Steve Koon

Last March I connected with a global team from Kaospilot, a group of mostly Danish students from the international school of new business design and social innovation.

One of the projects they were developing during a three month stint in Shanghai focused on social innovation. I was sniffing their trail, tracking down the same social entrepreneurs to talk with about their work in China.  They saved me a lot of the brunt work by passing along their virtual Rolodex a.k.a. putting me in touch with some of the best and brightest social innovators they had come across in Shanghai.  Steve Koon was one of them.

Photo courtesy of Carla Fernandez

Steve, originally from Hong Kong, spent years working in the investment field before reorienting his career towards social responsibility.  While taking a class on social entrepreneurship at Harvard’s Kennedy School of Public Policy, Steve and some classmates were inspired to adapt the curriculum for classrooms in the developing world.  Hence AvanteChange was born. The organization puts students from the Philippines and Thailand in charge of engaging government officials and professionals to create socially responsible for-profits.  Steve invited me to sit in on the course he was teaching at Shanghai’s Fudan University which is, as far as he knows, the first formal class on mission-oriented business in Mainland China.

So one Sunday in May,  I headed out to Fudan to meet Steve, to learn more about his perspective on social enterprise in China and to sit in on the discussion with students as they fleshed out their own socially responsible business plans.

Twenty five undergraduate and graduate students trickled in to the lecture hall, taking a seat for the voluntary course that meets every other Sunday.  I later learned that participants were from many different academic departments, having heard the buzz of Steve’s course through friends and student groups on campus.  Steve entered with his wife and partner Sammi, and jumped right into things.

Steve began his lecture with an explanation of what a social enterprise exactly is,  offering a clear definition of a new concept to first-comers.  He differentiated  between a not-for-profit that depends on donations to operate and a social enterprise that has market-based mechanisms for generating a profit while being committed to a social mission.  After updating each other on the major donations made by CSR programs for relief efforts after the Sichuan earthquake and aftershocks (along with the political undertones of who gave how much and why), the students broke up into teams to resume conversations about their own schemes to start a social enterprise.

I jumped around, listening to and participating in some of the days discussions. Here are a few of the projects his students were developing:

• A dating service that organizes volunteer opportunities for singles,  covering costs of operation by charging an annual fee for subscribers of the service.   Not only would this help younger Shanghainese students meet a special someone, but it would provide volunteer coordination services and helping hands to needy NGOs in the city.

• A service that would help elderly people rent out their homes and relocate to an assisted living community, offering an additional source of income that could support their transition.

• A job placement Web site for not-for-profits, accessed by students who have recently graduated and are unsure about their career paths (or for those students who are sure they don’t want to enter the corporate world, but don’t know what their next step should be.)

When the class reconvened, student delegates from each team explained the progress that was made during the session and described their plan for the upcoming two weeks.  Steve listened carefully to the presentations, interjecting with bits of advice and reality checks that students quickly jotted down, taking to heart.  Steve started making connections between the different brain-children, joking about ways they could collaborate, encouraging each other to offer feedback and remarks.

The class ended with each group ready to move to the next phase, which included drafting a formal business plan.  Steve let his students know that he was recruiting for his own social enterprise, Ebay for Kids, and a group of open ears gathered around the chalkboard after class to hear their professor’s offer, all eager to learn from and work alongside Steve.

Steve is determined to see one of these ideas develop into a real-life case of social enterprise,  so that future semesters can have a go-to example of how effective students can be.  “My plan is to really focus on one of these projects, and see it happen, so that students have a success story to look up to. I hope to expand the class to over a hundred students, from different universities next fall.”

In the meantime, his Fudan students already see Steve as a role model.  While still hesitant to dive head first into an innately risky socially responsible start-up, they are inspired by the idea of improving their nation without having to sacrifice financial stability.  They see Steve and Sammi as a team to look up to.  One of his students that I chatted with on the way out confessed to me that his “parents would probably never let me take a job that wasn’t secure or traditional.  But Steve’s ideas ares so exciting, and can make so much money, that it is hard to turn down.”  Steve is not only planting the idea of social entrepreneurship in young, bright minds, but is offering the logistical support to make these ideas happen, a combination that will certainly be making waves in the near future.

To contact Steve, e-mail him at skoon[at]mac.com.

We’ve mentioned them before (thanks, Mark) in our post about social entrepreneurship in Sichaun, but in case you didn’t hear the first time around, Wokai.org is raising loan capital for microfinance institutions in China.

A big thank you to co-founders Courtney McColgan and Casey Wilson for referring to ResponsibleChina in their recent blog post at Wokai Adventures.

A message from Courtney:

Wokai [is] a non-profit dedicated to alleviating poverty in China one loan at a time. Wokai achieves this goal through a user-driven microfinance website that connects contributors around the world with borrowers in China. Users choose borrowers to support, watch repayments, and pick who to fund next. Users also consume and share user-rated and user-generated content on China microfinance. Through information and capital exchange, Wokai aims to grow the microfinance sector in China and increase opportunities for the poor.For more information, check out our website at www.wokai.org.

Check out my recent post on WorldChanging.com about the NEST collective, co-founded by Jeff Delkin and Rachel Speth of bambu, a renewable bamboo kitchenware and utensils company based in Shanghai. Stay tuned for an upcoming ResponsibleChina podcast about bambu’s vision of “responsible manufacturing.”

Proudly Made in China: NEST collective
WorldChanging Team
May 27, 2008

A group of foreigners doing business in Shanghai recently hatched a new idea to bring “design with a conscience” to the China market. NEST, as the retail collective is called, aims to unite “intelligent design” with “responsible manufacturing” through collaboration among eight different brands selling sustainable products, including Wobabybasics organic baby clothes; AOO recyclable furniture; and Jooi Design home decor and fashion accessories. The project is sponsored by Hu & Hu, a Chinese antiques company, and Arabica Roasters, suppliers of organic, fair-trade coffee.

(Image via BlogGreen)

Chinese products have been called “toxic” and created mass consumer unease recently, so China is not the obvious place to start looking for organic baby clothes. Still, with the population’s buying power and manufacturing capacity, baby clothes could be one of the most important markets for China’s economy. Sherry Poon, founder and owner of wobabybasics, a company that makes and sells organic clothes in Shanghai, is aiming to prove that “Made in China” can be organic, and she aims to spread a little style and love in the process. (The company was recently featured at the recent EcoFair in Shanghai.)

Organic cotton means that its seeds haven’t been genetically modified or treated with pesticides and that it is grown without the use of chemical toxins, which can be harmful, especially to kids. Finding cotton made without all the mainstream chemicals and pesticides is a difficult task in China. When Poon started her company, she looked for factories and suppliers around Shanghai to “lower the embodied energy of the product” (or use less energy trucking the stuff around). But in manufacturing, sometimes you have to go a little farther than home to find the right raw material.

All the companies would tell me that their cotton fabrics were all organic…it would seem obvious that cotton fabric was all natural. However, cotton farming and textile production is riddled with toxic chemicals, rendering their seemingly inert fiber to be highly toxic and potentially harmful for users. Some companies were able to produce certificates for their organic fabrics. When two of the certificates were absolutely identical and did not check out with the certification board, my optimism dimmed a little.

wobabybasics ended up as a Canadian-owned company contracting with a Danish clothing factory, selling to mostly Western consumers. Poon wanted to work with Chinese suppliers but found they were “still struggling to find their place in the market and are concerned about making profits.” Well, aren’t all businesses? China is as good a place as any–in fact, maybe better–to turn the manufacturing of a niche product into a profitable mainstream business. Poon says recently there has been an increase in suppliers carrying “certified organic and eco fabrics.” Chinese producers are understandably responding to the market as it stands now, and we haven’t given them the noise they need to go totally organic yet.

China is not the only one slow to take up more environmentally conscious products. Like most people selling green concepts, Poon says customers will base their purchasing decisions on performance and design before environmental factors:

…clients are more inclined to purchase clothes they find attractive rather than because it is organic. The fact that the products are organic and ethically made are just a bonus.

Learn more about that type of “bonus” by checking out these other cool businesses in China: Shokay (a luxury fabric line) and Mei Xiang Cheese Factory (an artisan cheese social enterprise). Both unique initiatives, supported by Ventures in Development, aim to capitalize on China’s abundant yak population in a sustainable way.

(Photo courtesy of The Library Project)

A letter from Tom Stader of The Library Project, an initiative that has helped establish 20 libraries in rural elementary schools throughout China.

“Over the past three months The Library Project created twenty libraries in rural elementary schools throughout China. More than thirty thousand books were donated with each school receiving a wide range of high quality children’s books including: history, science, short stories, fairy tales, reference books and comics. We also provided a full set of children’s encyclopedias for older students and pinyin language books for the kids beginning to learn to read. The Library Project also provided colorful child-safe tables and chairs, posters and a world globe to all the classrooms and library rooms.

These fabulous new libraries are located throughout China in the countrysides of Xi’an, Yanliang, Dalian, Lvshun, Jinan, and Changchun. At each site, The Library Project held book drives, which collected over twenty thousand quality second-hand books from local donors. We also purchased over ten thousand first-hand books from Xin Hua Books Stores at just $1 a book.

In addition to books and supplies, the school librarians received training on how to manage their new library. Since most rural elementary schools have never had a single book in their library for children to read, our Librarian Training Program gets them up to speed on day one.

….

We need your help.

There are three ways to get involved:

Help by spreading the word. You can forward this newsletter to your friends, family members and coworkers. Make a post on your MySpace page, blog to help raise awareness for The Library Project, or join our Facebook Group by clicking here. You can also host a small event at your home, work or at a local restaurant with a goal of raising enough money to provide fifty, two hundred or five hundred books for the children of a rural elementary school. If you need help organizing a fundraiser, please contact me anytime at tom@library-project.org. Thank you!

Help by volunteering. You can make a huge difference in the lives of countless children in the developing world by becoming a volunteer. There are so many different ways to volunteer: you can throw a wine tasting or dinner to introduce The Library Project to others, hang a poster above the water cooler at your office, or introduce us to your company’s HR Department.

Help by making a donation. Without money, we can’t buy books. At a dollar a book, most of us can afford to buy 10, 20 or even 100 books. Make a donation and help bring the gift of education to countless children. Our libraries generally contain about 500 - 1000 books, thus every donated book (or dollar) helps!”

Read the entire WINTER NEWSLETTER here.

You can also listen to this podcast from the China Business Network to learn more about the organization’s efforts.

This post is part of an occasional series of interviews with those working on development and sustainability issues in China, particularly southwestern Sichuan province.

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Contributing blogger Mark Hiew brings you an interview with Meg Young from Ecologia, an example of social entrepreneurship through rabbit farming in Sichuan. Here, Young explains some of her successes and development difficulties.

Rabbit breeders and interviewers. Photo credit: Meg Young

Young got her start in microfinance during college, while on a five-month long research program in Senegal, where she was introduced to a hunger project. She later connected with Ecologia, an NGO based in Vermont, during an international involvement conference.

Young came to Chengdu as a researcher in the summer of 2006 to conduct a feasibility study. Upon graduating from Middlebury College in Vermont, she returned to China through the Oxford World Leadership Corps in August 2007 on a 12-month program, which places people internationally within NGOs, following a similar pattern as the Peace Corps.

By 2006, Ecologia had been laying partnership roots in Dayi, a town 45 minutes outside of Chengdu, with a social entrepreneur named Ren Xuping. Known as the “Rabbit King,” Ren has been working with local farmers over the past 20 years, training them and providing rabbits as capital. He has affected an estimated 300,000 lives since he started his career in social entrepreneurship. Ren, like Young, was also interested in working with Ecologia when he found he was “hitting a wall” in terms of assisting beneficiaries.

A peasant from a poor family, Ren started raising rabbits at the age of 13. He later became a millionaire (in U.S. dollars) through a meat and fur factory entreprise. He was encouraged to extend his wealth to others by Deng Xiaoping, and then in 1984, through the American NGO Heifer International, he began providing direct lending of rabbits as capital. Heifer’s model of providing direct gifts of livestock for animal husbandry has been used successfully in many developing countries.

Ren Xuping helps farmers like this happy guy, who now takes his family on vacations to Shanghai, thanks to the money he earned through rabbit farming. Photo credit: Meg Young

Ren is building his own socially responsible supply chain through his philanthropy, since farmers can use rabbits locally or sell them back to him. He has great “guanxi,” or social relationships, that lie at the heart of what makes his efforts so successful.

Ren’s work in rabbit farming seemed like a natural place for microfinance. Many rural micro-entrepreneurs often still lack the start-up capital to run business. But Ren had instituted a gift model, wherein beneficiaries receive a 20 rabbit loan, then, after one year, they are then encouraged to pass on 20 rabbits to another beneficiary.

Ren’s NGO, the Rabbit King Poverty Alleviation Research Center (RKPARC), has three main pillars: working with female entrepreneurs, providing girls with education scholarships, and microfinance.

ResponsibleChina: What are some of the major challenges you face in working with your beneficiaries that may be different from those that other microfinance organizations face?

Cultural communication and language is the major difficulty Young cited for Ecologia. Ren said a cultural gap between American and Chinese staff made conversations lengthy and difficult. There are also differences in the way Ren’s RKPARC and Young’s Ecologia work together. Whereas both parties have a lot of clout, from Young’s perspective, Ecologia was looking to add “two grains of salt” to their ideas and procedures, whereas from the Chinese side they felt like “ball was in [Ecologia’s] court,” in terms of procedure and protocol.

Also, Heifer had given RKPARC firm deadlines and benchmarks that they had to follow; however, Ecologia follows a less task-oriented approach, more akin to a consulting partnership. This difference in expectations caused some difficulties.

Young says getting face time with beneficiaries is another difficult aspect of the project. Face time “ebbs and flows,” and it can be “intimidating” to beneficiaries, in that they are revealing sensitive information, which is then made more unusual by the presence of foreigners.

RC: What is the current state of organization of microfinance within the communities you work with in Southwestern China? Are they already on a quite large scale, or are they just starting off?

Microfinance is becoming more advanced and is currently scattered throughout the country. Wokai.org, a Beijing-based Web site, has plans to create a network of microfinance institutions across the country.

According to Young, many NGOs that have tried to cut and paste the “Grameen” microcredit model are struggling in their fledgling stages. They fail in China because of an underestimation of a couple of key points: 1) the important role that social relationships play in conducting business in China, and 2) the often extensive involvement of the government. For example, it’s still illegal to help people keep savings if you are not an officially registered bank. But Young also mentions that microfinance has gotten relatively easier to accomplish in China, as some regulations have already been lifted.

RC: The integral role of women in many microfinance contexts is well known. Are there any particular gender dimensions to your work that have become apparent?

Women’s role in Senegal is more focal, Young says. She quotes a development worker there as saying, “give the money to the woman, or it won’t feed anybody.” Gender relations in China are more balanced, Young believes, but there is still an expanding degree of impact when funds are given to women. Doing so changes some societal roles, and a greater percentage goes into education and long-term benefits.

Ren’s wife Zheng Shuping, the “Rabbit Queen,” has been focusing on female entrepreneurs and girls’ education.

RC: Do you see much room for innovation and creative development models—along the lines of Ashoka and the broader social entrepreneurship movement—within China, particularly at the grassroots level?

Backed by the Rockefeller Fund to expand corporate social responsibility (CSR) through social entrepreneurship, Ecologia has been creating CSR profiles of socially responsible entrepreneurs within the Chengdu region. It considers why people are making the decisions they’re making as far as social sustainability, with an eye towards internal networking within Chinese communities. The goal is to create a mentoring program between beneficiaries and those who’ve already succeeded.

RC: What are some major current issues that rural Sichuanese are facing, and what are some of the solutions that have worked?

Young says environmental policy changes have created major economic hardships for rural communities in Sichuan. A lot of farmland is being returned to forests, stripping farmers of their source of income. In many areas, coal mines are the major source of income, and while many are being shut down for environmental reasons, it leaves a great number of newly unemployed with no alternative source of income. Young also mentions the incredible rural-urban migration movement that separates many rural families. She often sees women beneficiaries who care for their in-laws and parents, as well as their own children.

“A lot of environmental solutions are Band-Aids for the scratch, when people need to be asking why are these things happening in the first place,” she says.

RC: Have you felt restricted or stymied working for an NGO in China, given civil society’s closer relationship to the government than might be the case in other countries?

Young explains that the government has been deeply involved and “very helpful.” At the moment, however, village elections are currently happening and so Ecologia has had to pause the project because it requires the full cooperation of village leaders. The microfinance lending cycle is six months to one year, which can be tenuous depending on the personal sentiments of the village leader.

As for major sources of inspiration, Young cites the “dedication and heart” of the Rabbit King and Queen. “That [two people] who have been working in philanthropy and development for over 20 years can continue to work at [such a pace] astounds me.”

She sees the project as a big victory as an example of successful multilateral cooperation—a small, Vermont-based NGO working with local Chinese social leaders using U.S. funding.

When asked for advice for young Westerners interested in coming to China to work in development, Meg offers some tempering words of wisdom:

“Know that even if you come over with a ‘can-do, idealist’ mentality, in the mean time, you’re gonna get your butt kicked and its not going to be easy. You will not learn Chinese in a day. You will learn to [take pride in] small accomplishments.”

You may have noticed that I changed my blog’s header image. Spot any differences? That’s right! I added “social entrepreneurship” as one of the three “pillars” of ResponsibleChina. Social entrepreneurship is defined in many ways.

Here are some good explanations:

What is Social Entrepreneurship? - Schwab Foundation

Social entrepreneurship

is about applying practical, innovative and sustainable approaches to benefit society in general, with an emphasis on those who are marginalized and poor.

a term that captures a unique approach to economic and social problems, an approach that cuts across sectors and disciplines.

grounded in certain values and processes that are common to each social entrepreneur, independent of whether his/ her area of focus has been education, health, welfare reform, human rights, workers’ rights, environment, economic development, agriculture, etc., or whether the organizations they set up are non-profit or for-profit entities.

What is a Social Entrepreneur? - Ashoka.org

Social entrepreneurs are individuals with innovative solutions to society’s most pressing social problems. They are ambitious and persistent, tackling major social issues and offering new ideas for wide-scale change.Rather than leaving societal needs to the government or business sectors, social entrepreneurs find what is not working and solve the problem by changing the system, spreading the solution, and persuading entire societies to take new leaps.

What is Social Entrepreneurship - PBS

A social entrepreneur identifies and solves social problems on a large scale. Just as business entrepreneurs create and transform whole industries, social entrepreneurs act as the change agents for society, seizing opportunities others miss in order to improve systems, invent and disseminate new approaches and advance sustainable solutions that create social value.Unlike traditional business entrepreneurs, social entrepreneurs primarily seek to generate “social value” rather than profits. And unlike the majority of non-profit organizations, their work is targeted not only towards immediate, small-scale effects, but sweeping, long-term change.

Please contact me if you have any story ideas about entrepreneurs in China creating sustainable, long-term social change.