Performance based philanthropy

Traditional philanthropy often runs on trust and reputation. A well-known name gets donations; a small, unknown NPO struggles, even if it does better work.

The workbook names performance based philanthropy as one of the benefits of registering and listing on a Social Stock Exchange. Because an enterprise's performance is monitored once it is on the SSE, giving starts to follow evidence instead of reputation alone.

The workbook's own phrase: the SSE "instils a culture of performance (Social return) driven philanthropy." The parenthetical matters — the "performance" being rewarded is social return, not financial return. A donor giving to an SSE-registered NPO can see, in its Annual Impact Report, whether the money actually changed anything.

Performance based philanthropy is the third of five benefits the workbook lists for Registration and Listing on a Social Stock Exchange (Chapter 3, section 3.3.2):

1. Improved market access
2. Synergy between investors and investees in social aims
3. Performance based philanthropy
4. Minimal registration cost
5. Additional avenue for Social Enterprises

The mechanism behind it is the SSE's own monitoring machinery. Every social enterprise raising funds on the SSE must file an Annual Impact Report, covering at least 67% of the previous year's programme expenditure, assessed by an independent Social Impact Assessment Organisation for listed projects. That verified track record is what lets donors compare "performance" — social return — across enterprises, instead of choosing on brand recognition alone.

Illustrative NPOs; figures are made up.

Two NPOs both run child-nutrition programmes and both register on an SSE. Poshan Setu is well known, with a large media presence. Anna Kiran is small and unknown outside its own district.

Before SSE registration, a CSR donor deciding between them might simply choose Poshan Setu, on reputation. After both file Annual Impact Reports, the donor sees that Anna Kiran's assessed report shows a higher reduction in child stunting per rupee spent — Rs 850 per beneficiary against Poshan Setu's Rs 1,400 — even though Anna Kiran is smaller.

Under performance based philanthropy, the donor now has a reason to fund Anna Kiran on its verified results, not Poshan Setu on name recognition alone.

Chapter 3 (Registration and Listing on Social Stock Exchanges), section 3.3.2 ("Benefits of Registration and Listing on a Social Stock Exchange"), names performance based philanthropy as the third of five listed benefits, alongside improved market access, investor-investee synergy, minimal registration cost, and an additional funding avenue. Expect a question asking which SSE benefit is described by "performance of the enterprises listed on an SSE is monitored."

• "Performance" here means social return, not financial return — the workbook's own parenthetical makes this explicit.
• Performance based philanthropy is one of five named benefits of registration and listing — a question may ask you to pick it out from a list including market access, minimal cost and the additional funding avenue.
• The mechanism behind this benefit is monitoring through the Annual Impact Report, not a separate performance-tracking system unique to this benefit.
• Do not confuse this with reputation value, a separate registration benefit the workbook describes, which comes from meeting the mandatory registration criteria rather than from ongoing performance monitoring.