The Impact Post by NuSocia | Social Stock Exchange
Issue# 3 | Tue, Aug 4, 2020
Dear NuSocia Patron,
These are unusual times. To succeed in such times, innovative approaches take centre stage. As your knowledge partner, we at NuSocia are committed to bringing to you the most relevant and topical knowledge which keeps you ahead of the curve. This 3rd edition of The Impact Post is dedicated to Social Stock Exchange - a radical and innovative step, which has the power to bring transformative changes in the Indian Social Sector.
Whether the exchange would be a success - only time can tell but you cannot change the world unless you become part of changing it. One of the first ways to be part of this change is to remain well informed. Nelson Mandela has said, "Education is the most powerful weapon which you can use to change the world". In this edition of your newsletter, we have curated and brought to you some exciting blogs covering various dimensions of the Social Stock Exchange. Our Expert Speak section brings to you views from NuSocia CEO, who has had the experience of different sides of the social impact world. Finally, the webinar video presented brings together a comprehensive set of views from industry and sector experts including some of those who were part of the drafting committee of the social stock exchange recommendations.
We hope that you find this edition useful in your own quest to understand and leverage the Social Stock Exchange. We are also eager to hear back from you, if you are finding our newsletters useful.
Happy Reading!
Readings : Food for Thought
We have carefully curated a selection of reading list for you to get an in-depth idea of the Social Stock Exchange.
1. Social Stock Exchange Simplified: Read this to understand the basics of the Social Stock Exchange. The blog takes you through various global SSE models from where the inspiration can be drawn. It also walks through the sharply defined time plan in which Indian SSE was presented in budget speech last year, how the working group was formed and what are some of their key recommendations. The writeup also captures the implications of SSE for various key stakeholders. Go ahead and demystify the SSE world.
Read Now (6 Min Read)
2. Will Social Stock Exchanges meet the Expectation Challenge? : A thought-provoking piece which brings together views from industry experts from across the globe. The article talks about the potential risks with Social Finance, the expectations that different sectors have from SSE, the innovative financial instruments and what needs to be taken care of. The blog, which is a curation of NuSocia knowledge hub, ends by setting the path ahead. A must-read, to align your expectations.
Read Now (10 Min Read)
3. The Advent of Social Stock Exchange in India : The blog takes a deep dive into various financial instruments which the SSE offer to NPOs and to FPEs and also bring in the aspect of how SSE should be looked at especially considering the Covid effect. The piece also talks about integration aspects of CSR and SSE and how does the enabling ecosystem pieces fit in.
Read Now (5 Min Read)
Expert Speaks
For understanding the aspects of Social Stock Exchange we were looking for expert opinion of someone who has worked across the NPOs, Social Enterprises as well as Impact investment side. We spoke to Manju Menon, CEO, NuSocia who has spent her fifteen plus years of career spanning all above domains, has been an IDEX Global Fellow in Social Entrepreneurship and is also pursuing her Ph.D. at TISS in Social Entrepreneurship Department.
What are your views on Social Stock Exchange as a concept or idea?
Social Stock exchange as a concept is not entirely new. Several countries like Canada, Singapore, South Africa have tried this in varying forms. But in the context of India which has a wide social impact domain in India with lakhs of NGOs and an increasing number of Social Enterprises, it is definitely an idea worth exploring. I would look at it as a good intentioned concept that aims at a) Bringing more funds/resources into the hands of those who are creating social impact; b) Do it transparently and c) Bringing some level of standardization in measurement of social impact.
The committee constituted by SEBI has recently submitted its recommendations and is currently in process of gathering larger public opinion on the recommendations. They have taken quite a holistic approach towards the overall development of the social sector, and so its recommendations cover a broad range of areas. I hope more and more organizations working in the domain provide their feedback to the committee, before the draft moves to become an act.
What do you think would be the scale and kind of impact it would have on the social sector.
If we look at the impact of various similar exchange across the world as a benchmark, there is limited evidence especially their ability to meaningfully transform social outcomes.
The challenge with such exchange is that if the entry barriers are kept high in terms of stringent compliances, the participation in the SSE would be limited to a select few (especially in short term) which are anyways able to attract funding. If the entry barriers are kept too loose, it might not instill confidence among investors therefore it is difficult to predict the impact of SSE on the social sector and whether it would make any concrete difference soon.
However, with my optimism bias, I am hopeful that if it doesn’t meet the goals in its entirety, the process would help bring in much needed transparency, governance and impact measurement focus in social space. At NuSocia, we are geared up to support the NPOs / SEs with necessary impact measurement services as well as compliance readiness through our partnerships with leading regulatory, certification and financial risk management firms.
Social Stock Exchange for NPOs
The Centre for Social Impact and Philanthropy (CSIP) and Omidyar Network India hosted a discussion on the Social Stock Exchange working group's recent report and how this concept could provide additional funding opportunities for India's nonprofits.
As the SSE starts taking shape, we will keep updating our insights. Do follow NuSocia on Social media / NuSocia Blogs for the same. If you want to get additional people in your network to receive the newsletter going forward, please do share their contact details with us. Your privacy and patronage, both are important to us!