Giving Compass' Take:

• Hong Lin, writing for AVPN, discusses the primary challenges for social enterprises in China, and some recommendations for how to implement best practices in social investing. 

• What can donors do to help strengthen the social entrepreneurship community in Asia? 

• Read more about China's philanthropy boom.  

We have witnessed the development of over 200 social entrepreneurs in the past decade, most of whom were born after 1985 and grew up literally “on the Internet”. They seem to have an instinct capability to integrate various resources and respond to social challenges more directly. However, due to limited life experience in a rather fixed social structure, they also face a number of challenges in identifying the needs of different social groups.

These are the 4 biggest difficulties social enterprises in China need help overcome:

  1. Lack of sustained funding after the start-up stage leads to missing the optimal timing of growing
  2. Extremely fragile supply chain of funds can result in business disruptions
  3. A governance loophole can be devastating in public’s eyes
  4. Lack of human resources impedes further development

At the heart of social investing is an engaged approach with the funded organisation. Capacity building of SPOs is one of the main activities social investors engage in. Ideally what is provided by the social investor or resource provider matches what is needed on the side of the SPO.

AVPN published the Guide to Effective Capacity Building and Effective Social Incubation. The report contains a summary of the best practices in understanding needs, structuring delivery of capacity building and finally assessing the impact of it, the AVPN Capacity Building Canvas and abbreviated versions of the 10 case studies.

Read the full article about biggest challenges facing social entrepreneurs by Hong Lin at AVPN.