Business leaders and their contributions to social causes have been a key pillar of nation building in modern India. In the pre-independence era, the freedom struggle received support from leading figures like G.D. Birla and Jamnalal Bajaj, who not only contributed financially to political campaigns but also supported social reform projects, ranging from upliftment of marginalised groups such as Dalits and women, to supporting the development of khadi and village industries. Similarly, Jamsetji Tata founded and supported major institutions such as the Tata Memorial Hospital and the Indian Institute of Science to support the country’s advancement, a commitment continued by the Tata Group and Trusts through significant investments in community development through schools, healthcare facilities, and infrastructure development across the country.
These early endeavours built a legacy of businesses contributing to social good and supporting the country’s development needs, decades before CSR giving was made mandatory under Section 135 of the Companies Act in 2013. For instance, ITC’s e-Chaupal has been providing farmers access to information, technology, and market linkages since 2000. Similarly, Mahindra Group’s Project Nanhi Kali has provided educational support to underprivileged girls for nearly three decades, since its launch in 1996. Notably, echoes of the early corporate focus on education, health, and rural upliftment can be found to this day, with education and health typically receiving 30% of total CSR funds (Sattva’s State of CSR in India 2014 – 2021).
Since the implementation of the legal mandate in 2013, CSR giving has been on a steady upward trajectory, becoming one of the largest sources of funding for social causes in the country. It is estimated that over 29,500 companies have cumulatively spent nearly `1.22 Lakh Crore on CSR as a result of the Government’s CSR mandate. In the last five years alone, CSR spend has grown by 52%, with a sizeable number of companies spending more than the mandated amount, which continues to increase year on year (Sattva’s State of CSR in India 2014 – 2021). According to Give’s dus spoke India Inc Report, the next decade will see CSR being a catalyst for impact, with annual spends of over INR 1 Lakh Crores. In this context, it is critical for social impact organisations to leverage this growth by forging mutually beneficial partnerships with the corporate sector.
However, given the relative recency of the CSR funding mandate and the evolving maturity of the field, there are some challenges that need to be addressed. Through consecutive batches of The ILSS Fundraising Program, nonprofit leaders and fundraisers have expressed struggles such as complex compliance requirements, funding being limited to projects at the cost of other strategic and organisational capacity needs, and the emphasis on quantifiable metrics which may not fully capture the essence of the organisation’s mission or on-ground work. When asked about their thoughts on CSR, participants of the Program used the terms ‘transactional’, ‘restricted’ and ‘stressful’, to describe their experiences with CSR funding. This is a clear indicator of the friction in CSR-grantee relationships and signals the need to build more trustful relationships based on mutual understanding and shared objectives.
Addressing these concerns requires understanding, commitment and action at both ends. Nonprofits, for instance, must recognise the constraints CSR funders are bound by. CSR giving operates within a strict regulatory framework. The 2021 amendment to the Companies Act governing CSR giving requires companies to submit detailed annual disclosures and applies monetary penalties for non-compliance on mandated spends. Further, decision making is dependent on CSR committees with budgets exceeding INR 50 Lakh requiring the approval of the Board. Projects with larger budget sizes also require mandatory impact assessment by an independent agency. Consequently, CSR giving tends to focus on established organisations and projects that have the requisite tax certifications and charitable status, and a track record of measurable on-ground impact. While this can seem challenging for nonprofit organisations in the short term, particularly those in the early stages of their existence, it also presents an opportunity for strengthening organisational efficiency in the sector. Ensuring compliance and necessary documentation, and creating robust and transparent financial reporting systems help build the right foundation and trust with other funders. Similarly, establishing credibility through clearly articulated impact metrics and outcomes is crucial for the organisation’s longer-term success. In fact, the sector at large would benefit from stronger frameworks for impact measurement with robust methods of measuring progress, including on less tangible parameters.
On the other hand, the time is ripe for CSR funders to evaluate how their grantmaking strategies can evolve to broaden the scope of their impact and support nonprofits to be more strategic and sustainable. As mentioned earlier, CSR funding has historically been concentrated in a few thematic areas, such as education, healthcare and livelihoods, presenting limited opportunities for nonprofits to address other critical needs. In a recent survey with alumni of The ILSS Fundraising Program, of the 18% of nonprofits who stated that they do not receive CSR funds, 40% work in non-traditional domains like research, media, ecosystem strengthening and leadership building. In contrast, Give’s dus spoke India Inc. report stated the intent and willingness of CSR leaders to fund innovative projects, ecosystem-strengthening research, and organisational development of NGO partners. This presents hope for such nonprofits to benefit from the expanding pie of CSR funds. The openness to funding new impact domains, coupled with efforts to make grantmaking more collaborative, trust-based and transparent, are steps in the right direction for CSR and nonprofits to collectively deliver significant impact on the ground.
In addition to grant funding, corporate giving presents other strategic opportunities that benefit both the company and partner nonprofits. CSR contribution has been moving beyond grants to holistic engagement models of innovative non-fiscal partnerships. Leading among these trends is corporate employee engagement. This can take the form of voluntary initiatives, leveraging the technical and process expertise readily available in companies. For example, at Accenture, CSR projects are treated like any other business consulting assignment with employees involved in co-creating roadmaps and solutions for their partners. Such programs can be particularly useful in improving organisational efficiency of the nonprofit. Additionally, many corporations offer matching gift programs which match the donations made by their employees to eligible nonprofits. This expands the donor base for nonprofits and increases visibility. In 2018, danamojo collaborated with GivingTuesday to host a month-long matching campaign awarding`51 Lakh in matching funds. Nonprofits can also partner with corporations on cause-related marketing campaigns and leverage the company’s resources for wide scale visibility for their work. This strategy boosts the company’s reputation as a socially conscious enterprise and drives sales for them, while raising funds and awareness for the cause. For example, Akshay Patra partnered with Ching’s Secret to raise funds through the ‘India ki Hunger Bajao’ campaign featuring Ranveer Singh.
Evidently, purposeful partnerships between nonprofits and CSR funders can unlock immense resources to solve our toughest development challenges. The 2013 Act made India the first country in the world to have a legal mandate on CSR giving. With our storied history of corporate-nonprofit collaborations and encouraging trends in the field, we now have the golden opportunity to drive disproportionate impact through these efforts.
