Open for Business
A social stock exchange is being blueprinted that will bring more money to NGOs and for-profit enterprises in development work Aavishkaar Group in conversation with Mumbai Mirror at the Sankalp Global Summit 2019
If you’ve always wanted to engage in some philanthropy but never knew whom to give to, or how, here’s the answer.
India may soon have a social stock exchange – a bourse for the social sector – where donors will be able to contribute to an NGO or a for-profit organisation of their choice that is ‘listed’ on the exchange. A 15-member working group, constituted under the Securities and Exchange Board of India (Sebi), which will regulate this social stock exchange, is currently putting together a blueprint for this. It is likely to submit its plans to both Sebi and the finance ministry for approval this month.
“Almost every Indian who has made money, wants to give back in some way or the other,” says Vineet Rai, founderchairman of the social enterprise Avishkaar, and a member of the working group. “The social stock exchange (SSE) would be a transparent and accountable way of doing this. The idea was proposed by Finance Minister Nirmala Sitharaman in the last Budget because there is a clear need for India to invest significantly more in its own development. Nonprofits have been doing good work for decades, but a new kind of ‘impact’ investing has led to the growth of forprofit social enterprises as well.” So based on guidelines drawn up by Sebi, both NGOs and forprofit organisations that operate in the social space can list themselves on the SSE. This will make it easier for potential donors to find and fund them; but it also brings a level of accountability to the work and finances of these organisations.
The working group, which was constituted in October, has been given the task of creating a framework that will help make the SSE a reality. It has had three meetings so far, and is now getting into the writing of the report, says Rai. Only five countries in the world — UK, Canada, Singapore, Brazil and South Africa – have anything like a social stock exchange. The working group plans to study them and perhaps borrow some best practises. The biggest benefit of the stock exchange is that it will bring more money to the development space.View full article