January 23, 2010
A few days ago, I interviewed Xu Yongguang, founder of the private foundation, Narada or Nandu in Chinese. Mr. Xu was at the top of the list of people I’ve wanted to interview, and I’ve asked him to speak with me about the impact of the Sichuan earthquake on China’s NGOs when I give a talk on that topic at the Foreign Correspondent’s Club later in February.
Xu is arguably the best-connected social entrepreneurs in China, controls millions of yuan in funds through his position in Nandu, and has made it a top priority to support grassroots NGOs in China. Xu’s impact started to be seen after the Sichuan earthquake when most of the public’s donations poured into coffers of government-run foundations (GONGOs) like the China Charity Foundation and the Chinese Red Cross. Since the earthquake, not only has Nandu funded many grassroots NGOs, but Xu has pushed these government-run foundations such as the Chinese Red Cross, the Poverty Alleviation Foundation to start giving money to grassroots NGOs for the first time in the history of the PRC. This flow of funding from domestic foundations has begun to change the funding structure of grassroots NGOs which used to rely almost solely on international funding. Since 2008, some NGOs are beginning to see their reliance on international funding drop to around half, instead of the usual 80-90 percent.
Xu is a fascinating character because he was a high official in the 1980s, no less than the director of the Organization Department of the Communist Youth League. Then in 1988, he made his break away from government service when he founded the China Youth Development Foundation, a government-run foundation famous for its Project Hope schools that have been built in poor areas throughout China. Xu is the brainchild of Project Hope, and is proud of his achievement. He told me in the interview something that I had read in the media, and that was none of the Project Hope schools in Sichuan had collapsed in the earthquake. When he said that, I asked him if it was really true. He answered with an emphatic yes.
According to Xu, during the 17 years he was overseeing Project Hope, they raised funds totaling more than 3 billion yuan, assisted 2.89 million children in poor areas, and built 12,559 Hope primary schools. As the driving force behind Project Hope, Xu can take much of the credit for building what is perhaps China's most influential brand of social welfare.
Project Hope also caused Xu a great deal of distress because in 1994, a Hong Kong publication claimed that Xu was embezzling money from Project Hope funds. Xu took the publication to court for libel and eventually won a court settlement in 2000. But the publicity surrounding the embezzlement claims eventually took its toll, and in 2005, Xu left the China Youth Development Foundation to start the Nandu Foundation with an injection of 300 million yuan by the Shanghai Nandu Group.
Xu Yongguang and Nandu are important not just because of what they are doing, but because of an important trend they represent. Nandu is one of a number of private foundations that were started after the 2004 Regulations on Foundations was issued. The Youcheng Foundation and Vantone Foundation are two others. These private foundations represent an important force in China’s civil society because for the first time in the PRC’s history, wealthy private entrepreneurs are engaging in social and environmental issues by starting their own foundations and funding nonprofit, nongovernmental organizations.