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Opinion | A guide to the proposed social stock exchange for NGOs

3rd July 2020
Opinion | A guide to the proposed social stock exchange for NGOs
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Photo credit: Reuters

By Roopa Kudva

Recently, a committee constituted by the Securities and Exchange Board of India (Sebi) submitted its recommendations on the creation of a social stock exchange (SSE). It will soon become clear which of these are accepted by Sebi and the relevant ministries of the government.

The committee hoped to do more than create a matchmaking platform for donors and non-profit and non-governmental organizations (NGOs). It took a holistic approach towards the overall development of the social sector, and so its recommendations cover a broad range of areas.

At the outset, it is important to highlight that the recommendations do not affect the current ways that NGOs work, nor their existing avenues of fund-raising. They relate to additional instruments and means for raising funds. These can also help improve the visibility of NGOs, and build greater recognition and trust in the sector among funders and the wider community.

Secondly, several recommendations will benefit all NGOs, whether or not they raise money through the SSE platform. Specifically, the suggestions that go beyond new funding avenues for NGOs, and aim at the creation of a supportive environment for them, including: one, encouraging institutions like information repositories on NGOs (like GuideStar, BSE Samman, etc.) and social auditors for impact measurement; and, two, introducing standard reporting norms and impact measurement for NGOs that seek to raise money through the SSE. The committee has also recommended tax benefits and regulatory clarifications.

To know more, read the full op-ed here.