LOCATION: South Africa
SUMMARY: It has become imperative for business to demonstrate greater social participation and value creation in the communities where they operate. But capital for social development has not necessarily found an effective home, frequently flowing to the best-known programmes or directed through agencies with their own development agendas. This leaves under-developed and under-resourced initiatives, working on the ground to effect change, without access to capital markets.
GreaterGood South Africa’s SA Social Investment Exchange (SASIX) - www.sasix.co.za - is an innovative platform which connects social investors with the development world. We believe that by pulling together a rich diversity of strategies, markets and business, capital and commerce, can be harnessed not simply for the creation of individual wealth but also for the creation of global prosperity and value in its fullest sense.
SASIX offers a transparent intermediary infrastructure providing social investment broking and portfolio management capabilities to stimulate a holistic, effective and dynamic social capital marketplace. After applying rigorous due diligence and accepted risk and impact assessment frameworks, SASIX lists evaluated projects and provides information on researched investment opportunities, simultaneously raising the bar for effective corporate and private sector investment in sustainable high social impact initiatives in poor communities. This levels the playing field by providing access to capital for small, remote organisations. To date over R34.6 million (US$2.7m) has been invested in 53 social development projects in just over two years.
The success of the SASIX platform has led to the development of GSIX – the Global Social Investment Exchange. Established as a federation of country exchanges, supported by in-country intelligence and investment identification, GSIX will:
- catalyse a collective action platform to bring regulatory compliance standards and efficiencies to the social capital market.
- build intermediary structures to absorb capital at scale whilst also building capacity within local communities to meaningfully use that capital
- enable and facilitate buy and sell side investment activity to move more money to more effective, innovative and critical initiatives in order to meaningfully address global, regional and country poverty and sustainability issues.
PROBLEM SPACE: Sustainable poverty eradication will only be achieved if we mobilise private sector funding for economic development on a significant scale. SASIX has shown that a more efficient social capital market means a more efficient development sector, and more effective solutions to the problems of poverty. Social capital marketplaces, like SASIX, are developing successful market-based approaches to the social investment environment. Replicating the SASIX model will further the potential impact it has and can make, delivering real, measurable and meaningful returns and accessing a large and sustainable supply of private sector funding.
Since the launch of SASIX, we have experienced a strong demand for the establishment of a global framework within which local country member operators can source, evaluate and make available to investors worthy projects to invest in. Globally, there has been a growth in both the number of online social marketplaces and in the number of social enterprises fulfilling the role of research analysts, funding intermediaries and asset managers in the corporate philanthropy and social investment fields. These organisations are now keen to create and support the establishment of an effective intermediary structure that brings globally accepted due diligence practices and well researched information, including assessments of potential impact and risk factors, to a global market for social capital.
GSIX has already been established as a project of GreaterGood South Africa and has received initial support from Ashoka, the Rockefeller Foundation and the European Foundation Centre. An inaugural meeting of 15 founding countries has been scheduled for February 2009.
SOLUTION: SASIX and GSIX provide a comprehensive solution that contributes to the creation of an effective social capital marketplace and provides a full service solution for social investors. SASIX and the GSIX platforms are long-term development interventions, concerned with fundamental systems change and of finding a new way of operating in the social capital markets of the future. SASIX has already proved to be a success with over R23m (US$2.4m) invested in 53 fully funded projects and 28 projects still available for funding. The SASIX technology platform has already been established and country partners are already implementing various forms of existing tools for assessment that could easily be drawn together in a collaborative framework. SASIX measures the impact of each listed project and monitors how the project is delivering on its objectives. So far, SASIX has impacted on an estimated 159,680 people’s lives in mainly under-resourced, rural communities. Extending SASIX’s already successful social technology platform to form GSIX will see the birth of the first truly representative global social broking service. We live in an increasingly global world, facing urgent problems that affect us all. By bringing people together to engage in meaningful social investment, we can find joined-up, permanent, solutions to the challenge of poverty.