Many social organizations in China display phenomena of organizational rigidity and lack of vitality. In terms of objective measures, this is because the organizations have institutional constraints, which prevent them from distributing profits. Subjectively it is because there is a long-term lack of effective management strategies. Organizational spin-offs have been considered an effective remedy for organizations which are underperforming or experiencing existential crisis, as they can activate employees from within and are expected to be the key to breaking the rigidity deadlock. Based on the spin-off theory and organizational incentive theory, a ″reward-behavior″ analytical framework can be formed, and this can be used to reveal the driving mechanism of social organizations from deadlock to spin-off and provide new explanations for social organizations in China to take root in society, provide services and effectively maintain organizational vitality. Taking the ″ENCIFANG″ as a case study object, this paper provides a theoretical coding and analysis of its organizational spin-off process from 2013 to 2018. When the development encounters scale bottlenecks, ″ENCIFANG″ activates the spin-off strategy, uniformly flattens, miniaturizes, and activates employees, providing a solution for the organization to break through the rigidity dead lock. The findings are as follows: First, organizational spin-offs are a managerial change that triggers a change in the human resource management system, including the distribution mechanism, and this generates a series of service innovations and freedom from organizational rigidity by activating the whole social organization. Second, after undergoing organizational spin-offs, social organizations are able to achieve all-round improvement in organizational structure, business model, employee motivation, resource utilization and organizational development; and organizational vitality is significantly enhanced. Third, the internal mechanism of performance-improvement of social organizations innovates the human resource management mechanism, and the three-dimensional incentive levels of external, internal and social motivations are enhanced, forming efficiency-oriented, professional-oriented and service-oriented behaviors. The theoretical contributions of this paper are: First, previous research has only studied the spin-off process from the organizational dimension; this paper reveals the internal mechanism model of organizational spin-offs, and finds that the management change triggered by social organizational spin-offs has unclogged the distribution mechanism, innovated the thinking concept, enhanced the service consciousness, and activated a significant ″incentive-behavior″ mechanism. The research helps to reveal the internal mechanisms of post-spin-off organizational performance enhancement at a micro level. Second, much of the previous research has focused on the corporate sector. There are few analytical frameworks that are applicable to social organizations. This paper introduces an important element of social organization, decoding the process pattern of organizational spin-offs in a specific context, and developing the theory of organizational spin-offs in the context of social organizations. Third, this paper follows the framework of ″reward-behavior″ analysis, revealing the dominant role of external, internal, and social rewards. Based on the findings of the study, this paper proposes countermeasures with a view to improving the level of internal governance of social organizations. First, social organizations should design a reasonable incentive system, and can introduce the theory of organizational spin-offs and incentive theory, so that employees can develop efficient, professional and service-oriented behavior. Second, social organizations in rigidity deadlock can adopt organizational spin-offs to make the organizational structure sink, give full play to the subjective motivation of employees, and upgrade social organizations. Third, social organizations, as the third sector, in the process of participation in government purchasing of services, easily breed dependency tendencies. The government should pay attention to internal capacity-building of social organizations and stimulate the endogenous drive for their innovative development.