In 2015, ABC underwent a significant strategic change, transforming its business model from a free-of-charge model to a fee-paying model. Its business model is formed by three parties: consultants (which mostly are volunteers), clients (NGOs and commercial companies), and most importantly, ABC itself. This model can be described as having four parts, known as The Four Innovations, including commercialization, human resource management, digitalization, and academicization. These innovations are the true differentiators that make ABC different and successful.
Linking financial assistance and social resources with NGOs to expand their capacity supports China's ongoing process of working toward achieving the 17 SDGs. Accordingly, ABC's original aspiration is fundamentally in line with SDG 17 (Strengthen the means of implementation and revitalize the Global Partnership for Sustainable Development), especially Target 17.17 (Encourage and promote effective public, public-private and civil society partnerships, building on the experience and resourcing strategies of partnerships), since it enhances multi-stakeholder partnership building to benefit civil society.
University of Nottingham Ningbo China
ABC’s innovative business model has successfully connected volunteers and clients in multi-stakeholder partnerships, acting as a ‘linker’ between volunteers and organizations and creating mutual benefit. Volunteers are experts from commercial companies, NGOs, and social enterprises as well as students from universities. Clients include not only major foundations and civil society organizations but also large enterprises, such as Didi and Nestlé.
This innovation of the business model successfully contributes to the establishment of civil society partnerships. Regarding profitability, ABC adopts a step-variable fee-paying model, charging 1% of clients’ annual income for each project. More recently, ABC has been looking at second and third revenue growth curves, while maintaining the same mission - to serve society.
Human Resource Management
ABC has ten full-time staff, while the total number of project volunteers exceeds 4,000. Full-time staff work as the management team, mainly responsible for project and labor allocation. Yonge Qian, ABC’s president and founder, explained that basic project teams consist of volunteers, who devote ‘extra time beyond their 8-hour workday’. This mobilization of existing resources acts according to the concept of ‘sharing’, which refers to sharing the value of people.
This full-time plus volunteer mode provides ABC with a stable and low-cost talent source, which is one of ABC’s core competitive advantages, and has helped it become the largest public welfare consulting company in China. And ABC recognizes that volunteers are central. “We should not blindly meet the needs of customers, but also build a sense of community on a small scale,” says Qian.
ABC endeavors to explore technological innovation which uses an intelligent testing system based on machine learning methods to make predictions in human resource management. For example, during the selection process, volunteers will be invited to complete a 360° appraisal. Then ABC conducts statistical analysis to form volunteer portraits and identify corresponding personality traits. Currently, the consistency ratio between the results of machine screening and manual screening can reach about 77%.
In the future, ABC will build a team selecting model that selects suitable people from the volunteer database to form a team for particular projects. These innovations have greatly improved ABC's ability to employ flexible workers, and in Qian’s view, the commercial value of these models will be demonstrated in the future.
The term ‘Academicization’ refers to giving ABC the attribute of educating people and stimulating their growth and development. ABC is like a university for volunteers, who are the most essential parts of its mission. It will provide systematic training from an early stage to later stages and invite experts from well-known consulting companies such as Boston Consulting Group (BCG) to offer practical lessons. Besides, ABC provide bonuses or other benefits to volunteers based on their contributions to the team and community. This method also greatly improved the volunteers’ stickiness.
ABC’s culture is carried out to inspire people's courage and interest in solving social problems. The persistence and action of more people are the keys to bringing real and continuous change to the world.
There were two reasons prompting Qian to realize the greater possibilities of applying the volunteer model in China’s civil society sector.
Firstly, Qian participated in several voluntary works when he was in Canada. These activities were supported by well-established networks and organizations and well-trained volunteers. This changed Qian’s preconceptions about volunteer work: “Voluntary activities could be a radical power to make change happen instead of merely being charitable actions”. Secondly, he also realized two fundamental obstacles hindering Chinese NGOs from the sustainable capacity building: unstable revenue sources and the lack of high-quality talent among organizational members. “To combat these challenges, we chose the volunteer model and utilize the collective power of qualified volunteers.”
In 2015, Qian resigned from his previous job at a financial institution, embarking on his new career as the first permanent staff member of ABC. This transformation in his personal role was sparked by Qian’s interaction with leaders and volunteers of non-profit organizations: “Their grand vision, utilizing continuous social innovation to build a better community and the resilience of overcoming formidable challenges for the sake of caring for other people, deeply moved me with the brilliance of humanity.”
The success of ABC’s first project raised the morale of Qian’s team and prompted them to increase ABC’s influence in a wider range by commercializing the consulting service, attempting to eliminate the biased perception of Chinese NGOs embedded in people’s minds. ABC’s strategic shift of its business model toward a fee-paying model in 2015 was driven by the intention of attaining more commitment from their clients (NGOs). As Qian explained, “NGOs would put more emphasis on the cooperation between ABC and themselves if they need to pay for the service, motivating them to release sufficient information and assign staff for project follow-up.” Furthermore, the received service fee could be leveraged to hire more full-time employees to upgrade organizational operation and decrease ABC’s dependence on an unsteady flow of financial donations.
For the internal ecosystem, the innovative business model has guaranteed full-time employees with decent jobs and above-average wages in the short term. The HRM model and digitalization also have helped the employees and managerial consultants to run the business with minimum human resources. The academicization bonds all the employees and consultants together and adds to their perceived value and stickiness. ABC is like a utopia where the busy breadwinners can contribute to good deeds and fulfill the long-term need of self-actualization in off-work hours. As Mingjuan, one of the management volunteers said, “In ABC, I utilized my expertise, experiences and resources to further public welfare, and found a stronger and better self.”
As for external civil society partners like clients, funders, and strategic partners, including commercial corporations and universities, ABC’s innovation improved the efficiency and quality of their efforts directed towards sustainability-related causes. The intelligent talent selection and matching system are expected to automatically link clients to key solution providers. ABC’s expertise in government cooperation has also proved the value and potential of the business. Through the years, ABC’s effective deliverables gained the company long-term client relationships where the former clients recommended them to new clients through word of mouth.
Moreover, ABC serves the interests of broader society. Qing Liu, ABC’s full-time regional operation manager, explained that ABC’s latest 5-year strategy emphasizes solving root problems and focusing on ultimate beneficiaries, which indicates serving the needs of clients' beneficiaries, consisting, for example, of underprivileged groups, or the environment, among others, through working hand in hand with clients.
ABC has set a milestone in the Chinese civil society sector: the Kumquat Award, the most authoritative award for foundations in China. ABC became one of the award organizers in 2018, and collected information from 198 NGOs, established a database and completed a ranking of Chinese foundations and a set of interview case reports. In December 2020, ABC reached out to 425 NGOs to participate in the research for the award, voicing the aspirations of the huge number of NGO staff working on sustainability issues like poverty alleviation, environmental protection, disabled children’s education, etc. In the long run, ABC’s efforts have had a ripple effect across industries and borders, affecting multinational corporations like Nestlé and Didi, leading white-collar workers of all professions to participate in impact investments, and inspiring foreign counterparts to break through boundaries. All in all, ABC has a similar vision and mission with its clients and all the other civil society partners, and that is to rally all available service-oriented resources to promote the welfare of all.
Its innovative business model has helped ABC to achieve a reasonable and steady increase in profit, while the value created for clients also achieved a high annual growth rate of 41.7%. As the founder explained, ABC has a stable income source, of which 60-70% is from consultancy services, 20-30% is from the funding of other organizations, and the rest is generated by selling other products such as ABC’s research reports. Moreover, ABC has expanded its client base to for-profit companies such as Didi. Since 2008, ABC has served more than 200 civil society organizations, completed over 350 pro-bono projects, provided more than 4000 volunteers for projects, and accumulated 500,000 hours of consulting services, which is equivalent to the commercial value of RMB 300 million. After commercialization in 2015, ABC’s number of voluntary consultants almost doubled in 2016, and kept an average annual growth rate of 77.4% until 2020.
In 2019, ABC launched a new service offering: impact investment consulting. ABC has provided this service to a funding organization in the travel industry that takes on social responsibilities in areas such as travel efficiency, environmental protection, and emission reduction. To be specific, ABC has selected eight targeted institutions that are aligned with the client's strategy, helping the client develop an overall framework and implementation plan for impact investments. This not only enhanced the client's corporate image and social influence but also opened new revenue streams for ABC, making ABC a long-term partner of the investors.
Brand, scalability, and the business model are the critical success factors of ABC. Qing Liu explained, “It is our public consultation brand that can attract considerable talents to apply for volunteers every year, and this became our core competency.” Human resource management is the most crucial part of its business model. Since the business model is smoothly implemented, ABC enhances volunteer stickiness, attracts new volunteers, and ensures that volunteers provide high-quality and effective consulting services, to further attract new clients and generate higher revenue.
When we talked about scalability, Qian said, “ABC has almost completed its geographical expansion, and the large scale of our business has put us at the forefront of public welfare consulting companies. Our competitors, lacking scalability, however, might easily go bankrupt. Yet ABC is still exploring the boundaries of the industry and creating new possibilities.”
ABC has developed rapidly and established an excellent reputation, and its social and environmental contributions towards China’s civil society sector have been widely recognized with many successful cases. For example, ABC once worked for the China Foundation for Poverty Alleviation when the latter faced the problem of lacking innovation and sustainable donations. The professional consulting team was organized with five volunteers from leading consulting firms, and the final comprehensive plan provided by ABC successfully rekindled the vitality of the organization. Furthermore, ABC suggested strategically shifting the beneficiaries from a wide range of students to high school students, and therefore the endowment fund for high school students has grown from about 7 million to nearly 20 million, while the endowment for college students has remained stable at about 10 million. The Under-Secretary-General of the client organization highly praised ABC’s business model, which had a reasonable price, precisely indicated the future strategic orientation, and encouraged more involvement of NGOs in the consulting process. ABC also has made prominent contributions to the environment by supporting environmental protection clients like Friends of Nature and organizing online and offline activities like a bird protection campaign, during which ABC received 1.1 million clicks on social media and collected over 1600 questionnaires to complete an industry report.
Furthermore, ABC industriously seeks for scalable solutions to constantly engage volunteers and expands the boundaries of the HR pyramid. Accordingly, they could prove the feasibility of this model in terms of sustainably contributing to society rather than solely relying on donations. For example, ABC switched to a fee-paying model and extended its services to large corporate social responsibility (CSR) departments, helping organizations that aim to further public welfare to achieve that objective on a larger scale.
ABC contributes to the Goal 17 most via various aspects like finance, capacity building, and especially systemic issues (Goal 17.17) to promote different partnerships. ABC, serving as a bridge and key force, connects two parties of civil society: young talented people and NGOs. By removing structural barriers like lack of skilled personnel, finance, or resources, ABC enables its clients to achieve sustainable development, which eventually leads to more benefits for the sustainable development of the society. Besides, ABC also openly shares its prior project experiences and findings of critical issues in the Chinese NGO community to transfer more practical knowledge and information to NGOs with similar problems. Therefore, ABC effectively promotes civil society partnerships for sustainable development, building on its facilitator role and sharing of experiences.
In the next five years, the company’s plan is to scale the business model further to other industries, based on its flexible employment of volunteers. While the impact of ABC has expanded, increasingly young people have been guided and encouraged to engage in public welfare initiatives and volunteer work, which helps build up a support system for the civil society sector and boost social development more sustainably. Promoting civil society partnerships and a social support system, ABC, as a facilitator, inspires the next generation to contribute to public welfare and builds a sustainable society with empathy, equal opportunities, and pluralistic standards—which is the idea of ‘A better community’.
Yonge Qian, President
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Business Website: https://theabconline.org/
Year Founded: 2008
Number of Employees: 11 to 50
A Better Community (ABC), founded in 2008, is the first social enterprise in China leveraging professional volunteers mainly from leading consulting firms, Global 500 companies, and top-tier universities to provide management consulting and research services across disciplines of strategy, branding, human resources, project designing, fundraising, and corporate social responsibility (CSR) for NGOs, social enterprises and corporate CSR departments nationwide. With 6 offices in Beijing, Shanghai, Shenzhen, Guangzhou, Chengdu, and Hangzhou, ABC is committed to the sustainable, efficient, and healthy development of non-profit charities and the whole of society, with strategic analysis and customized solutions.