Nonprofit startups brings a unique spin to the social sector. It carries the ethical assumption that good morals and values goes beyond their bottom line to achieve a positive social change. A social enterprise motivating factor is not only about generating profit for sharholders, but how their ethical framework affects the way a social issue is being addressed. Wokai is a nonprofit micro-finance organization.
The Wokai foundation uses microfinance to focus on alleviating poverty and economic development in rural China. Muhammad Yunus, a Bangladeshi Economist and Nobel Peace prize recipient, was the first to develop micro-finance. Micro-finance is the process of lending money to entrepreneurs. Through micro-finance, Wokai enabled the middle person in China. This is groundbreaking considering the roadblocks a group of people face being under the poverty line. China is dominated by (SOEs) state owned enterprises, and a developing private sector, made-up of businesses with high level of corruption. Wokai goes out the rural villages, provide training and support, in order for the entrepreneurs to start small businesses.
Wokai is an NGO located in California with its core operations in Beijing, China, supported by individual donors, corporate sponsors, fundraising events, and grants. Founded in 2007, by Casey Wilson and Courtney McColgan after they met at Tsinghua University in Beijing, Wokai has a leadership team of 5 Board of Directors and an Investment Committee in addition to its 16 Chapters of volunteer representatives in Beijing, Boston, Hong Kong, Los Angeles, Nanjing, New York, San Francisco, Seattle, Shanghai, Toronto and Washington, D.C., London, Singapore, Bristol, Dallas and Atlanta.
Wokai maintains a fellowship program called “Wokai Fellows” which allows individuals to work directly with field partners in rural China. From their website, Wokai features updates from the field, by their “Wokai Fellows”, the profiles of volunteers from around the world, personal glimpses of rural Chinese life, and commentary about current developments in rural China and the micro-finance sector. Wokai partners includes the Association for Rural Development of Yilong County (ARDY), which is based in Sichuan, and Chifeng Zhaowuda Women’s Sustainable Development Association (CZWSDA), in Chifeng, Inner Mongolia.
But the reason why Wokai failed is due to many regulatory roadblocks in China that made working space difficult. The main regulatory roadblock for NGO-MFIs is that they have never been given legal status as financial institutions. Due to a top down hierarchical culture, it is difficult for Chinese nonprofits to become legitimized and legally recognized entities. MFIs are legally prohibited to access debt or equity investments in China. As of May 1, 2012, Wokai is no longer in business. And no one has answered the founder letter to take over the organization as the new CEO.