The South African Social Investment Exchange (SASIX), a stock exchange which lists selected social investment projects, was launched at the Johannesburg Stock Exchange on 15 June with the aim of helping to transform the social investment and development sectors into attractive ‘social capital markets’. It made a brisk start. Two weeks after launch, some 2,000 shares in listed projects, valued at over R100,000, had been bought by local companies and individuals.
SASIX, an initiative of the GreaterGood South Africa Trust, initially offered 15 social profit projects. The budgets, project plans and expected outcomes of the 15 projects have been subject to an intensive due diligence process and the expected results carefully analysed. The provision of clear, accurate and concise information, before and after, means that investors know exactly how their investment will be used, and what kind of social impact it will generate. This could be crucial in a country like South Africa which has an established culture of giving but a history of low accountability among NPOs. As one early investor commented, ‘While our staffing and infrastructure resources don’t allow us to work as closely with our projects as we would like, we don’t just want to throw money at projects either. SASIX was the answer. It allows us to be involved and to monitor the projects, but at a distance.’
SASIX is the second such development, joining the Social Stock Exchange (SSE) launched in 2003 by the Brazilian Stock Exchange, BOVESPA. Hailing the launch of SASIX, Celso Grecco, one of the founders of the Brazilian SSE, said: ‘Not only corporations and citizens, but financial and capital markets are being called on to join the fight against poverty. Today, I do believe we’re not only answering this call, but we’re offering new maps for the new routes our societies deeply need.’
SSE and SASIX are broadly similar, although the latter has deliberately set out with projects with smaller budgets. At the testing stage, projects with budgets averaging R50,000 were used. All were funded quickly, making for a fast turnover and what Tamzin Ractliffe, Executive Director of GreaterGood South Africa, calls a ‘dynamic capital market with movement in shares typical of a stock exchange, which we hope will provide added motivation and engagement’.
The first SASIX projects come under four heads: early childhood education, orphans and vulnerable children, food security, and enterprise development. Social shares will cost R50 each so if, for instance, an NPO needs to raise R75,000 for a particular purpose, 1,500 shares will be allocated. Once the entire allocation has been taken up, the project is closed to further investment and the work takes place. At the end of the investment cycle, GreaterGood South Africa provides an analysis of the achieved outcomes and an assessment of the lessons learned.
Fidentia Group, a business solutions group, is funding the operational costs of SASIX and providing administrative, financial and trust fund management support.