By Anant Shrivastava & Vrindaa Sharma
In the last couple of months, the CSR world has been buzzing. We're very excited to see people talking about critical topics like the advantages of collaboration in CSR and the role of strategic CSR in enhancing brand value. DOT is working on several collaboration-focused projects and projects focused on aligning CSR with business values and purpose.
Collaboration works for scalable social impact
The idea of collaboration between companies for more effective CSR is hardly new. Even the govt. has suggested that companies can collaborate with one another on CSR initiatives. The benefits of such partnerships cannot be overstated. As this Live Mint article states, advantages range from availability of larger funds to cross functional expertise that can address a broad range of issues to wider geographic presence for increased impact. The article also talks about valid challenges in implementing such partnerships. We at DOT are undertaking just such a coalition on road safety with our partner Shell so we’ll experience first-hand how difficult, but hopefully how successful it can be!
Corporate-Government collaboration on CSR, a challenge!
Collaboration seems to be the flavour of this round-up! According to this DNA article, a proposal by the Maharashtra govt. to work with corporates on CSR has failed to elicit a response. We’re not surprised by the reasons stated by companies – from bureaucratic red-tape to corruption. First of all, the Government shouldn’t really be directing companies on how to spend CSR funds. We’ve argued against this before and will say again that companies should be given the freedom to invest CSR funding in areas they see fit. This is important for effective CSR programmes that utilise the core expertise of companies. Secondly, if the Government does want to work with corporates on CSR for increased impact, it should identify sectors and issues requiring intervention and limit itself to suggesting them to companies. Thirdly, the greatest help from the Government would be to encourage companies to innovate within the space and work with organisations that can truly make a difference through game-changing solutions.
Do corporates have unrealistic expectations from NGOs?
The transparency and accountability of companies towards CSR translates into strict monitoring, evaluation, and reporting requirements for NGOs that implement the projects on ground. As this article states, there is a mismatch between the expectations of companies and NGOs on M&E and reporting. We agree that M&E and quality reporting can be a time-intensive exercise that requires qualified resources. The issue needs to be tackled on two fronts – the companies should understand that M&E and reporting comes at a cost, and be ready to allocate a portion of CSR funding towards them.
The NGOs on the other hand, need to invest time and funding to build their capacity to undertake M&E and deliver quality reporting. They should work towards making quality reporting a standard across all projects for all donors. This would create cost and time efficiencies for M&E and reporting and ensure these vital aspects are executed effectively and skilfully for all projects, not only those funded by CSR funding.
Taxing the 2% - a taxing task!
Even though the govt. has stated that CSR expenditure is not exempt from tax, plenty of ambiguities still exist that allow companies to avail tax benefits on CSR spending, as pointed by this article, The biggest issue is that philanthropic donations or grants to different sectors/causes enjoy different tax exemption rates ranging from 50 to 200 percent. This has a potential downside of companies favouring trusts or organisations that provide higher tax benefits. Thus, the intention of positively impacting society could get lost in an effort to save tax. An effective way to mitigate this risk is to implement a uniform tax treatment on all grants and donations. This has been suggested to the govt. by the MCA’s Baijal Committee but no action has been taken yet. We hope a change, however slow, is underway.
Using strategic CSR to drives brand value
We can’t stress enough on the importance of strategic CSR in not only maximising the social and environmental impact but also positively influencing the brand. A good thing is that smart companies are thinking the same way. Anika Agarwal, head of marketing at Max Bupa talks about adopting a CSR strategy that delivers positive impact on people, planet and your brand. In a time where consumers are influenced by a brand’s social and environmental footprint, CSR can prove to be the determining factor for the brand’s success or failure.
Leveraging CSR for academic research and development
This Forbes article talks about the different ways in which CSR funds can be pumped into academics, research and educational institutions. CSR funding can surely be useful in ensuring development of new technologies and solutions that can solve pressing social issues. While the Companies Act, 2013 specifies that CSR funds can be utilised for supporting research and technology incubators, investment in this area has been poor. Companies seem to stick to traditional grant giving to NGOs instead of looking out for social start-ups and research organisations innovating in the social space. It would be great to see companies stepping up their efforts in finding and supporting organisations that offer new and scalable solutions to existing development challenges.