Make the most of CSR

The Company Act 2013 and the accompanying rules will impact the points of intersection between India’s for-profit and not-for-profit organisations. The threshold of ₹5 crore annual profit and the minimum 2 per cent of net profits prescribed will force a flood of fresh entrants and funds into the field. This is even after allowing for some of the old wine of ongoing welfare, civic and environmental schemes in the newly labelled bottles.

Of course, any change in the status quo raises questions. Why 2 per cent of net profit for CSR? How about a more calibrated move, especially given the depressed business conditions and compressed profitability?

There are also questions about the collective capacity of business and NGO sectors to efficiently utilise large sums, estimated to be on either side of ₹10,000 crore.

The limited infrastructure and random initiatives for audit, certification and training of NGOs, raise questions about the bandwidth to handle the magnitude of the task.

Here are some expected corporate responses, all legitimate in every way.

Swallow the bitter pill, like another tax: If a child is forced to read, he will pick up a comic, not his text book. Expect a similar response from companies without a philanthropic track record. Compliance response of the law-abiding, with the stoicism of paying up a new tax.

Tonic for the brand: Back a theme in sync with the brand personality. Equally, the theme can also be something that bleaches a blemish. Note that oil majors are among the highest spenders on ‘green’ campaigns.

If a women’s brand (or even a macho brand) runs a media campaign on gender equality, even if there is no action on ground, welcome it for its potential to alter attitudes as possibly did Havell’s social messaging and Tata Tea’s “Jago re”.

Demand generators: Who will not welcome promotion of hygiene, even if the awareness campaigns are by marketers of toothpaste and toilet soap?

Spread it thick with proximate stakeholders: Gain the loyalty of neighbourhood community and customers, by making them the beneficiaries.

Integrate with operations: Train masons, if you are a construction company; train mechanics, if you sell any machine. That will ensure low-cost product service and reach, will keep customer complaints down.

Employee engagement/ voluntarism: When the scramble for reliable NGO partners begins, the inadequacies in the NGO sector will become obvious. That may force some companies to try employee voluntarism — and be surprised by hiked employee motivation even without a salary hike.

For friendship’s sake: Back spouse’s fancy or oblige a friend and sign cheques. Such lazy CSR would mean not benefiting from the many creative options and foregoing the opportunity to endear itself to crucial stakeholder groups while making a lasting difference.

There are indeed wide options. The designated fields include poverty alleviation, health, nutrition, education, the environment and the like. The ultimate objective of any corporate social responsiblity project is to be self-sustaining.

To succeed, a CSR programme should have lasting relevance to the beneficiary – and equally, to the sponsor. This is important, because organisations cannot be charitable, only its people can.

And people in leadership roles change. The only way to ensure longevity of partnerships is to choose themes and tasks that uphold the shareholder interest.

At the same time, the clasp of the helping hand should not be released halfway, especially when the beneficiary is getting up and finding his feet.