Only three out of 10 women in Hong Kong from underprivileged backgrounds are employed. Barriers to entering the workforce range from not having childcare, to a lack of self-esteem due to the grind of living in poverty.
To help women in this situation get back into work, Social Ventures Hong Kong (SVHK) launched a co-working factory called HATCH.
Francis Ngai, Founder and Chief Executive Officer of SVHK, explains that it converted a 5,000-square feet factory unit in Kwai Chung into a space in which products, such as bedding and handmade soap, could be manufactured.
It found six brands that were willing to move some of their production back to Hong Kong, sharing the costs of operating the facility and hiring women on a flexible basis.
The space includes a playroom, so that mothers can bring their children to work. Social workers also have lunch with the women once every two weeks, to help them address other problems they are facing in their lives.
While the project was first set up with a grant from SVHK, it has gone on to become financially self-sustaining.
HATCH is an example of what Ngai loves to do through SVHK, namely bring people from different sectors together to help solve social problems. “I like looking at how we can join the dots between different sectors. How we can build up collaborations and bring things together that have no relation to each other to make a difference,” he says.
Ngai founded SVHK nearly 15 years ago when his two children were aged one and two.
He explains that he felt society did not have enough new solutions to cope with all the old problems, such as housing issues, and challenges around an ageing society, but he wanted to show his children that you could keep striving to create change. “It was an important value that I wanted to communicate to my kids. I wanted them to be proud of their dad as a change-maker,” Ngai says.
He was head of strategy at PCCW Solutions at the time, and admits that giving up a well-paid corporate career to work in the charity sector raised eyebrows, but he says he was willing to sacrifice a lot for his children.
The concept of social enterprises was not well-known in Hong Kong at the time. Ngai first become interested in the idea after volunteering with non-governmental organizations (NGOs) and hearing professionals talk about social entrepreneurship and the concept of social investing. He explored the idea more, looking at social enterprises in other parts of the world and listening to experts speak on the topic, before founding SVHK in 2007.
The organization has two parts, which Ngai describes as being a dual engine. One arm is SVHK Foundation, which operates as a charitable arm, mobilizing grant money and doing non-profit work. The other arm is SVHK Capital, Hong Kong’s first venture philanthropy fund and advisory firm, which provides investment and professional services to support high-impact social ventures.
While the foundation is not-for-profit, the venture fund operates on a for-profit model, with the money generated through its investments and consultancy services used to support both arms of SVHK.
Alongside generating revenue, the consultancy business also aims to change the mindset of businesses. “If we can convince them that the dual model of making money while also creating purpose works, we can address many of the bad things that are happening,” Ngai explains.
He gives the example of Green Monday, which he co-founded to encourage people to have one meat-free day each week, as a social enterprise that also makes money.
As more people in Hong Kong became vegetarians or flexitarians, Green Monday opened a concept store, Green Common, selling plant-based meat alternatives. Most recently, it has signed a deal with McDonald’s to provide it with plant-based luncheon meat.
Aside from being Founder and Chief Executive Officer of Social Ventures Hong Kong, Francis Ngai is the Co-Founder of Green Monday.
“I try to apply corporate skills to social ventures. I want to blur the borders of the sectors and build a business solution around a social problem.”
A corporate perspective
Ngai started out in advertising and marketing, working for advertising and public relations agency Ogilvy, and health and beauty retailer A.S. Watson, before moving to PCCW Solutions.
He sees his corporate experience as being invaluable to what he is doing now. “I try to apply corporate skills to social ventures. I want to blur the borders of the sectors and build a business solution around a social problem,” he says. “In the past, we were more reliant on the non-profit model. It is good but it is not always sustainable. If we can introduce a business model, it can help social ventures to be more sustainable,” he explains.
An example of this approach is Diamond Cabs, which was set up by SVHK in 2011 to provide taxis that were accessible to wheelchair users. “Rather than just getting a grant from the government, we worked with the taxi industry because we wanted to have a wider impact. Now many taxi license holders have followed us and introduced bigger cabs.”
He points out that by introducing larger taxis, license holders have access to a new customer base.
Ngai spends much of his working day talking to people in businesses, family foundations and NGOs to help them understand more about the impact world, and to try to build bridges between different sectors and encourage them to work collaboratively together. “One of the things we have found over the past 15 years is that different sectors work in silos. We want to bridge those silos and show that doing social good isn’t just charity – it can fulfil business needs as well.”
He adds that having purpose is becoming increasingly important for corporates, with both investors and millennial employees increasingly looking for companies that do social good, and getting people involved in a social venture also helps individuals feel that they have a sense of purpose. “A lot of people in Hong Kong feel quite helpless and a lot of younger people do not have much hope. By getting them involved, we show them how they can have an impact, even in a small way, and it helps them to feel good.”
When deciding which ventures to invest in, SVHK uses an “IMPACT” model. Ngai explains that the “I” stands for innovation, adding that SVHK is looking for interventions that are not currently happening in Hong Kong. The “M” stands for market, as the ultimate aim is for social ventures to be self-sustaining, meaning there must be a market for their solution so that it can generate income. “P” stands for people and whether the entrepreneur or project owner shares the change-maker mindset, while “A” is for alignment and the entrepreneur’s ability to collaborate.
“C” stands for capacity. Ngai explains that even if someone has a good idea or business model, they must also have the capacity to be able to fulfil it. Finally, “T” stands for transformation, as SVHK is looking for solutions that can create a paradigm shift in the way social issues are tackled.
Ng gives the example of Light Be, which was the first affordable housing initiative in Hong Kong, connecting landlords of underutilized properties with families who needed housing. The scheme has 130 apartments, in which families have their own sleeping space but share a kitchen and bathroom with other families. They are charged an affordable rent.
It is aimed at families who have been living in sub-divided units, to help them get back on their feet. They can stay in the housing for a maximum of three years, although the average family spends just two years there. “We believe that poverty should have an exit. Monetary or housing welfare support is good, but sometimes that builds reliance among grassroot families which, in a way, will disempower them,” Ngai says.
He adds that only 20 percent of families that leave Light Be housing go into public housing, with the majority going into private housing having found a better paid job. In 2016, Light Be partnered with the government to convert an abandoned textile factory in Sham Tseng into housing for underprivileged families. The initiative was featured in the Hong Kong Chief Executive’s 2017 Policy Address.
It also recently started a collaboration with real estate developer New World Development to convert agricultural land in the New Territories into social housing. “It has helped to change housing policies. There are now 10 NGOs offering affordable housing in Hong Kong,” Ngai says.
Before establishing SVHK in 2007, Ngai was the head of strategy of PCCW Solutions. Prior to that, he worked for advertising and public relations agency Ogilvy, and health and beauty retailer A.S. Watson.
“Thinking deeply about an organization and incorporating purpose is good for both a corporation and society.”
Pandemic-driven business model
Unsurprisingly, COVID-19 has had a significant impact on social ventures, many of which have not been able to hold their regular fundraising events due to social distancing measures.
Despite the challenges it has created, Ngai says it has helped them to build different business models and become more resilient.
He thinks the pandemic has also highlighted the need for society to change, and has increased the interest of both consumers and investors in corporate purpose. He adds that the impact of COVID-19, as well as the social unrest Hong Kong suffered before the pandemic, has made him rethink what SVHK is doing. “A lot of things are reshaping the city and we need to cope with a new situation, so we are adopting a new impact model. I feel very excited about it.”
The new model is called 2030 New Urban and puts an emphasis on changing people’s mindsets to create an impact ecosystem to transform Hong Kong to a place where there is meaningful youth engagement, sustainable living and a community economy.
Ngai wants to bring people with a change-maker mindset together to collaborate, share learnings and influence people in different sectors. He dubs it an “impact of things.”
“They would not just be people who were quitting their jobs to become social entrepreneurs, they could be ‘intrapreneurs’ working in corporates, or policymakers who are up-and-coming stars in government, or a non-profit leader or the CEO of a big organization. Imagine if that group of people got together, and the effect it could have rippling out.”
Ngai sees it as a 10-year impact journey and has called it an “odyssey” after the Greek epic.
He thinks accountants have a significant role to play in helping to bring about the new urban transformation. “Accountants operate across all sectors and industries. They can show that running a business with purpose is important not only to the future, but also to engage employees, different stakeholders and investors,” Ngai explains.
He adds that accountants can also persuade businesses of the need to incorporate purpose proactively now, rather than waiting until investors are demanding it, while they can also demonstrate that there is a middle way under which businesses can still make money but also carry out social good. “Donating money to charity or doing voluntary work is a quick win, but it is not enough to instil purpose into a business. Thinking deeply about an organization and incorporating purpose is good for both a corporation and society.”
A social runner
In his spare time, Ngai is a keen long-distance runner, taking part in marathons and ultra-marathons, including the recent Hong Kong Marathon. “Running is not just a hobby for me, it is something that keeps my mission and passion alive. If I encounter a difficult problem, I go running. If I find a solution and feel happy, I go running. It keeps my energy up.”
A few years ago, he took part in a marathon at the North Pole as part of a corporate event to raise awareness about Green Monday. “The temperature was minus 30 celsius. You had to go inside to drink water because if you took water outside it would be frozen solid in minutes. Frostbite was also a danger, and I lost some feeling in my fingertips. I am afraid of the cold, so it was really challenging for me.”
Despite these challenges, Ngai came first out of the team from Hong Kong, generating a lot of media coverage for his cause.
Ngai likens running to his journey in social innovation. “Both running and my journey are reflective. I may feel pain, but I learn from it and go on to have inspiration.”
Francis Ngai was a panellist at the Institute’s CPA Conference 2021 this month, discussing business lessons from the COVID-19 pandemic. Read more about the panel discussion and the conference here.