Wang Bing is a man with plans. When he became one of China’s first generation of securities brokers after graduating from college in the early 1990s, he decided to spend the next 12 years making enough money so that he wouldn’t have financial worries for the rest of his life. Then he had even bigger plans: Spending the next 15 years on charity work and the following 15 years pursuing personal hobbies.
　　Wang’s three-phase life plan has been soundly implemented so far. He set up his own company engaged in venture capital and private equity investment in 2000. The company has successfully invested in Sina, Tencent, Alibaba and Focus Media, and these companies have grown to become China’s leading Internet companies. Wang told the China Entrepreneur magazine that he has the acumen to tell a good company from a bad one. Wang’s company still holds Sina stocks purchased at HK$30 ($3.86) per share 10 years ago, which are now valued at HK$200 ($25.76) per share.
　　Excellent returns from Wang’s investment has given the self-made multi-millionaire the financial freedom he long dreamed of as well as the confidence to put his business savvy to use furthering good causes. I
　　n 2004, at the age of 36, Wang established the Ai You Foundation in Beijing to provide better medical care for needy children from disadvantaged families. The foundation embarked on its first mission to sponsor surgeries and rehabilitate children with congenital heart diseases in 2006.
　　Congenital heart disease is a defect in the structure of the heart and major blood vessels, which is present at birth. Many types of heart defects exist, most of which either obstruct blood flow in the heart or vessels near it, or cause blood to flow through the heart in an abnormal pattern. They could result in premature deaths often before the affected children turn 3.
　　More than 300,000 children are born each year with congenital heart diseases on the Chinese mainland. However, not all of them have access to medical treatment. Most of China’s medical institutions that are able to perform surgery treating congenital heart diseases are located in large cities. A large number of sick children born to underprivileged rural families miss the best time for treatment.
　　Congenital heart diseases have caused great suffering for a large number of families in China. However, that was not the only reason Wang chose to initially support this particular group of children. His second motivation was the fact that his action plan could be replicated.
　　Shortly after establishing his foundation, Wang decided on three criteria of how to select charitable causes to focus on: Every case must be replicable, relatively low in overheads and have measureable effects. Ai You once considered aiding children orphaned by HIV/AIDS and the treatment of deaf children, which were both given up due to the vast differences between cases.
　　When the Ministry of Civil Affairs approached Wang with a program to aid children with congenital heart diseases, he realized this was exactly what his team had been looking for. Surgeries to treat congenital heart diseases are well-established, which means most children can be cured and the cost of each case tends to be broadly similar.
　　Ai You has signed contracts with 36 medical institutions around China, which are entrusted with conducting surgeries on children supported by the foundation as well as receiving applications for financial aid from their patients. The contracts between Wang’s foundation and medical institutions clearly define the rights and responsibilities of both parties and the standards on selecting applicants. “The contract is a commercial one serving charitable purposes,” Wang said.
　　Since 2006, the foundation has raised more than 200 million yuan ($31.7 million). By the end of March, 13,015 children had received surgeries sponsored by Ai You. The foundation paid all expenses that were not reimbursable by medical insurance for rural families and a proportion of the out-of-pocket expenses for urban families, depending on how dire the family’s financial situation was.
　　The number of surgeries performed with the foundation’s funding has given Ai You bargaining leverage when dealing with its partner hospitals. In 2009, the foundation set price caps on the treatment of 18 congenital heart diseases and also required hospitals to give a package price for treating each child beforehand, covering all the procedures from blood tests to postoperation medication.
　　The foundation has developed an online database, which records the status of each aid recipient, from application to hospitalization to the completion of surgery. By logging into this platform, every donor can also check the information and status of the children they sponsored. After a surgery is performed, the foundation will directly send the money to the concerned hospital’s account so that the family won’t misuse the aid for other purposes.
　　Copying the procedures it had established for supporting children with heart defects, Ai You set up a similar program for leukemia-affected children from impoverished families last May, which has benefited nearly 200 children.
　　The foundation is also setting up a rehabilitation center in Shanghai for orphans receiving birth defect surgeries, where they can receive high-quality post-operation care until they recover fully and are physically qualified to return to their orphanages. This program has received 1.5 million yuan ($238,000) in financial aid from the Central Government.
　　Wang recruited the foundation’s board directors and donors mainly from his CEO friends. Different from other charitable organizations, the administrative and operational expenses of Ai You do not come from donations, but are separately funded by Wang and some foundation board directors. The founda- tion has outsourced its accounting services to an accounting firm. Since its establishment, the figures under investment, total liabilities, administrative costs, financing costs, staff wages and benefits and administrative office expenses on the foundation’s annual reports have always been zero.
　　Wang said that such a design is to al- low donors to the foundation to clearly see where their money goes and how many lives they have helped save. “This arrangement introduces unprecedented transparency in the operation of a charitable organization. As the package price of one surgery is usually around 20,000 yuan ($3,175), donating 1 million yuan ($158,730) equals saving 50 children. The math is as simple as this,” Wang said.
　　According to Wang, a large part of his foundation’s value comes from its innovative combination of commercial acumen and charity work. “I regard myself as a social investor, who has introduced a corporate governance structure to a charitable organization. I am creating a model I believe is replicable by other people enthusiastic about charitable causes,” Wang said.
　　Despite being a veteran investor, Wang has refused to invest the balance on the foundation’s account. “People might question why you invest in this project instead of that one. For the time being, transparency and credibility are of the utmost importance to charitable organizations in China,” Wang said.
　　Last June, the Red Cross Society of China came under fire after a 20-year-old micro-blogger claimed to be the general manager of Red Cross Commerce and flaunted wealth by posting photos of her extravagant lifestyle. As a result of the credibility scandal, donations to charities have plunged nationwide.
　　While Ai You’s operational model is extremely innovative it has been questioned by some people working for charitable NGOs. Gao Guangshen, Vice Secretary General of the Sun Culture Foundation, a Hong Kong-based NGO dedicated to education and poverty relief initiatives, told The Economic Observer, a Beijing-based business weekly, that excessive emphasis on zero operational costs tends to mislead the public into believing that charitable organizations shouldn’t need any operational costs, which could hinder the survival of a large number of small NGOs in China.
　　Wang also admitted that his foundation wouldn’t operate with “zero costs” forever. He said he is waiting for the day when the general public has a better understanding and deeper trust in charitable organizations and less doubt about the use of their donations and those working for charitable organizations become more professional.
　　Wang believes that it will be 10 to 20 years before the general environment for charitable causes in China becomes mature.“Until then, it is only natural that there will different opinions over how charitable organizations should be run,” Wang said.