April 3, 2008 | Read Time: 1 minute
The Rockefeller Foundation has announced a $500,000 grant to study the feasibility of creating a stock market for businesses that seek to achieve a social mission and make a profit.
“The current lack of a stock exchange that enables enterprises to list without losing control of their social mission inhibits some very good companies from gaining the expansion capital that they need,” says Antony Bugg-Levine, a managing director at the New York foundation.
The U.K. Social Stock Exchange, a company in London, will use the grant to determine how much market demand exists for a stock exchange for social enterprises, and to design the technological and legal tools to start it.
If the study finds that enough investors are interested in the idea, the company’s goal is to start the exchange in 2009.
Government Role
The government’s strong support for social enterprise played an important role in Rockefeller’s decision to make the grant in Britain, says Mr. Bugg-Levine.
The government has created a new corporate entity for social-purpose businesses and plans to start a social-investment bank.
Developing Standards
The grant to the U.K. Social Stock Exchange is part of a larger effort by the Rockefeller Foundation to help create an environment that will nurture the development and growth of businesses that combine social and financial goals.
In February the foundation awarded a $500,000 grant to B Lab, a nonprofit organization in Berwyn, Pa., that is developing a set of standards to measure and certify companies’ social and environmental performance.
“The existence of such a standard would facilitate investments in these companies,” says Mr. Bugg-Levine, “because people seeking to make impact investments would not need to identify for themselves each time they make an investment whether the company they’re investing in has a genuine social purpose.”
