Protocol | China

Tencent dominates digital donations in China. That’s the problem.

After building the only successful digital fundraising platform in China, Tencent's immense impact in the charity world raises questions about inequality, state censorship and platform responsibility.

Tencent’s penguin logo surrounded by dozens of giving and receiving hands.

Tencent's 99 Giving Day has grown into a behemoth, facilitating million of dollars' worth of donations on a yearly basis.

Image: Christopher T. Fong / Protocol

An hour before September 9, Eric, a nonprofit fundraising worker in southern China, was as frustrated as he'd been in months. It was way past his normal work hours, but he had just finished writing a few paragraphs he hoped to send to people tomorrow to ask for donations. He received his first blow from one friend, who commented that his plan felt "insincere;" and then, during a WeChat conversation with another friend, he casually brought up the project he was fundraising for and got the half-joking reply: "Don't do this to me." Eric's frustration was verging on anger.

For Eric, and countless nonprofit workers in China, this wasn't a normal day. Tomorrow would be the "99 Giving Day," an online donation bonanza that Tencent, one of China's most prominent tech companies, created in 2015 and has since grown into the most important event annually for charity workers. Every year for a few days leading up to Sept. 9, Tencent takes out tens of millions of dollars' worth of its own money to match the donations made on its Tencent Charity platform, a mini-app in WeChat where thousands of fundraising projects are listed. But to make the magic happen on these few days, nonprofit workers often start preparing months in advance, learning the platform's arcane rules, planning their strategies and mobilizing their giving communities. As the event grows bigger and the rules grow more complicated, the work is taking an emotional toll on people like Eric.

"We are exhausted, and we also have many complaints with Tencent," Eric, who was participating in 99 Giving Day fundraising for the first time, told Protocol. Like other nonprofit workers interviewed for this article, Eric asked to not publish his full name or the name of his organization to avoid government backlash. "Of course, [Tencent] has made everyone's donation experience more smooth. There are large-scale, actual changes happening. But when you see how nonprofits take part in it, it also makes you question what it has really brought us."

Seven years into its existence, Tencent's 99 Giving Day has grown into a behemoth, facilitating millions of dollars' worth of donations on a yearly basis. It isn't only crucial for the Chinese nonprofits who rely on these donations to survive. It's also important for the company, as Tencent faces unprecedented pressure to showcase social responsibility after Chinese ruler Xi Jinping called for "common prosperity." It's a complicated success story: While Tencent has dominated the digitalization of fundraising work and generated immense goodwill for itself, the fact that so many nonprofits depend on a tech company also raises alarms about inequality, state censorship and who gets to make the rules.

The platform that changed it all

The first 99 Giving Day took place in 2015, three years after nonprofits in the U.S. came up with the concept of "Giving Tuesday." While they both carve out a day to encourage donations, they diverge in important ways: 99 Giving Day is hosted by a single company and is an outgrowth of Tencent's huge power.

The event is almost entirely online and deeply embedded with Tencent's superapp WeChat. Charity fundraisers spread their messages through WeChat timelines, group chats and DMs, while donors can find a project, finish mobile payment and share an online donation certificate (for humblebragging) in a few taps, without ever leaving the app. To this day, the event doesn't have a website and happens almost entirely on mobile platforms.

"Online fundraising is different from offline fundraising. It can reach larger, more diverse audiences. And it can make donating extremely easy," Katja Levy, a research fellow at the University of Manchester and co-author of the book Charity with Chinese Characteristics, told Protocol. As of this year, WeChat has over 1.25 billion active users and has become the primary way people connect with each other in China. With a large number of potential donors, it doesn't matter if everyone is just chipping in a few renminbi. "With the 99 Giving Day, Tencent can show how beneficial its technology is for society," Levy said.

It started as a three-day event and turned into a ten-day marathon. During the 99 Giving Day in 2015, the platform amassed $20 million of user donations and matched $15 million from its own pocket. This year, it was $552 million from users and participating corporations plus $92 million from Tencent, according to statistics provided by Tencent to Protocol.

For the young nonprofit sector in China, this was a game-changer. In 2014, individual donations only accounted for 11 percent of the total received by Chinese nonprofits, according to the 2014 Charity and Philanthropic Report by Beijing-based Narada Foundation. It's digitalization that finally educated the Chinese public about charity giving and gave them an easy way to do it.

Today, 99 Giving Day is the most important time of the year for many nonprofits, especially those too small to be noticed by state-operated and corporate-backed foundations.

It has also become a big event for Tencent. This year, over 30 Tencent apps and platforms were involved. Users can boost their donation match by watching videos on Tencent's streaming platform, reading on Tencent's literature app and even using Tencent's video conference software. As Chinese Big Tech is called upon to contribute more to society through donations and other good works, Tencent, with its massive philanthropic footprint, has a leg up.

Perhaps this is where Tencent's philanthropy differs the most from that of its Western peers. "In China, corporate social responsibility is very much government-led — for instance, most CSR reports of companies publicly traded in China will emphasize how the company's CSR initiatives in a given year support whatever the Party's current public policy goal is," said Virginia Harper Ho, a law professor at the University of Kansas who studies CSR.

But beyond the state goal, many scholars and business people are willing to give Tencent the credit for going the extra mile to become a charity platform. "Honestly speaking, I think the company truly just cares about philanthropy. I don't think it should be viewed with as much cynicism as it has been in the West," Rui Ma, an investor and analyst focusing on China's tech sector, told Protocol.

Unequal distribution

Not everyone feels invited to this ever-growing party. In recent years, many grassroots nonprofits have become agitated with the fact that big charity organizations, which aren't worried about funding shortage anyway, are getting the lion's share of each year's donations.

For the first five years of 99 Giving Day's existence, the organization that raised the most was the same: China Charities Aid Foundation for Children, a charity with strong government ties. It finally conceded the throne to another state foundation in 2020, but that same year, just four organizations received over one-third of all donations from users and Tencent, according to a report by the Shanghai-based Fundraising Innovation Development Center.

"It's much easier for educational [organizations] to raise a large amount of donation during the 99 Giving Day," said Peng Yanhui, director of the Guangzhou-based nonprofit LGBT Rights Advocacy China. "It's harder if you are working on rights advocacy or policy advocacy."

When it comes to the 99 Giving Day, Peng says the pressure doesn't come from Tencent but from the state. In China, only certain organizations with state credentials are allowed to solicit funding from the public. Grassroots nonprofits that lack them must go through a qualified organization to set up a project on Tencent Charity or other charity platforms. Some LGBT rights groups have learned this practice in the past two years, finding foundations willing to give a hand.

"But in the past six months, these foundations have been under a lot of pressure, from the public security and the civil affairs bureaus, asking them to stop working with LGBT organizations," Peng said. "About last month, almost all monthly donation projects by LGBT organizations were withdrawn on Tencent."

The foundations are still supportive, he explained, and a few projects have managed to discreetly return to Tencent's platform after being removed. But they have to make their online language more obscure, removing mentions of words like "LGBT" or "rights" and repackaging the projects as anti-bullying or supporting family values.

Photo: Visual China Group via Getty Images

Charity, meet game theory

As 99 Giving Day grows, the rules surrounding the event have grown ever more arcane. But charity groups are finding it increasingly laborious to simultaneously meet the platform's requirements and stay in the government's good graces while also raising enough cash.

For more than a month, Eric and his organization have been planning on fundraising from Sept. 7 to Sept. 9, the days when Tencent has historically matched user donations. But then, at the beginning of September, he learned Tencent would also match donations on Sept. 5.

That event was given the theme of "common prosperity," likely driven by the state pressure. But for frontline organizers like Eric, it was hugely disruptive. He had to explain to donors: They should donate on Sept. 5 or Sept. 7, but not Sept 6. There was a rumor going around that the match rate on Sept. 5 would go as high as 100%, meaning it would be more efficient to concentrate resources on this day, but Eric had no way to be sure.

"How much benefit can we get [by starting to mobilize] on the fifth? Will it hurt what we get on the seventh? If it does, can we decline to participate on the fifth? We don't know [the answer to these questions]," Eric complained. "Nobody knows. The foundations don't know. Tencent can't explain it well either. It's just a black box, and everyone is having a meltdown."

The Sept. 5 fiasco is a perfect example of how, as Tencent updates its 99 Giving Day rules from year to year, it has become so complicated for nonprofits to figure out. Even without the eleventh-hour change, it requires a significant amount of labor each year for nonprofit workers to study the nooks and crannies of the platform's new rules and figure out a way to maximize their efforts. This year, when Tencent explained its rules in a series of webinars, many organizations wrote in the comments that they did not understand what they were hearing.

Tencent defends the updating of rules as necessary and well-researched to prevent fraud. "We have worked with many industry experts, scholars, lawyers, and representatives of philanthropic organizations to develop 99 Giving Day, and publish the rules and guidelines for each year's event in advance of the campaign," Tencent said in a written statement to Protocol.

"The platform has its goals ... but once there are rules, people will study the rules and take advantage of the rules," said Wang Weinan, a PhD candidate at Beijing Normal University who studies the Chinese nonprofit sector. The organizations and Tencent have effectively become two competitors in a game, Wang said, constantly trying to one-up each other, resulting in a set of ever-more-convoluted rules.

Meanwhile, Tencent's donation matches are diminishing. In 2015, for each dollar donated by users, Tencent was matching another full dollar. But that number has shrunk and become more random. Tencent says it has "a project matching model that uses expert evaluation and user feedback to help highlight smaller charities doing impactful work," but it didn't elaborate on the specifics of how this matching model works. Nor do these "small charities" know. This year, Eric estimated that the Tencent match his organization received was only about 15%.

Are the beneficiaries also the givers?

"People I know who have been in the charity circle for a long time are all displeased with what Tencent has created," said Yu, the founder of a Beijing-based nonprofit who only wanted to use part of her name for this story.

Yu learned from other organizations to mobilize dozens of "ambassadors" or "angels" for Tencent's annual event. "The purpose of setting up an 'ambassador' is to have them get the most out of their acquaintances," she said. Organizations would set a funding goal for each ambassador, who would then post on their timeline and spam their WeChat contacts to convince them to donate.

In the end, the ambassadors and staff return to their most intimate circles, leveraging their personal influence to squeeze out one more donation. And their relationships can be at risk if they push too hard.

"The key is, those who are asked to donate don't feel they are empowered. They just feel they are seen as a wallet," said Qian Hengran, director of Positive Peers Group, a grassroots advocacy group for people with HIV.

He is also uneasy with the idea that, because digital fundraising has become so dependent on WeChat, a social network built on close relationships, small nonprofits are effectively just soliciting donations from the same community they are trying to help.

Tencent's complicated legacy

Seven years later, Tencent's philanthropic ventures have left a complicated legacy.

It is undeniable that the company has built a powerful platform that makes donating much easier than before and invested billions to host this high-profile annual charity festival. "All in all, in the Chinese case, I would consider the online fundraising technology as a large step forward in terms of professionalization, overall amount of donations and transparency. I would therefore tend to give more weight to the positive side of it," said Katja Levy, who researches Chinese charity groups. Among tech companies, it will likely be seen as a rare positive example where business interests and the common good are reinforcing each other. But by becoming synonymous with digital charity, Tencent is not just responsible for its own platform, but the whole nonprofit world.

Participating in the 99 Giving Day has also left some nonprofits, especially grassroots ones that work with more marginalized communities, feeling exhausted and their work inefficient. "You need to ask yourself a question: Why do you have to fundraise on this platform?" said Eric, who wants to explore other funding resources but also admits his organization may not stop participating in 99 Giving Day right away. Qian Hengran, the HIV advocacy group director, has decided his organization won't attend any 99 Giving Day in the near future. More Chinese nonprofits are thinking the same. But for many that can't afford to lose this revenue source yet, they just have to make do with what they are given.

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