Very few companies carry out a need assessment or track and monitor the progress or impact of their CSR activities, says report.
A recent report by National Foundation for India (NFI) says that a large majority of the CSR projects and corporate family-individual foundations operate without a clear social change strategy.
Of the 26 corporate family or High Net worth Individual (HNI) foundations studied, only 5 were found to have a clearly defined strategic goal. There is also a visible disconnect between a company’s core strength and knowledge domain and its CSR activities.
With most companies choosing to focus only on a handful of issues such as health, education, livelihood and environment, other critical areas remain severely underfunded. Moreover, until the enactment of the New Companies’ Bill, a surprisingly low number of corporate and corporate foundations made their financial expenditure data on such activities publicly available (i.e. only 15 out of the top 50 corporates and only 1 of the 26 family-individual foundations studied). The report suggests that there is still a long way to go before the Indian CSR can play a defining role in social change and match up to some of the global best practices.
The “Emerging Philanthropy in India: Analysis of Gaps and Recommended Interventions” report is based on interviews with 20 leading philanthropists and experts as well as on official data available for the top 50 companies and 26 family/HNI foundations.
A report launch cum panel discussion was organized at India International Center, New Delhi on 20th November 2013. More than 50 participants from corporate, civil society and media in the audience and the panel discussion comprised Mathew Cherian, Chief Executive HelpAge India, Gayatri Subramaniam, Sr. Consultant, Indian Institute of Corporate Affairs and Amitabh Behar, Executive Director, NFI and Adarsh Kumar, Lead researcher of the report.
On the corporate CSR front, the report says apart from the abysmal public reporting about the CSR expenditure; very few companies carry out a need assessment or track and monitor the progress or impact of their CSR activities. Adarsh Kumar, the lead researcher says “What is surprising is, if these corporate/ promoters have to plan a new business venture or expansion, the level of critical planning is usually at the very best, when it comes to CSR expenditure or investment by a HNI foundation, there is a complete lack of planning. The decisions can be driven by things like the promoter’s wish or family tradition etc. that completely neglects the ground reality”.
What also seems to be a trend is the preference of an increasing number of corporate houses to set up their own operational foundations, rather than supporting existing grassroots initiatives/ NGOs working in the field. Of the 26 corporate/family foundations, only 5 were found to be supporting some existing initiative or NGO. In this, a disproportionate amount of CSR resources are at the moment focused on mainly 4 areas i.e. Health, education, livelihood and environment, while other areas such as governance, human rights, affirmative action etc. receive very little or no investment.
Schedule seven of the draft CSR rules issued by Ministry of Corporate Affairs practically limits CSR investments in only about eight areas. This has received criticism from several quarters. Mathew Cherian, Chef Executive- HelpAge India said “While the welfarist approach promoted by the draft CSR rules may augment Government programs, they significantly neglect other areas such as elderly care, disability and others”. He also maintained that the policy framework to allow a broader and more meaningful corporate-civil society partnership is the need of hour rather than focusing on only a few types of activities or organisations.
Gayatri Subramaniam from Indian Institute of Corporate Affairs (IICA) however was more optimistic and said “the new companies Act mandates a dedicated CSR committee in those companies to plan, monitor execution and report all details as required, which would resolve a lot of issues raised here”.
Amitabh Behar, Executive Director, National Foundation for India stressed upon the need to take a broader view of role of state in development and financing mechanism for development including that of the role played by CSR, corporate foundations and NGOs and the urgent need to collaborate in a very strategic way to address root causes of long standing issues.