SA’s social investment exchange

In June 2006, South Africa launched a different kind of “stock exchange” – at the time only the second of its kind in the world – to facilitate investment in selected social investment projects.

The South African Social Investment Exchange (Sasix) gives philanthropists a centralised way of keeping track of how effectively their donations are being used.

Go to the Sasix website Sasix opened with an initial offering of 16 selected “social profit” projects available to the public as investment opportunities with a social return in the form of improving lives.

By February 2007, the exchange had attracted some R2.4-million for its projects, which had grown in number to 31 – twenty of them fully funded.

“Unlike other ‘do-good’ efforts, these carefully chosen projects have been scrutinised as thoroughly as any company listing on a formal stock exchange,” Sasix said at its launch.

“Budgets, project plans and expected outcomes have been assessed in an intensive due diligence process and the expected results carefully analysed. In this way, the returns that accrue to society, while not of a financial nature, can be measured by the way the completed project actually changes people’s lives.”

The first such “stock exchange” was the Social Stock Exchange launched by Brazil’s Bovespa stock exchange in 2003.

Sasix is an initiative of the Greater Good South Africa Trust, with support from Noah Financial Innovation’s Broking for Good Foundation.

Towards a dynamic ‘social capital market’
“As is the case elsewhere in the world, South Africa’s current social capital market is not particularly dynamic,” Greater Good South Africa founder Tamzin Ractliffe said at Sasix’s launch.

“People tend to support what they know best, which typically means the better known ‘charity’ brands, even though there are so many other non-profit organisations doing great work and being extremely worthy of support.

“We hope to make these organisations, many of whom are providing innovative solutions to social problems, more visible, facilitating their access to a responsive, dynamic social capital market that sees social capital flowing to exceptional social investments that demonstrate their social profit.”

“Social shares” in Sasix projects cost R50 each, with projects falling into the fields of early childhood education and development; orphans and vulnerable children; food security; enterprise development; basic healthcare; environment and conservation; and animal protection.

A prospectus is printed quarterly and detailed project proposal profile documents are available on the Sasix website.

Investors – who can choose to invest in one project or a portfolio of projects – can purchase shares online or through the offices of the Greater Good South Africa Trust.

Performance-based investments
If, for instance, a non-profit organisation needs to raise R75 000 for a particular purpose, 1 500 shares costing R50 each will be allocated, Sasix explains on its website. “Once the entire allocation has been taken up, the project is closed to further investment and the work is implemented.”

At the end of the “social investment cycle”, Greater Good South Africa provides a project performance report that includes an analysis of the achieved outcomes versus the forecast, as well as an assessment of the lessons learned.

“Sasix is unique in that all its investors are able to choose discrete, time-bound and performance-based investments in projects that are meaningful and tangible to them,” says Ractliffe.

“The provision of clear, accurate and concise information, before and after, means that they know exactly how their investment will be used, and exactly what kind of social impact, social profit, their investment generates.”

From ‘non-profit’ to ‘social profit’
“The concept of a social investment ‘stock exchange’ represents a shift in thinking that moves beyond the idea of charity, or of corporate social responsibility as a means whereby businesses ‘pay something back’, to a 21st century idea of committed investment in accountable development projects that yield measurable achievements, specifically a ‘social profit’ that can be measured by how lives have changed for the better.

It is with this in mind that Ractliffe suggests that non-profit organisations are better described as “social profit” organisations.

“‘Non-profit’ is negative in the sense that it implies no value. In reality, non-profit organisations do, can and should deliver significant value to society.

“The impact of the words ‘non-profit’ is that it can lead to low expectations all round,” says Ractliffe. “A business doesn’t necessarily expect decisive and measurable results from its corporate social investment as long as they are ‘doing good work’, and the non-profit organisation can succumb to this low level of expectation and not be accountable for delivering on its social mission.

“The concept of a social profit organisation demands far greater performance and accountability.”

SouthAfrica.info reporter

Article last updated: April 2007

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