TBI:How do you see the future of Social Stock Exchanges (SSEs)?
RS: Thinking about the future of SSEs, I believe it’s crucial for everyone involved—donors, NGOs, and the government—to learn and grow together. Right now, many NGOs are asking questions like, “Why should we do this? Can SSE really help us get funds for our projects? Who’s in charge of marketing our projects: SSE, SEBI, or us? Do we need to ask our current donors for money, considering the high paperwork costs?” These are common concerns. Even though SSE’s impact might not be huge today, I think it’s a forward-looking initiative. It’s like looking at how mutual funds started. Not many people were into them five years ago, but now they’re a big deal. Those who got in early had an advantage.
For NGOs to thrive, they need to focus on three things: being clear about what they’re doing (transparency), having good internal systems (governance), and making a real impact in the community (social impact). These aspects make an NGO stand out.
Looking ahead, joining SSE is becoming necessary for NGOs. SSE is going to change and grow in a big way. Imagine if, in the future, the government only considers CSR for NGOs listed on the stock exchange. These listed NGOs would have clear transparency in their social impact, approved audits, and all information out in the open. The challenges and costs we face today will likely pay off in the future.
TBI: Why is NGO Unnati aiming to raise Rs 2 crore through listing on the SSE, and what is the vision behind this capital goal?
RS: This financial initiative aligns closely with the organisation’s broader vision and mission. Unnati runs two primary programmes. The first, the Center Model, has been operational for 20 years, providing a 35-day training to youth at its 40 centers, ultimately leading to corporate job placements. The second programme, UNXT, is a 4-year-old initiative targeted at final-year students in government colleges in rural areas nationwide. Priced at a reasonable Rs 2,000, the programme offers 165 hours of training, including blended learning and in-house training of 90 hours, with job promises for participants who reach out after graduation. Last year, UNXT impacted around 24,000 youth, with a goal of reaching 1 lakh youth in the current fiscal year (April 2023-March 2024). Infosys Foundation plays a pivotal role in supporting Unnati’s mission, with MoUs established with 10 states, including Madhya Pradesh, Uttar Pradesh, Andhra Pradesh, Karnataka, Kerala, Arunachal Pradesh, and Nagaland.
The fundraising target of Rs 2 crore specifically aims to benefit 10,000 youths, constituting only 10 percent of Unnati’s overall impact. The remaining 90,000 youths will continue to be covered, underlining our commitment to expanding reach and making a substantial difference in the lives of young individuals.
TBI: Can you tell us about the support from The Infosys Foundation?
RS: The influential support from Infosys Foundation has been instrumental in scaling up this project through strategic collaborations with various states. They have made a tremendous contribution to UNXT. The financial support is vital, but equally important if not more so, is the credibility that the Foundation gave to Unnati, and the vision to use digital technology as part of the program design. The Foundation gave us the license to let our imaginations be the limit of our design and they gave us the support and confidence to turn our imaginations into reality.
TBI: How do you see the benefits of SSEs for investors?
RS: As a social entrepreneur for over two decades, I’ve noticed that when I approach investors to present our projects, their main concerns revolve around credibility and transparency. They often question, “Your industry is risky, and many organisations are not trustworthy. Why should I trust you? How can I be sure you’re making a real impact and not exaggerating?”
I believe that being listed on the stock exchange can address a lot of these concerns. It signals to donors that the organisation has already undergone vetting, is regulated, and can be trusted. However, it’s important to note that the concept of a social stock exchange is not widely known yet. So, there’s a need for focus on capacity building, not just for NGOs but also for donor management. With the right education, investors and donors can become better informed, and that’s when we’ll start seeing the benefits in the future.
TBI: How do you perceive the position of SSE in India compared to the global scenario?
RS: Seven countries attempted to establish social stock exchanges, but unfortunately, four of them had to shut down. The reasons ranged from a lack of awareness to a flawed platform concept. In those cases, the focus was on creating a listing platform without emphasizing credibility. They didn’t integrate SSE into the mainstream as part of the commercial stock exchange, and they didn’t apply the rules of a commercial stock exchange to SSE.
India’s approach is distinct because SSE is integrated into the commercial stock exchange. All the rules that apply to a commercial company also apply to NGOs, with a few exemptions.
There are areas that can be explored further, such as huge tax exemptions for donors, relaxation for CSR organisations to conduct audits for contributions made through the exchange as the financial and social impact audits have already been done by the exchanges. There’s a need to create awareness among citizens about SSE and build a transparent system for social good in the country.