China’s wealthy look to make ‘so­cial im­pact’ on ed­u­ca­tion

China Daily (Canada) - - CHINA - By PAUL WELITZKIN in New York paulwelitzkin@chi­nadai­

It’s called so­cial im­pact in­vest­ing, and in China a group of en­trepreneurs in­tends to use the unique type of fi­nanc­ing and prob­lem solv­ing ap­proach to help im­prove ed­u­ca­tion.

So­cial im­pact in­vest­ments are in­vest­ments in com­pa­nies, or­ga­ni­za­tions, and funds with the goal of gen­er­at­ing so­cial and en­vi­ron­men­tal im­pact along­side a fi­nan­cial re­turn, ac­cord­ing to the non­profit Global Im­pact In­vest­ing Net­work.

“A group of wealthy Chi­nese en­trepreneurs have de­cided to make a con­tri­bu­tion to ed­u­ca­tion in the coun­try. Rather than just do­nate money or es­tab­lish a grant, they want to is­sue fi­nanc­ing in the form of a bond that will pro­vide a re­turn so it can be­come self sus­tain­ing and even­tu­ally be used on other so­cial prob­lems,” Ray­mond Hor­ton, fac­ulty di­rec­tor of pro­grams in so­cial en­ter­prise at Columbia Univer­sity’s Business School, told China Daily.

The 13th So­cial En­ter­prise Con­fer­ence at the business school on Oct 31 hosted a spe­cial “China Mo­ment” to


her than just do­nate money or es­tab­lish a grant, they want to is­sue fi­nanc­ing in the form of a bond that will pro­vide a re­turn so it can be­come self sus­tain­ing and even­tu­ally be used on other so­cial prob­lems.” RAY­MOND HOR­TON FAC­ULTY DI­REC­TOR OF PRO­GRAMS IN SO­CIAL EN­TER­PRISE AT COLUMBIA UNIVER­SITY’S BUSINESS SCHOOL

re­lease the re­sults of a study on China’s so­cial im­pact in­vest­ing. It was cospon­sored by the main or­ga­ni­za­tion in the coun­try en­gaged in so­cial im­pact in­vest­ing, the Shen­zhen In­no­va­tion Cor­po­rate So­cial Re­spon­si­bil­ity De­vel­op­ment Cen­ter (CSRDC).

Be­gin­ning in the fall of 2015, a train­ing pro­gram for Chi­nese en­trepreneurs who want to en­gage in so­cial im­pact in­vest­ing will be hosted jointly by the CSRDC and the business school.

Hor­ton said next year’s train­ing pro­gram is the re­sult of a mem­o­ran­dum of un­der­stand­ing be­tween the business school and CSRDC.

“We will host the group and in­tro­duce them to fac­ulty mem­bers who are en­gaged in ed­u­ca­tional re­form. We will also in­tro­duce them to phi­lan­thropists in the US who are in­vest­ing in ed­u­ca­tional re­form,” he said.

One of the main fea­tures of so­cial im­pact in­vest­ing is “that it’s a way of turn­ing in­vest­ments into so­cially use­ful ini­tia­tives in way that re­quires solid in­for­ma­tion (met­rics) to mea­sure the suc­cess of the ini­tia­tives,” said Hor­ton.

An ex­am­ple of so­cial im­pact in­vest­ing in the US in­volved Gold­man Sachs Group Inc, which launched a so­cialimpact bond in 2012 that funded a pro­gram aimed at re­duc­ing re­cidi­vism among teenagers at New York’s Rik­ers Is­land jail. It in­cluded a pro­vi­sion that said Gold­man would profit if the four-year pro­gram suc­ceeded in sig­nif­i­cantly re­duc­ing re­cidi­vism.

The re­lease of the re­port -- 2014 So­cial Im­pact In­vest­ment in China --de­tailed the re­sults of the study of so­cial im­pact in­vest­ing in­volv­ing 100 large firms in China. Funds for the study were pro­vided by CSRDC and the Shen­zhen Char­ity Fed­er­a­tion and So­cial En­ter­prise Cen­ter of Shang­hai Univer­sity of Fi­nance along with ma­jor Chi­nese cor­po­ra­tions.

Ac­cord­ing to CSRDC pres­i­dent Liang Yudong, the con­fer­ence pro­vided an im­por­tant venue for the first “China Mo­ment”.

Since 2012, the CSRDC has been op­er­at­ing a pro­gram called So­cial En­ter­prise Growth Plan for Chi­nese En­trepreneurs. The pro­gram has been train­ing ex­ec­u­tives of 100 firms al­ready in­volved in so­cial im­pact in­vest­ing.

One of the par­tic­i­pants, Sina, one of China’s largest net­work com­pa­nies, has teamed up with China Mer­chants Bank, the na­tion’s fourth-largest bank, to found China’s big­gest net­work­fi­nance-in­ter­ac­tive pub­lic crowd­fund­ing plat­form. That plat­form is ex­pected to at­tract char­i­ta­ble do­na­tions of around 1 bil­lion yuan ($163.5 mil­lion) an­nu­ally and plans to en­gage in im­pact in­vest­ment prac­tice cases such as tar­geted char­ity fundrais­ing drives.

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