Ma Huateng: Every Year 1-2% Of Our Profit Will Go To Charity, WeChat Will Also Launch First-Aid Function

(Chinese Version)

Mark Zuckerberg has announced to invest at least $3 billion to start the Chan Zuckerberg Initiative that set to cure, prevent and manage all disease by the end of the century. Ma Huateng then subsequently revealed Tencent’s plan on charity.

On September 23rd, Ma Huateng stated at an international charity event in Hong Kong that Tencent hoped to give out 1-2% of its profit to charity and make charity more transparent and more accessible to the public through its Internet platforms and technological means.

Ma Huateng mentioned in the Q&A session that Tencent has entered the developmental phase from the survival phase, around seven years after its establishment in 1998. “Our five founders have started to think what will could bring to the public with our influence and enterprise fortune,” Ma said. “We started to think about starting China’s first Internet charity foundation during 2006 and 2007. We set a rule internally, that we will put at least 1% of our profit in charity every year. Our donation will account for 1% to 2% of our profit.”

According to open statistics, Tencent’s net profit hit ¥32.41 billion in 2015, a year on year growth of 30%. That said, Tencent’s funding for charity will also rise along with the profit.

“In our opinion, giving out money is not the ultimate solution. What’s more important is our platform’s influence. Tencent Foundation has built an active charity platform that aims to connect thousands of charities, NGOs, charity programs and millions of users.”

“We hope to bring transparency to the public with our platform so as to allow everyone to be able to find and engage in projects that they are interested in or that are nearby them. Users can also set regular donation setting like monthly donation to help out projects,” Ma Huateng said, believing that Tencent’s experience in Internet products will bring great result to the table.

He also pointed out that Tencent’s charity operation has been taking off due to the advancement of mobile Internet technology since China has an extremely large smart phone user base. For example, 90% of the donations on Tencent’s charity platform are completed via smart phones, among which 80% are donations from social network. When a disaster occurs and a user notices it, the user will make a donation and send relevant information to his or her friends, asking them to make a donation as well.

Ma also mentioned how some innovations on technologies had been applied in charity. With WeChat’s official account for workout, WeRun, for example, users can donate their steps after walking for 10,000 steps. Sponsors will then make a donation according to the donated steps to charity programs that the users want to support. Besides that, users can also donate through voice messages or recordings. Some can even make a book recording for the blind or post important information of missing children to help out the search.

It should be noted that Ma Huateng also mentioned a first-aid function on WeChat. “For instance, if someone has a heart attack, how do I find nearby AED, or where I can find people who know to perform first-aid operation, where are the volunteers?” Ma Huateng said. “With our technology, the user can simply press a button on the phone and receive an emergency call. He will be able to know your location and come over to help you.”

China’s charity is growing fast in scale, from the ¥10 billion in 2006 to ¥100 billion over the course of a decade. However, in Ma’s opinion, it’s the just beginning and that China should learn from the west on charity for a long period. He also stated that the core issues today is the lack of a talent pool: “China falls short of talents in the charity field, especially those who really know all the process and procedures well. Such talents are just rare and hard to find.”

He voiced out on the forum that charity is a complex matter, which is in fact a process of reallocation of social wealth and resources. This process involves many sides such as societies, governments, enterprises, and individuals etc., as well as aspects like concepts, talents and policies etc., he added. In this case, it takes efforts from all walks of life in society to really push this industry forward.

Based on its experience of technologies for charity, Tencent launched its 9.9 Giving Day in 2015, which has already renewed the online donation record for two consecutive years. Tencent charity’s latest statistics show from September 7th to 9th, the donation volume for the Giving Day processed by Tencent’s charity platform hit ¥305 million, with 6.77 million participants. Many users transformed into grass-root heroes by launching donation activities on their WeChat Moment. If we count donation from Tencent Foundation and other enterprises in, then the volume would hit ¥600 million, which can support over 3,600 charity programs.

Ma Huateng and Tencent’s executive director Liu Zhiping jointly stated in an internal notice to the staff: “9.9 Giving Day’s true value is not at the donation volume that was accumulated in a few days. What truly makes 9.9 Giving Day worthwhile is that it penetrates our everyday lives.”

Besides Tencent’s exploration in charity, Ma Huateng also personally participated in charity projects in many areas, including healthcare for children, disaster relief, and environmental protection etc. Ma has announced in April this year to donate 100 million stocks to an ongoing charity foundation that sets to support healthcare, education and environmental protection charity programs as well as leading edge technology and fundamental science exploration mainly in mainland China through charity organizations and projects.

“After ten years of practice and exploration, we have come to terms that there’s still a long way for China’s charity industry to go. We are in need of a more sustainable and more efficient systematic planning and framework through which we can give back to society. By boosting the management efficiency of the charity industry with professional teams, I personally can also put more efforts in Tencent’s strategy, product experience and other long-term blueprints,” he added.

What follows is Ma Huateng’s speech transcript, edited by TMTpost:

Established in 1998, we Tencent has been through almost 7 years of development. We have entered a relatively good phase, a developmental phase, from early survival-centric phase. Our five founders have started to think what will could bring to the public with our influence and enterprise fortune. We started to think about starting China’s first Internet charity foundation during 2006 and 2007. We set a rule internally, that we will put at least 1% of our profit in charity every year. Our donation will account for 1% to 2% of our profit (last year’s net profit was over ¥30 billion). We hope that we can not only give out material support, but also provide something more with our platform’s influence.

In our opinion, giving out money is not the ultimate solution. What’s more important is our platform’s influence. Tencent Foundation has built an active charity platform that aims to connect thousands of charities, NGOs, charity programs and millions of users. We noticed that many users and netizens are very supportive and really want to give out to society.

But they are also troubled by the fat that they don’t really know what projects fit them the most and that they are not confident in the projects they have stumbled on. Our platform aims to solve this. One thousand people have one thousand needs. We hope to make charity more transparent and accessible for users, allowing them to choose projects they are interested in. Perhaps just charity projects nearby them, or projects in their familiar areas. Users can also set regular donation setting like monthly donation to help out projects. This is something we came up with from our experience in Internet products. The result is quite good.

Personally I have participated in many charity projects other than Tencent’s that can be divided into three groups. One is aid for children, AI You Foundation. This foundation focuses more on aiding children born with heart diseases. Another is One Foundation, which focuses on disaster relief, especially the relief for disasters like the Wenchuan Earthquake in 2008. One Foundation is professional for this and I am also a member of the council.

The other is the environmental protection area. Including Alibaba’s Jack Ma also teamed up with us alongside with many other entrepreneurs to set up Taohuayuan, which focuses on environmental protection. After ten years of practice and exploration, we have come to terms that there’s still a long way for China’s charity industry to go. We are in need of a more sustainable and more efficient systematic planning and framework through which we can give back to society instead of just temporary plans. So I have decided in April to give out 100 million stocks of Tencent to establish a foundation.

Just then we were talking about it. I have learned a lot from the stock and asset transfer process. I realized that charity is a complex matter. There are many things I have never considered before. Once I dig deeper questions surface. So it’s a pleasure for me to be here to have a dialogue with everyone present today and learn from all of you.

China’s donation volume has grown from the ¥10 billion in 2006 to last year’s ¥100 billion, which is incredibly fast. However, what impressed me the most is the application of Internet technology. Tencent’s charity operation has been taking off due to the advancement of mobile Internet technology since China has an extremely large smart phone user base. For example, 90% of the donations on Tencent’s charity platform are completed via smart phones, among which 80% are donations from social network. When a disaster occurs and a user notices it, the user will make a donation and send relevant information to his or her friends, asking them to make a donation as well.

China is leading force in the world in this sense. We can expect to see more changes brought about by Internet technologies in the future. Like the transparency and efficiency issues I have mentioned before, can also be greatly improved by our technologies.

Let’s take a look at an example. One major change in the latest three years is that we used to have about 90% of donations coming from PCs, while now 90% are from mobile phones. This is a profound change. 80% that 90% are donation from social network. To put it into perspective, when there was a disaster in the past, we made donation in the B2C way, while today it has gone social. Now when a disaster occurs and a user notices it, the user will make a donation and send relevant information to his or her friends, asking them to make a donation as well. Such donation approach is trending in China, a new direction of social networking, mobility, technologies, and charity combined.

Also, the video you just saw is about the 9.9 Giving Day. This year we just had the second Giving Day. We hope to make 9.9 Giving Day a social event. During September 7th, 8th and 9th, we will launch a charity event with over 100 organizations with public fundraising right and their 4,000 well-selected projects. During this process we have also invested in almost ¥200 million, which might also bring up charity donation from other enterprises to ¥100 million.

This donation of ¥300 million will be allocated after we identify and match the projects. The result is good. If you only tell a user that you should fund this project, the user will tend to make a ¥1 donation while you also make one. Such match will make the user feel a sense of achievement. We have been doing this for two years and the outcome is great. The Giving Day we just had proved it.

Thirdly we have the legal issues, as well as regulations. In March this year China introduced the country’s very first charity law. As a NPC member I also participated in the discussion on making the regulations and rules. In the process I really felt that many of these regulations and rules will greatly improve the charity industry. Legal framework does make a difference. For example, in the past when you decided a property of your organization, private or public, then everything was set and you could not change it. But now private foundations can apply to become public. Another thing is that former rules were stiff. Organizations must spend 70% of the fund they raised last year. Now you can divide the fund into three parts for three years, which it’s more flexible. In this case, when you have an unstable

Another thing that many people really care about is the ratio of fundraising cost and management cost. In the past it was strictly controlled to 10%. I still remembered that at the NPC some argued to raise it to 15%, while some claimed it’s too high and that we can’t use 15% of the donation for management cost. Later it remains at 10% but the new change is that on special occasions organizations can apply for more. That’s something we didn’t have before until this year.

This is important because it’s just not possible for organizations of different scales to use a standard ratio. For example, for a large foundation with public fundraising right, 5% is already a lot while for a smaller foundation with much less funding, 30% would still be too little to maintain operation. In this case, flexibility is needed to enhance organizations’ capacity. Unfortunately we still couldn’t come up with a better solution. We couldn’t fix the salary issue since there’s a limit that the amount can’t be three times higher than the local consumption level. That’s why we can’t afford to have really good talents.

So enterprises need to set up a social responsibility department and a foundation. The enterprises can pay for hiring talents. At present we don’t have a thorough solution so we can only have this alternative. We have talked about this problem before, but given the conditions are far from mature and China’s charity scene, we can only take it slow, step by step.

Technology+Charity, what more can Tencent bring?

I just mentioned that we have applied many of our technologies in our charity projects. As a matter of fact, there are more possibilities. Giving money is not the only solution. Any project that does good for the public is charity. For instance, in the recent three years we always talk about the Internet and traditional industry, especially healthcare and education. Internet industry helps healthcare and education industry solve the imbalance issues.

For example, when patients in remote villages need to see a good doctor, Internet provides them with more means to have access to medical help. As for education, it’s pretty much the same. Remote education can reach more kids with Internet technology.

Also we have the example of transportation. If everyone owns and drives a car, then our roads will be jammed. Recently ride-sharing apps like Uber and DIDI have been emerging in the market, giving out an Internet way to meet commuting and transportation demand. In this way everybody is benefited, and the traffic has been relieved. Projects or businesses that can bring good to society, to individuals, are charity. Therefore we have been paying attention to integrating Internet, industries and charity. On this matter we have made quite a few endeavors.

On WeRun, for example, users can donate their steps after walking for 10,000 steps. Sponsors will then make a donation according to the donated steps to charity programs that the users want to support, such as 10,000 steps per 1 or 2 RMB. Besides that, users can also donate through voice messages or recordings. Some can even make a book recording for the blind. The voice we have, the steps we walk, can also be donated. We set to make charity more accessible.

With new technologies, we can do so much more. For instance, users can post important information of missing children to help out the search via QQ. Our project last year helped find 16 missing children. And our first-aid function on WeChat. If someone has a heart attack, how do I find nearby AED, or where I can find people who know to perform first-aid operation, where are the volunteers. With our technology, the user can simply press a button on the phone and receive an emergency call. He will be able to know your location and come over to help you. A few minutes do matter for emergencies like this.

This technology will definitely be of great importance in the future. At present, we are still planning for the project since abuse and harassing behaviors could also happen. It’s complicated, and we need time to make it better. I am sharing this with you to show you the possibilities.

The west has more experience in charity. They already have charity around for a century, and time does help accumulate useful experience and ideas. As for China, the country is only beginning to have charity. The industry is still growing from a baby. The technologies I just mentioned provided us a shortcut, but we also need solid backbones like ideas, philosophy and commercial knowledge to make it work well. So I also need to learn from you about charity.

I hope to experience charity process personally and learn from the process. But it also occurs to me that China falls short of talents in the charity field, especially those who really know all the process and procedures well. Such talents are just rare and hard to find. We had a few projects before, the foundations I just talked about, they had oriented programs to train talents. But it’s still quite a foreign idea to use the money from donation to train people. So the case in China is entrepreneurs give out money to train them. It’s oriented so it’s easier for people to accept it.

The donation from the public is used on special details of charity projects. On this matter, we found from previous discussion that the fund from their foundations mainly went to the roots of the problems instead of just infrastructures or hardware.

The money was put into solving problems like what causes the problems and how to fix it. So they train talents and hire experts to do research and come out with a good solution. The solution might be a bit better than previous ones, but small improvements also bring better or even completely different result. It’s like you pay to prevent something bad from happening is better than fixing the damage after something bad takes place. It’s more efficient. So we are still learning. In the beginning we didn’t understand it either. Because we also wanted immediate results, something we can see and feel immediately. But charity is complex. We need to learn from the west.

In China we have many foundations that are geared towards to the whole country. But I also learned that in the U.S. there is much more complex charity layout as they have charities for a certain community or region. We don’t see it in China that often. We don’t really see a foundation that dedicates to one city or an area. This is a big difference. But in China, more and more entrepreneurs are entering the charity industry through different organizations. We have learned a lot on charity. And different organizations also gain a more active interaction with each other with platforms and events like the 9.9 Giving Day.

For instance, some entrepreneurs that are master of Internet marketing or establishing charity products that are fitted for Chinese users can bring about stronger foundations. The foundations running behind will then learn from the leading ones. Then we can provide them with a tool box, giving them our insights and platforms and tools like WeChat etc. We make it more transparent. Then users will come donate again if they feel engaged and that the platform is transparent. Ultimately we will have a good circle. However, to achieve this we need to train talents first. Such thing just won’t come to us if we just sit around and do nothing. We need a platform where everybody can learn from each other and help each other out.

Q&A session

Q: Hi, I am from Wuhan College. I want to ask Pony(Ma Huateng)a question. You mentioned that you have created a concept, Internet+Education, in China for the healthcare and education industry. Can you share with us your vision for this concept? In the future, Chinese people will have higher education quality demand for all levels of education, from primary schools to colleges. So how can we use technologies and charity to achieve Internet+Education? For instance how do we bring education to kids in remote areas and help them get college education? Sorry, my questions are broad. Thank you for answering my questions.

Ma Huateng: This is complicated. In fact, the Wuhan College she is in is funded by Chen Yidan, one of Tencent’s founders. She is also persuading me and other founders to join her plan. We are indeed planning to follow up the project. She has made great contributions as a seasoned educator from Hong Kong that spent lots of time to build a school in mainland. It’s very hard. I believe she also has personal experience of using Internet+Education to solve some of the problems occurred.

The truth is there’s still a long way to go to make it take off. No matter how good our technologies are, there are still obstacles such as regulations and policies etc. that hold us back. At present there is no a simple way out. But still education is a vast idea. There’s standard education, and we also have language training education, professional skill education etc. We are also investing in Internet+Education technologies in different areas.

From my perspective, charity is a complex matter. It’s in fact a process of reallocation of social wealth and resources. This process involves many sides such as societies, governments, enterprises, and individuals etc., as well as aspects like concepts, talents and policies etc. In this case, it takes efforts from all walks of life in society to really push this industry forward. Thankyou!

…………………………………………………………………………………………………

(Like our Facebook page and follow us now on Twitter @tmtpostenglish, Medium @TMTpost and on Instagram @tmtpost_english.)

[The article is published and edited with authorization from the author @TMTpost, please note source and hyperlink when reproduce.]

Translated by Garrett Lee (Senior Translator at PAGE TO PAGE), working for TMTpost.