From Classic Capitalism to Social Finance GSIX | A Global Social Investment Exchange 17th November 2008 Tamzin Ractliffe

“ Poverty is not natural. It is man-made. Overcoming poverty is not a gesture of charity. It is an act of justice. It is the protection of a fundamental human right, the right to dignity and a decent life”. - Nelson Mandela, Nobel Prize-winner and world leader

Classic Capitalism

Social Finance = Sustainable Capitalism

We now know: Business and markets can no longer operate in isolation from society or the environment Charitable giving is not enough Systems-change required Need a “with” economy Combine social values with commercial business practices Enable effective investment, income and capitalization strategies Maximize value and create returns comprising equal parts financial, social and environmental

Business and markets can no longer operate in isolation from society or the environment

Charitable giving is not enough

Systems-change required

Need a “with” economy

Combine social values with commercial business practices

Enable effective investment, income and capitalization strategies

Maximize value and create returns comprising equal parts financial, social and environmental

Current fundamentals in social capital

SA Social Investment Exchange (SASIX) A social stock exchange, listing evaluated projects in priority development sectors Rigorous due diligence process involving intensive assessment, evaluation and reporting Measures real impact and life-change Hybrid Investment options provide a mix of social profits and financial returns Continuum of social investment opportunities – SASIX Social to SASIX Financial

A social stock exchange, listing evaluated projects in priority development sectors

Rigorous due diligence process involving intensive assessment, evaluation and reporting

Measures real impact and life-change

Hybrid Investment options provide a mix of social profits and financial returns

Continuum of social investment opportunities – SASIX Social to SASIX Financial

SIX Social Social Investment (or grant) provides training and equipment so that an organised group of rural blind people can become income-generating beekeepers. RETURN: Social – building the skills and independence of disabled, rural people enabling them to establish viable income generating sustainable businesses helping them to support their families

Social Investment (or grant) provides

training and equipment so that an

organised group of rural blind people

can become income-generating

beekeepers.

RETURN:

Social –

building the skills and independence of disabled, rural people

enabling them to establish viable income generating sustainable businesses

helping them to support their families

SIX Financial Responsible Financial Investment provides microfinance services to low-income families for whom no other source of finance is available, adding value by enabling them to improve the quality of their housing and begin to grow wealth. RETURN: Financial – housing investment yields an effective 13.79% return. Social – low-income families add value to their properties, uplifting the whole community: Women 75% 61% between 40 and 60 years old 63% Informally employed & Pensioners 49% earning below R1 500;94% under R3 500 Formal & informally employed; social security grants

Responsible Financial Investment provides

microfinance services to low-income

families for whom no other source of

finance is available, adding value by

enabling them to improve the quality of their

housing and begin to grow wealth.

RETURN:

Financial – housing investment yields an

effective 13.79% return.

Social – low-income families add value to their

properties, uplifting the whole community:

Women 75%

61% between 40 and 60 years old

63% Informally employed & Pensioners

49% earning below R1 500;94% under R3 500

Formal & informally employed; social security grants

The SIX investment continuum

Spectrum of practitioners by motive

Spectrum of investors by objective

GSIX Country Exchanges

The purpose of GSIX is to: create an efficient global social investment platform and intermediary infrastructure a comparative due diligence framework a range of investment and financing instruments a three dimensional ROI measure raise the bar make social capital more accessible to poor communities

create an efficient global social investment platform and intermediary infrastructure

a comparative due diligence framework

a range of investment and financing instruments

a three dimensional ROI measure

raise the bar

make social capital more accessible to poor communities

- Muhammad Yunus, Nobel Prize-winner and founder of Grameen Bank “ People can change their own lives, provided they have the right kind of institutional support. They're not asking for charity, charity is no solution to poverty.” Thank you