Substantial Fundraising Opportunities Await NPOs
The shift from 'social auditor' to 'social impact assessor' signifies more than a mere change in terminology; it represents a comprehensive transformation in the modus operandi of Non-Profit Organisations (NPOs). It extends beyond the verification of fund utilisation for its intended purpose, emphasising the evaluation of the impact on the underprivileged or beneficiaries following NPO interventions, as highlighted by Makarand M Joshi, Founder of MMJC & Associates.
The recent Securities and Exchange Board of India (Sebi) board meeting endorsed the proposal to rename 'social auditor' to 'social impact assessor.' Joshi emphasised the significance of this change, emphasising the need to assess the outcomes and effects on beneficiaries after NPO interventions.
Regarding the Sebi board's approval of reducing the minimum application size and minimum issue size on the Social Stock Exchange, Joshi noted that Indian corporations already allocate substantial amounts, approximately Rs 25,000-30,000 crores, for Corporate Social Responsibility (CSR). This creates a substantial market for NPOs to raise funds, presenting an opportunity for those aiming to contribute to social causes. The landscape now offers abundant funds for impactful initiatives.
The approved measures by the Sebi Board aim to boost fundraising by NPOs on the Social Stock Exchange. This includes reducing the minimum issue size for public issuance of Zero Coupon Zero Principal Instruments (ZCZP) by NPOs on SSE from Rs 1 crore to Rs 50 lakh. Additionally, the minimum application size for public issuance of ZCZP by NPOs on SSE has been reduced from Rs 2 lakh to Rs 10,000, facilitating broader participation, including retail investors.
The board also greenlighted the change in nomenclature from 'Social Auditor' to 'Social Impact Assessor' to convey a positive approach toward the social sector and provide reassurance to NPOs. Furthermore, NPOs are now permitted to disclose past social impact reports in fundraising documents, aligning with their existing practices, subject to the disclosure of key parameters such as the number of beneficiaries, cost per beneficiary, and administrative overhead.
