造成“道德模范”。在泛道德化传统强盛的中国,公益道德化对公益文化的误导误伤,一时不会消停;对其虚伪性、危害性不可低估。

 

我不得不再次大声疾呼:“警惕公益道德化”!

Translated by Li Yuanhui

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