Socialmarkets - a stock market for investing into social goods

by nitiniitk on Oct 04, 2007      Category: Useful Resources Tags: web2.0 funding donor stock investment

This is going one step ahead of Kiva and DonorsChoose.org. While these allows you to keep track of your investments in non-profits or social entrepreneurs, Socialmarkets.org plans to create a whole system of quantitatively tracking how much social good each non-profit is generating, and create an online stock market on that! Here is another story on the startup:
http://givingnet.net/page31188.cfm

The main idea is best captured by these lines- Three things are needed for such a philanthropic marketplace to work:

First, there must be something for philanthropists to ‘invest’ in—something that, ideally, will be created by ‘social entrepreneurs’, just as in the for-profit world entrepreneurs create companies that end up traded on the stockmarket.

Second, the market requires an infrastructure, the philanthropic equivalent of stockmarkets, investment banks, research houses, management consultants and so on….

Third, philanthropists themselves need to behave more like investors. That means allocating their money to make the greatest possible difference to society's problems: in other words, to maximise their ‘social return’.

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nitiniitk's picture

nitiniitk

I am currently a Phd candidate in Bioinformatics at University of California San Diego. I am from Bharatpur in Rajasthan, and went to Kanpur for an engineering degree in computer science. I have a long-standing interest in web-applications and social work. I have some prior experience in building.....read more

11 Comments

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nitiniitk's picture

The site is accepting registrations, but hasn't launched fully yet.. the idea is pretty interesting though!

aaditeshwar's picture

I love the punchline: "better information = better investment". It is good information which drives good investment which drives good development, and not just investment driving development. I strongly feel that it is very important to understand this relationship. Money is not the problem. Information is the problem.

hkhatri's picture

The concept is cool. But it lacks the grassroot level connections and visibility. It can be a nice forum, once it becomes popular.

nitiniitk's picture

Here is one more site, similar to DonorsChoose.org, that allows you to donate to selected projects and see how your donation is making an impact: http://www.globalgiving.com/howitworks.html

allan's picture

Hi all, I'm the co-founder for socialmarkets.org. Thank you for the comments. If you're interested in taking a look at our current development site, I'd be more than happy to e-mail you the link. You can e-mail me at allan@socialmarkets.org. We are on schedule for a November launch.

Actually, we do have grassroot level connections. I'm the ex-IT Director for New York's Coalition for the Homeless. And a few of the orgs who are participating are very, very small. They're so small that they are not even true 501c3s yet and are fiscally sponsored. I'm just as concerned about the grassroots as you are and that's why we're starting with small organizations and incredibly difficult nonprofit projects and listings. We want a reputation for carrying the most difficult listings so that our donors can understand that nonprofits FAIL often. We hope then that our donors can eventually start picking the nonprofits that don't fail so much so that it can inspire other nonprofits to adopt the same best practices.

I like the pligg site here -- I have a US nonprofit version over at www.kikono.org.

nitiniitk's picture

Thanks Allan. It's good to have a first-hand account of SocialMarkets.org from it's founder! I have a question: Are you focusing on only US non-profits or plan to include NGOs worldwide?

allan's picture

Sorry, US non-profits (and only East Coast ones) for the alpha release. The only problem with going worldwide for us is that we prefer to vet each organization that joins individually. You won't get good outcomes throughput without a personal touch. I'm sure you've worked with nonprofits before -- they demand that personal touch. You'll see similar constraints on scalability with other sites like Kiva and Donorschoose. We'd like to remove it but we don't have a good workflow for that yet. Then again, this is why this is an alpha release. Many of these workflows seem to indicate a personal touch as many of these workflows have antecedents in finance particularly i-banking or in traditional case management for nonprofits. OMG did I just say that i-banking and nonprofits have something in common with each other? Hehe.

An Indian version would be great -- someone here has to tell me how to vet Indian orgs though. I'm assuming we'd need an office in India, broadband Internet, computers and people with heavy connections in the nonprofit sector there. You can see the barriers for entry to us. That said, we will have an open but unpublished API in alpha and a published API in beta (depending on what people want from it).

parul8ue's picture

The concept of "social return on investment" has been around for some time and there seem to be many metrics to measure it.
Here is a link to some resources
http://bschool.washington.edu/gsec/SROI_Resources.shtml

aaditeshwar's picture

eBay recently launched MicroPlace https://www.microplace.com/, pretty much on the lines of what Kiva does. It's cool, but I would have liked to see something more interesting. Maybe on the lines of Nitin's idea of enabling artisans and handicraft-based NGOs to directly sell their products online.

allan's picture

Thanks everyone. SROI does have a lot of different measurements to it. We have a few ideas up our sleeve to improve upon those measurements. Frankly, I think socialmarkets is the most interesting of the startups I've seen -- but don't take my word for it. We'll be out in mid-November.

cervelo jersey's picture

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