After years of lobbying policymakers since 2014 on how they can deploy corporate social responsibility (CSR) funds, Indian companies ran into some of the much-needed amendments made in 2021. Promoters of the game incorporated a number of innovations, such as setting up their own non-profit entities and trusts to use the funds and third parties to remit the money back into their pockets for commissions. The idea behind India becoming the first country in the world to levy CSR tax was undermined by such silly games, resulting in sub-optimal impact of the initiative at the grassroots level.
Last year’s revision requires audit by independent agencies to account for higher spending 10 crore and project over 1 crore CSR allocation was a good step to stop the leaks. With almost two-thirds of India still living in poverty by today’s standards of living, the importance of CSR cannot be underestimated. Companies should take CSR more seriously and responsibly as the demand for stakeholder capitalism picks up around the world. Partnering with non-profit organizations (NGOs) to identify causes to fund is the ideal way to achieve win-win results. With a good partner and showing real good results, profits will be added revenue, increased media exposure, positive public relations or some combination thereof (for both).
Before allocating CSR funds, choose a cause that has a natural connection with the business. An anti-waste campaign may work better than building toilets or imparting valuable skills to rural youth. A cause that fits both CSR guidelines and enterprise strategy can have a lasting impact. Internally, the project can be thought of as ’cause marketing’, which differs from philanthropy in that the latter usually involves charity, whereas it is about strategic engagement and active relationship building to accomplish goals. is in.
Why CSR? The overarching objective is to give back to the society. But what if you could build your brand and business while doing social work? Taking care of the local communities around factory locations, as Tata Steel did in Jamshedpur decades before India’s CSR mandate, can go a long way. Well-chosen cause marketing can increase brand value, even if its top or bottom level benefits are not immediately apparent.
Whether mandated or not, companies need to use CSR funds wisely, rather than as a sign-off item for a chief financial or human resources officer, for something that captures the likes of a CEO. May be inclined to allocate funds. Firms need to examine strategic fit. Not every worthy cause can be funded. Just as one’s business strategy should have differentiated offerings, so should CSR initiatives. Find NGOs with similar mission to yours and think of value addition.
Here are some guidelines for CSR efforts:
Give more than just money: Don’t just allocate money. Incorporate the business as a true partner, attend joint meetings, regularly review progress, take some measures and give valuable suggestions for a more professional approach to managing the cause. Remember, an NGO partner may not have the same talent as your organization. This does not mean that you should impose your thinking on NGOs or micromanage things. It has to be emotionally ally in order to nurture relationships and get better results. The key word is ‘co-creation’. But if a purpose is needed 2 crores and you offer 20 lakhs, you can’t expect to say much.
Set clear objectives and expectations: Unless these are clearly set out and all stakeholders are aligned with them, you cannot expect any confidence or fair performance. It is best to let all of these know before entering into a partnership agreement. Being in front is important.
Tell the partner about your business needs: NGO partners should know that the companies that fund their CSR budget are honest about the reasons they choose, but they also have business interests. Unless these needs are met, the long-term sustenance of the marketing reason will remain in doubt. Crucially, companies want appropriate branding in all the social events they do, and this can be a sore point at times. How much brand exposure is a question that always comes up in discussions with an NGO or stakeholders.
Keep communication channels two-way: To build and maintain successful partnerships, both the company and the executing agency must strive to keep communication channels open at all times. Substantial donors can get board seats in the NGOs whose work they support. Companies must subscribe to a steering committee.
Bridging the language gap between NGO and Company: Since both focus on different aspects of the same cause, this divergence can become a serious threat to proper execution. For example, many nonprofits do not have reliable data systems to track progress and develop appropriate metrics. They are also often publicity-shy. What matters to them is doing good work, regardless of its relevance to public relations and the benefits it brings. Here is where business executives can assist, perhaps by explaining how good a PR cause can help.
Have metrics and governance systems in place: Both partners must know whether the mission is being accomplished and whether progress is on track. Companies can adopt two types of metrics, one set to measure the impact of supporting a CSR cause, and another to track the level of awareness within the community. This will help deepen the partnership.
M. Munir is the co-founder and chief campaigner of the non-profit Medici Institute. He @MunierMuh . tweeted on