Funding distribution from foundations to grassroots SOs: An Exploratory Examination of Chinese Grant-making Foundations

The need for disaster relief and reconstruction after the 2008 Wenchuan earthquake resulted in an upsurge of grant-making foundations in China, which, in turn, gave rise to grassroots SOs’ expectations that such funding was the new reality in China and would continue in the future. However, the majority of grassroots SOs in China face an existential crisis of survival due to a shortage of funding from such foundations, as well as from foreign grant-making foundations. This crisis stems in part from grant-making foundations’ distrust of SOs’ abilities, the government’s approach to social welfare, and the SOs’ newness and inherent ambiguity and limitations. Within that general context, my research examines this crisis in funding through in-depth interviews conducted between March and May 2019, anecdotal evidence I accumulated over a 10-year period, and an analysis of influential domestic foundations’ distribution of funds. Specifically, I examine the number of existing Chinese grant-making foundations and whether they make grants to grassroots SOs. Additionally, this study presents a comparative case analysis of He Foundation and Narada Foundation, two influential, large-scale grant-making foundations, to test whether Chinese grant-making foundations include grassroots SOs in their funding schemes. My findings show that Chinese grant-making foundations not only are limited in number but also do not include grassroots SOs in their funding scheme; thus, these foundations are not a reliable source of funding for grassroots SOs. Two factors have prevented grant-making from becoming the main operation carried out by Chinese foundations. First, there is a discrepancy between the views of SOs and grant-making foundations. SOs view grant-making foundations as potential sources of income for projects of their choice, whereas foundations believe that SOs must first improve the infrastructure of their organizations before they will be capable of carrying out projects effectively. Second, uncertainties surrounding the position of grant-making foundations in China and their lack of professionalism could affect their long-term grant-making strategies. The reality is that very few grant-making foundations exist in China, and only a few of those that do provide grants to grassroots SOs. Some grant-making foundations have never included grassroots SOs in their funding schemes. Other grant-making foundations spend only a small percentage of their funding to support grassroots SOs and tend to select influential or excellent grassroots SOs. As a result, grassroots SOs that are underdeveloped or have no connection with these foundations have little hope of gaining access to funding resources. This results in insufficient funding for grassroots SOs in China. Nevertheless, the emergence of grant-making foundations in China has at least partially relieved grassroots SOs’ funding shortages. Funding from domestic foundations continues to be regarded as the most important financial resource for SOs.