‘Social stock exchanges’ have for many years now been held out as a potentially promising way for ‘social enterprises’ to raise money, matching would-be ‘social investors’ or ‘impact investors’ with promising ‘investments’. The plethora of quotation marks here is supposed to reflect the large divergencies in definitions and approaches in all these areas.

A recently published SSIR article, ‘The Rise of Social Stock Exchanges’ by Bandini Chhichhia, offers a useful breakdown of progress to date and where we are now.

Reading this article prompted me to search the Alliance archive. When did we first cover social stock exchanges? As I expected, the first mention came in an article by Celso Grecco in Brazil, ‘From not-for-profit to “social profit”’, published in March 2005. In it Grecco describes an innovative scheme to raise money through BOVESPA, the main Brazilian stock exchange, for a portfolio of Brazilian non-profits

A year later, no doubt prompted by developments in Brazil, social stock exchanges were the focus of one of the closing plenaries at the Third Skoll World Forum in March 2006, and Celso Grecco was one of the speakers.

Peter Wheeler mentions this in an Alliance article called ‘Towards a social stock exchange – barking up the wrong tree?’ in September 2006. In this article he quotes Matthew Bishop of The Economist, also on the Skoll panel, referring to social stock exchanges as a ‘mad capitalist metaphor based on a misunderstanding of what capitalism is about’.

Wheeler sets out ‘two distinct broad approaches’: ‘The first is the marketplace in which “non-profits” and non-profit-distributing (but possibly profitable) organizations (social enterprises) raise money’, and he gives the Brazilian scheme as an example. ‘Note that the emphasis is on raising money – bringing investors/donors together with those doing the good work so they can “transact”. … The second approach is subtly but importantly different. It doesn’t necessarily envisage a new form of organization or even a new “exchange” platform. The focus is on value and price, getting a social return on an “investment”.’

How far have we come since those early years?

Caroline Hartnell, is editor of Alliance magazine.