1. Prequel:
Over the centuries, the nature of financial support for voluntary action has evolved significantly. In ancient times, such support was primarily rooted in philanthropy and charity. Helping the poor and vulnerable—especially by providing food and meeting basic needs—was seen as a moral duty, often referred to as “Dharma.” Communities were also known to respond generously during times of natural disasters, extending support to those affected.
Gradually, this charitable spirit expanded to include support for essential services such as healthcare and education. However, it was only in the last century that the concept of sustainable development began to take shape. The focus shifted toward promoting livelihoods, equality, and long-term empowerment. Over time, both national and international development agencies, supported by progressive Corporates, began funding initiatives aimed at these broader development goals.
In the past 15 to 20 years, however, we have witnessed a major shift in the funding landscape for voluntary organisations. The introduction of Corporate Social Responsibility (CSR) as a legal mandate in India marked a significant milestone. In addition, there is growing global attention toward responsible business practices, circular economy models, and net-zero commitments. This has given rise to the Environmental, Social, and Governance (ESG) framework, which is quickly gaining traction across the world.
New and innovative models of social financing are also being explored. One such example is the Social Stock Exchange (SSE) in India—a platform designed to connect social enterprises with impact-driven investors and donors. These hybrid models are still evolving but show great potential in shaping the future of development funding.
As social development professionals, we must stay informed and adaptive. We must also ensure our organisations are prepared to take advantage of these emerging opportunities to better serve our communities. Being proactive—acting as early adopters—can position us to benefit from these changes more effectively.
This article provides a basic overview of the background, key features, and scope of the SSE, CSR, and ESG frameworks to support a foundational understanding of these important trends.
2. The Social Stock Exchange: What It Is and Why It Matters
The Social Stock Exchange is a new initiative started by the Indian government and regulated by SEBI (Securities and Exchange Board of India). It was announced in the 2019–2020 Union Budget as a way to help social organisations raise funds in a transparent and reliable manner. The SSE works as part of existing stock exchanges, like BSE and NSE, but instead of focusing on financial profit, it focuses on social impact.
Through this platform, non-profit organizations (NPOs) and for-profit social enterprises can get listed and raise funds from individuals, companies, and institutions that are looking to support social change. This is a major step forward because it builds trust and visibility for the social sector.
a. SSE Working mechanism for Voluntary Organizations:
To get listed on the SSE, an NGO must meet certain criteria. It should be at least three years old, legally registered under Indian law, and have a good track record of work and financial reporting. Once listed, Voluntary Organizations can raise funds using special instruments such as Zero Coupon Zero Principal Instruments (ZCZPs). These are not like regular investments—donors give money for social returns, not financial ones.
Voluntary Organizations listed on the SSE must follow strict reporting rules. They need to publish an Annual Impact Report and use a Social Impact Scorecard. These help donors and investors understand what kind of impact their money is creating. This builds greater transparency and helps attract more funding.
The SSE allows Voluntary Organizations to reach new types of donors, including retail donors, companies, high-net-worth individuals, and international foundations. It also helps Voluntary Organizations build a strong public image and credibility.
b. The Larger Scope and Opportunities:
The SSE is more than just a funding platform—it encourages Voluntary organisations to become more professional and innovative in their operations. It supports a shift towards results-based funding models and blended finance (a mix of grants and investments). It opens the door to partnerships with companies that want to support verified, high-impact programs. For Voluntary Organisations, this is a chance to think bigger, act smarter, and create long-term change at scale.
3. New Trends in Corporate Social Responsibility (CSR)
In India, CSR has changed a lot since the Companies Act of 2013 made it mandatory for certain companies to spend 2% of their profits on social causes. Today, many companies are moving beyond this basic rule and are investing in strategic CSR. They want to make a real difference in areas that matter to their business and their communities, such as education, healthcare, environment, and digital inclusion.
Companies are also coming together to support larger, joint projects, often in partnership with Voluntary organisations. These projects are long-term and are designed for real impact. In addition, companies are now using technology platforms and dashboards to track the success of their CSR programs. This means Voluntary organisations need to be more tech-savvy and ready to show data on their work.
4. Overview of ESG and its relevance to Voluntary Organisations:
The ESG (Environmental, Social, and Governance) framework is also becoming important for Voluntary organisations. Big companies now have to report their ESG performance, and many investors are making decisions based on these scores. The “S” in ESG—Social—includes issues like community welfare, education, gender equality, and health. This is where Voluntary organisations come in.
To take advantage of this trend, Voluntary organisations should align their programs with ESG goals. Companies are looking for trusted partners who can help them meet their social impact commitments. Voluntary organisations with strong governance, good data, and clear impact results are in a good position to form partnerships under the ESG framework.
Also, at DHAN, we see the ESG as a top–down approach. It is supply-driven. But we wanted to be a pioneer in setting up ESG, which has evolved from the demand system, community-driven. As our DNA is grassroots action and localisation, DHAN will be working on developing the ESG framework with community-driven initiatives.
5. Way forward:
Fundraising for Voluntary organisations in India is drastically changing for the better. The Social Stock Exchange, along with CSR and ESG trends, offers new paths to raise funds, build credibility, and create a deeper impact. However, to use these opportunities well, DHAN must invest in building its internal systems, improve its reporting, and align its work with larger development goals. Our professionals should be updated on the recent changes that have happened in this sector.
The future belongs to those organisations that can prove their impact, build trust, and partner effectively for change. So far, we have done remarkably well. Let’s prepare ourselves to carry the 30-year legacy of DHAN for the future.