Navigating the CSR Maze Can Leave NGOs Gasping for Breadth

The Indian Corporate Social Responsibility (CSR) law came into existence on April Fool’s Day in 2014. So, who was the CSR law meant to fool? The companies? They are forced to part with 2% of their average net profits because the government claims not to have the money for funding basic social welfare. The NGOs? They are forced to implement social projects which government agencies are supposed to, at a fraction of the cost and with impractical rules. Or the people? They are fooled by the governments anyway in more ways than one, all the time.

What has Rs. 100,000 plus crore in six years (up to 2019- 2020) and perhaps another Rs. 20,000 plus crore up to now achieved? A white paper or independent research on this will be interesting. Going by what government agencies achieve in terms of impact (remember the famous statement that only 10% of the government money reaches the beneficiary), the NGOs would certainly have done many times better.

Then, why doesn’t the government trust NGOs? The massive trust deficit is India’s bane and will continue to hurt its development path. India fares as one of the worst when it comes to ‘the ease of doing business’ although a convenient tweak to the criteria recently made the country look a little better. We may need another index for ‘ease of doing business for NGOs’. Kiran Karnik, in his crisp foreword, wonders why CSR laws are implemented so strictly when umpteen other regulations are lax or enforced selectively.

Meena Raghunathan’s book Doing Good: Navigating the CSR Maze in India, published by Harper Business in August 2022, is an important addition to the current dialogue about ‘how to unleash CSR’s real potential? It is both a toolkit and a way forward guide for businesses told in digestible tone and spirit. She argues that only a collaborative working model between the government, corporates and NGOs can significantly boost CSR’s positive impact.

To Santheri Mallaya, a senior journalist, who moderated a session on the topic of the book with the author at the recently held 8^th Bangalore Business Literature Festival, “The book astutely covers pretty much every aspect of the CSR journey both from the NGO as well as the corporate perspectives and has laid out the pieces as an objective guide. I particularly enjoyed reading about the piece on social entrepreneurship. About how do you view the future of social entrepreneurship in India and how does it integrate into the CSR journey.”

Mallaya asks Meena about the problems NGOs have with the way CSR game is being played out. “CSR initiatives seem to focus a lot on the impact numbers rather than the qualitative aspect associated with a project. You have broached upon this as well in the book. Isn’t this a serious pain point for a not-for-profit that intends to take baby steps in creating the right impact but gets barred from funding on the grounds of the numbers it projects in proposals?”

“Capacity building and staffing for effective CSR – you bring this up too. How do we view these aspects from the point of view of Indian CSR 2.0?”

Watch the chat here

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CSR 2.0 – Whose Purpose Does it Serve?

India’s CSR Law was hailed globally for its unique or innovative way of making businesses pay for their sins of omission and commission. While the businesses are beginning to feel somewhat comfortable at how CSR is panning out, the NGOs, the key implementors of CSR projects, seem to be losing their nerve. Certainly, millions have benefited from CSR from good projects but a sharp scrutiny of the nature of their impact and their long-term sustainability will help.

Doing Good has tried to simplify complex frameworks of CSR, making it easier for corporates to plan their corporate social initiatives. The fact that the author has had her feet dirtied in this space for close to two decades, means that the book has come straight from her gut.

Eight years is a long enough period for ironing out wrinkles in a new law and make it robust for all ecosystem players so that they can play their part well. But new developments in recent months are bad news for CSR. Here are a few:

1. NGOs to now expected to bid for corporate projects. They must hire professionals who come at a stiff cost, and they can’t afford them.
2. High GST rates. Why GST on CSR? – Can we tax the money meant for social good? Makes sense?
3. Irrational scrutiny of NGO accounts. Credible NGOs are exiting the space leaving the space open for the unscrupulous.  
4. Almost impossible for NGOs to get funds from credible foreign sources because of stiff FCNR laws.
5. Forcing Foundations to fund pet projects like the PM Cares Fund, that does not like its accounts to be audited.  
6. Only 5% administrative cost ceiling means NGOs cannot get quality professionals.  

Any number of books and debates will not help if the policy makers brazenly mix their political or personal agendas with that of the country’s social agenda. Of course, book like Doing Good and the recent one of Rohini Nilekani – Samaaj, Sarkar and Bazaar – A Citizen-first Approach, published in August 2022, will keep the debate for effective and transparent use of public funds alive. It doesn’t look like navigating the CSR maze is going to get easy soon.