Let’s Establish a Social Stock Exchange

This is an idea that has been kicked around for a while and improves with each kick. If it is ever to get off the ground now is the time, with historically low interest rates making the real stock exchange a pretty unattractive bet and with social impact assessment coming of age, the returns for those on the path of the angels are demonstrably higher than ever.

So, what on earth is the social stock exchange? Put simply it is a way of getting a return on investment either of a social nature or a financial return based on the financial impact of investment on fundraising. To be sure, investment in fundraising has one of the highest returns possible these days and we all know how much we need direct investment in fundraising to transition from our steadily fading direct mail etc. based recruitment programmes.

Such investment could also allow us to scale up the most effective strategies, models and techniques, as well as spreading them throughout the sector and indeed the world. Rather like the way that face-to-face became almost universally adopted, but far quicker and on a scale that would be more cost effective than everyone going through the tiring internal process of pleading for small amounts of extra funding.

The possibilities have not gone unnoticed by governments, and at the G8 meeting in June 2013, the G8 Social Impact Investment Taskforce was launched to catalyse the global development of the social impact investment market. So far this has made slow progress as far as I can see, but if it is coupled to a ‘social’ stock exchange so that people can invest directly in fundraising and seek both a return on capital and also see serious social impact then we would have a viable mechanism for supplying the investment demand and the social purpose requirement many of us would like to see for our financial investments.

The social stock exchange could be backed by a block-chain so each transaction is certified and cannot be hacked or denied. That would give a marketplace not only for buying shares in say, Oxfam’s or Save the Children’s international fundraising programme, but a place where these shares or ‘social impact’ bonds could be traded. Perhaps CAF, which was always an innovative organisation, could develop a social enterprise or CIC to set this up, or someone innovative at ACEVO or even the Institute of Fundraising might float the idea to government or a wealthy social entrepreneur.

Do spread this blog and let’s see who picks up the idea…

John Baguley, CEO, IFC