Giving Compass' Take:

• Caixin explores the philanthropic sector in China, where many foundations and nonprofits face stiff competition from online businesses tackling charitable causes.

• What can US groups learn from the survival strategies of Chinese NGOs? Marketing operations, diversifying investments and treating social enterprises more like a corporation seems to be where many orgs are headed.

• Check out this article about the philanthropist in China using AI to improve education.

“Why do I need so many jackets? I just need baby formula!” a young Chinese mother complained when she received a fourth jacket from a philanthropic organization. Her home had been hit by an earthquake and winter was just around the corner.

Although helping victims survive the winter was a good reason for nonprofit foundations to raise money and do their job, it’s doubtful whether these kind of donations meet people’s real needs or just satisfy donors.

Handling social issues efficiently by “marketizing” philanthropic groups, with these groups using demand as an indicator and commercializing their operations, is now becoming an essential value of the industry. Apart from the internal need to innovate, the Chinese philanthropy industry is also facing several challenges from outside.

The first challenge is from commercial enterprises, especially e-commerce companies, as the online business model intrinsically features sharing. For instance, a charity event held by social media giant Tencent Holdings Ltd. gave a boost to almost 10,000 charity projects, raising nearly 1 billion yuan ($151 million) in a single day. E-commerce giant Alibaba Group Holding Ltd. uses its online payment system to entice consumers and online stores to donate 250 million yuan a year for elected projects through more than 6 billion transactions. Another leading online retailer, JD.com Inc., collected more than 400,000 old toys from customers within 10 days and gave them to kids who cannot afford new toys. That’s why nowadays some people quip that enterprises involved in charity could drive nonprofit organizations out of business.

Read the full article about Chinese charities seeking strategies to succeed by Xu Yongguang at caixinglobal.com.