From the Desk of Guest Editor

Beyond Profits: Navigating the Social Stock Exchange Landscape

In an era marked by growing social and environmental consciousness, traditional financial markets are undergoing a transformation. A new concept “Social Stock Exchange (SSE)” aligned to CSR under the Companies Act, 2013 is introduced in India, which refers to a stock exchange that focuses on listing and trading securities of socially conscious and environmentally sustainable companies. It is an option for all NGOs like Prayas JAC Society, in India (not mandatory) to use this platform wherein they will be listed for trading under a regulatory framework with primary intent to unlock a new avenue for a large new capital pool to address funding gaps the sector suffers from.

It is with the objective to enable stronger identity and help build a greater recognition and appreciation for the sector that SEBI structured certain framework of regulations under its ambit to add further transparency, visibility and investor’s confidence. In a comprehensive report of over 72 pages, various details of regulatory framework, common minimum reporting, disclosure-based regulation, social impact reporting, governance structure of Non-profit organizations, self-reporting etc. have been highlighted.

The SSE could be availed as an instrument or means of fund-raising based on social intent and impact which would be measured through duly qualified and authorized “social auditors”. The instruments being proposed are Social Impact Funds like Development Impact instruments (DIBs), Zero Coupon Zero Principal (ZCZP) instruments, Mutual Funds connected to social impact etc. The NSE has introduced ZCZP instruments to raise funds from the companies on proposals linked to SDGs (Sustainable Development Goals) and agrees that to be covered under the CSR. Separate segments have been set up in the existing Stock Exchanges for the NPOs and SEs to facilitate the listing requirements.

Social stock exchanges have been started setting up globally. In India, Bengaluru-based SGBS Unnati Foundation (SUF), a non-profit organization, aims to raise ₹2 crore from high-net-worth individuals (HNIs) by being the first NGO to list on India’s Social Stock Exchange (SSE). The NGO will look at zero coupon instruments to attract investment from foundations and HNIs tilting towards social impact causes. A zero-coupon instruments is a debt security that does not pay interest periodically but instead trades at a deep discount to its face value, rendering a profit at maturity when the bond is redeemed for its total face value.

Ramesh Swamy charts new frontiers: SGBS Unnati’s SSE listing and beyond

In a groundbreaking achievement, SGBS Unnati Foundation (SUF) has etched its name in history as the first NGO to successfully register and list on India’s Social Stock Exchange (SSE). Spearheading this transformative initiative is Ramesh Swamy, the dedicated director of SUF. Swamy’s visionary leadership has not only paved the way for SUF’s landmark accomplishment but has also inspired numerous other NGOs to emulate this milestone by enlisting on the SSE. As the concept of a stock exchange tailored for NGOs and their benefactors is still nascent in India, Swamy shared his insights and aspirations in an exclusive interview with Karan Bhardwaj, Senior Editorial Associate, The Bridge India E- Magazine.

TBI :Could you share your experience as the first NGO to register on the SSE, and what challenges did you encounter during the process?

RS: The journey of becoming the inaugural NGO to register on India’s Social Stock Exchange (SSE) was initiated when the government opened registrations in October 2022. Given our NGO’s robust internal governance and commitment to transparency, we promptly commenced the paperwork, positioning ourselves among the first entities in the country to successfully register with both stock exchanges. While the initial norms and disclosures were relatively straightforward, the listing process proved to be intricate and demanding.

The listing requirements, encompassing numerous Memoranda of Understanding (MoUs), and documentation, presented a considerable challenge. The creation of the prospectus/ fund raising document, a minimum of 1CR ZCZP instrument, minimum Rs. 2 Lakh contribution from anyone without any tax benefit, several MOUs with various agencies, the ISIN registration added complexity to the entire process.

Our decision to pursue listing was reinforced by numerous meetings and support from donors who believed in fostering an ecosystem through SSE. Despite facing hurdles, we pressed on with the pro-bono assistance of Trilegal and Unitus. The realisation dawned that the listing of an NGO paralleled that of a corporate entity, sharing common rules and regulations. Navigating unchartered territory, we encountered challenges that necessitated constant interactions with exchanges, SEBI, and the Chartered Accounts Association to align procedures.

Amidst the evolving landscape, notable relaxations in rules occurred during our listing process, such as an extension of mandatory audits from six months to a year. This, in turn, has facilitated the journey for other NGOs, with information now more readily available in the public domain than it was during our initial undertaking.

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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.

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Financial philanthropy redefined: Hemant Gupta discusses SSEI’s impact on social finance

Introducing a new chapter in philanthropy and socially responsible investing, the Social Stock Exchange in India has emerged as a trailblazing platform where social impact meets financial investment. Leading this transformative initiative is Hemant Gupta, the Head of the Social Stock Exchange, BSE. In this illuminating interview, Gupta delves into the pivotal role of SSEI, outlining its immediate objectives and overarching vision. As a visionary leader, he discusses the significant shifts the SSEI seeks to instigate in the social sector, providing nonprofits with access to alternative capital sources and introducing innovative financial instruments. By Karan Bhardwaj, Senior Editorial Associate, The Bridge India, E-Magazine.

TBI: Being the head at SSEI, what is the immediate objective and vision for you?

HG : From a social perspective, the aim of the Social Stock Exchange is to provide nonprofits with easier access to funding sources. Currently, they face challenges in obtaining capital without significant effort. The vision is to enable them to utilise innovative financial instruments beyond traditional donations and grants. This includes hybrid blended finance instruments, allowing them to attract individuals seeking both financial and social returns.

For investors, the goal is to offer increased access to any NGO in the country, regardless of their location or past impact. Previously, retail investors had limited options, mainly through donations and grants. The Social Stock Exchange opens up alternative financing avenues for the social development sector.

Considering the broader ecosystem, there has been a predominant focus on Corporate Social Responsibility (CSR). However, the Social Stock Exchange aims to address the diversity of social finance in the country. The current emphasis on CSR donors is creating an imbalance, and the SSE seeks to establish a level playing field for fundraising. Investors will see a new segment called “social giving” on their broker terminals, allowing them to contribute regularly, making it a habitual part of their portfolio allocation, similar to buying equity or bonds.

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TBI: How do you intend to encourage participation from NGOs?

HG: We’re doing multiple things in this front. We are working both on the donor side as well as the NPO side in terms of building awareness, and showcasing them why SSE is the future of social giving in India. Thankfully, a lot of NGOs are now being run by professionals who recognise the value of capital markets, blended finance. They recognise the fact that if they want to scale, they have to go beyond what their network can achieve for them. And therefore, they understand the power of the stock exchange. What is happening coincidentally is both internationally and domestically, there’s a lot of focus on blended finance that has earlier been closeted into close circles. We are actually bringing that discussion out of those closed rooms out in the open so that more and more people can participate.

So it allows NGOs to tap into more innovative ways of financing their programmes. They can also include costs of admin, monitoring, reporting into the project cost, which help them do better quality work. We are getting ecosystem players that are actually bringing financial innovation into the social development system. This provides excitement to the NGOs because they see different avenues now through which they can do a lot of work.

TBI: Being at the chair, what are the challenges that you have encountered so far and how have you addressed them?

HG: I think by far the biggest challenge has been to battle the perception that the social stock exchange for an NGO is a fundraising platform, and not a stock exchange. There’s a big difference between the two.

Because oftentimes people approach the Social Stock Exchange, get themselves registered, and then are disappointed because it’s not fulfilling what they thought it would do, which is unfortunate. The second is that the stock exchange actually works on the basis of structured instruments, equity or fixed income, or bonds, which have their own architecture. They operate in a certain way. What we are trying to do is we are trying to ask NGOs to kind of force fit their programmes or initiative into a stock exchange structure, which sometimes is not possible. For example, fundraising today happens on a milestone basis but that’s much harder to do on a stock exchange. So as a result, the first few listings that are happening are actually 100 per cent upfront donation. But overtime, we will also have to adapt the stock exchange to cater to some of these uniqueness of the social development sector and fundraising that happens.

TBI: How do you think SSEs are beneficial for the donors?

HG: Typically, donors base their contributions on recommendations. The Social Stock Exchange (SSE) changes this by allowing donors to follow their passions rather than being restricted by geography. For example, if someone wants to support rhinoceros conservation in Kaziranga, they can explore relevant organizations on the SSE working toward this cause. Donors can review the organizations’ track records and choose the one they believe is making the most effective impact. Additionally, SSE enables donors to monitor the use of their funds, providing a level of transparency not possible with traditional donation methods. If donors can engage in blended finance instruments offered by SSE, combining both donation and investment aspects, they may be more inclined to contribute more significantly.

TBI: Where do you see standing of SSE in India vis-à-vis the world?
HG: Before India, some 13 other countries have tried experimenting with social stock exchanges. And when we were architecting this in 2019, we actually looked at the lessons, both successes and failures from other nations. And there were four things that we did differently based on the learnings. The most fundamentally was to integrate our social stock exchange into the national stock exchange, which was not the case in other nations. We, by design, have made this segment on the existing stock exchange, which means that it is subjected to the governance, the architecture, the fund flow, the processes that are time tested. Secondly, we allowed donations to come onto the stock exchange. We created an instrument with a fancy name called 0 Coupon 0 principal instrument, which is nothing but a donation or a grant. Thirdly, we set up Capacity Building Fund to create awareness among NGOs and donors about the social stock exchange, its possibilities and challenges. Then, in order to boost the investor’s confidence, we introduced a social auditor or social assessor who will issue certificate on the impact an NPO is creating. This will keep transparency on how the donation/investment is being utilised. Because of these four factors, I believe Indian social Stock exchange will be successful and will in fact set up an example for the rest of the world.

TBI: How does SSEI ensure that investors have access to accurate and comprehensive information about the social and environmental impact of the listed organisations?

HG: Currently, there is no globally comprehensive reporting on environmental and social impact. However, SSEI has taken an initial step in this direction by establishing social audit standards in India. These standards, endorsed by the Institutions of Chartered Accountant, Company Secretary, and Management Accountant, guide nonprofits in reporting their impact. These reports can be compared to evaluate the effectiveness of different organizations.

Also, transparency is also partly driven by what the market demands. As we get more and more sophisticated donors and investors on to the social stock exchange, there will be a demand for more comprehensive reporting. The standards currently in place are expected to evolve over time, becoming more comprehensive to meet the increasing demands of the market.

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NGO Registered with Social Stock Exchange

NGO Contact Person Email Phone Website
SGBS Unnati Foundation Ramesh Swamy 09844085864
Akhand Jyoti Foundation Saikat Mukherjee 08800452255
Children Love Castles Trust Nixon Joseph 09987708497

From Mission to Market: NGOs’ Odyssey with the Social Stock Exchange in India

The emergence of Social Stock Exchange in India has opened new doors for sustainable funding and impact measurement. NGOs share their transformative journeys with SSE, providing valuable insights into the challenges faced, expectations set, and the unfolding path ahead. By Karan Bhardwaj, Senior Editorial Associate, The Bridge India, E-magazine
Imagine a scenario where the pursuit of societal betterment aligns seamlessly with financial markets, where the noble goals of nonprofit organisations find resonance in the world of stocks and bonds. This is the promise of Social Stock Exchange, a groundbreaking concept that introduces a structured marketplace for impact-driven organisations to raise funds, enhance transparency, and attract a diverse range of investors.

In this evolving narrative, a few Indian NGOs take center stage. Their stories are not just individual sagas but emblematic of a broader shift in the paradigm of social financing.

Registering with the Stock Exchange

Akhand Jyoti Foundation’s decision to register with the Social Stock Exchange was driven by a need for credibility and a strategic avenue for fundraising. The foundation emphasises how the SSE scrutiny and social audit concept provide the much-needed credibility, instilling confidence in donors and creating a standardised platform to showcase success.
For Childrens Love Castles Trust (CLT), registering with the SSE was not only a funding strategy but also a step towards professionalism and transparency. By subjecting themselves to SSE’s due diligence, the NGO sought to enhance credibility and gain wider acceptance from donors. The move is seen as a commitment to transparency and adherence to stringent standards.

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Overcoming Financial and Positioning Challenges

NGOs identify limited funds, lack of a standardised scorecard, and the absence of a platform to showcase success as their major financial challenges. As a solution, the SSE offers a scrutinised platform that enhances credibility and positions them strategically in the competitive funding landscape. “While successfully implementing programmes in around 300 government schools annually, we face the challenge of raising substantial funds to scale up activities. The goal is to reach 1,000 government schools annually, requiring significant financial support. The SSE registration is seen as a strategic move to address this financial challenge,” says Nixon Joseph, CEO, CLT India.

Expectations and Impact

The impact of SSE registration on Akhand Jyoti has been profound. The foundation notes “a 2X growth in funding, enhanced credibility, and increased ease in opening doors to potential donors.” The annual renewal policy of the SSE adds an additional layer of accountability, ensuring compliance with standards and providing sustained credibility. CLT India’s registration with SSE has significantly increased its credibility and acceptance among donors. “Donors believe we have shown our intention to be transparent in our operations with the registration at SSE. As donors know that SSE is also monitoring our operations, they gain more confidence in dealing with us,” says Nixon Joseph, CEO, CLT India.

Strategic Consideration for Sustainable Growth

Even though there are just a handful of NGOs which have registered with the SSE, there are plenty which are contemplating to jump on the bandwagon as quickly as possible. For instance, Literacy India envisions leveraging the SSE platform for sustainable growth, expanded programme reach, and fostering innovative partnerships. Their focus remains on being a benchmark for impactful education and skill development. “We expect increased visibility, credibility, and access to a broader investor base. We hope the SSE evolves into a pivotal platform for social impact organisations, promising greater collaboration, increased investor interest, and a more structured framework for sustainable development initiatives,” Says Captain Indraani, Managing Trustee and CEO, Literacy India.

Future and Suggestions

Looking ahead, Akhand Jyoti plans a Zero Coupon Zero Principal (ZCZP) listing to raise funds for a key initiative. “There’s a need for NGOs to bring governance, processes, and transparency to their operations when considering SSE registration. Now, we are more informed in terms of compliances and the need of maintaining reports, and employees also understand the criticality of maintaining records,” says Saikat Mukherjee, Chairman, Akhandjyoti Foundation. Similarly, CLT India’s future plans involve launching Zero Coupon Zero Principal Bonds to raise funds for scaling up programmes. They too emphasise the importance of capacity building among NGO staff to understand SSE nuances and bonds.
As these NGOs continue their transformative journeys with the Social Stock Exchange, their experiences serve as guiding beacons for other organisations navigating the complex terrain of funding, transparency, and credibility. The SSE emerges not only as a financial platform but as a catalyst for professionalism, transparency, and strategic positioning in the philanthropic landscape.

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Development Happenings

By The Bridge India Correspondent


New Delhi, September 29: Fourteen exceptional innovators have been honoured with the prestigious 14th NCPEDP-Mphasis Universal Design Awards. The Awards are given to innovators who work to break barriers for the disabled and create an inclusive society for past 13 years. These awards acknowledge efforts of individuals and organisations dedicated to fostering accessibility and inclusivity in India through their innovative designs and inclusive projects.
The awards are conferred in three categories: persons with disabilities, working professionals, and companies/organizations that have made an impact in accessibility and Universal Design in areas such as built environment, transport infrastructure, service provision, ICT, consumer products, mobility aids, assistive technology, and more, “The 14 awardees for this year’s ceremony belong to eleven states across India, from Nagaland and Lakshadweep to Puducherry, underscoring the growing awareness and progress in the field of Universal Design and accessibility,” added Ali.

While giving away the Awards, Rajesh Aggarwal, Secretary, Department of Empowerment of Persons with Disabilities (DEPwD), Government of India complimented the awardees for doing incredible work in promoting the accessibility and supporting the role of assistive technology for creating a conducive ecosystem for persons with disability.


At the 54th session of the UNHuman Rights council at Geneva, Switzerland Team India Water Foundation presented the significant progress India has made in sectors of Water and sanitation, Education, Health, Infrastructure, gender disparity and Equitable international order where Dr. Arvind Kumar, President, India Water Foundation highlighted the responsibility of Global North as a historical polluter.

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