Power of CSR Partnerships

The Power of CSR Partnerships: Building a Win-Win Strategy

Date : Jun 27 , 2024 | By Snigdha Raha,Meenal Manolika

In the rapidly evolving social sector landscape, the growth of CSR giving presents new funding avenues for nonprofits. In the last five years, CSR spend has grown by 52%, with a sizeable number of companies spending more than the mandated amount increasing year on year (Ministry of Corporate Affairs CSR Portal). 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. Of particular note is the reported intent and willingness of CSR leaders to fund innovative projects, ecosystem-strengthening research, and organisational development of NGO partners.

In this context, the role of the nonprofit fundraiser has become critical to leverage this channel effectively. However, most nonprofit organisations struggle to tap into and build long term relationships with CSR partners. When asked about their thoughts on CSR, ‘transactional’, ‘restricted’ and ‘stressful’, were the top responses from the current cohort of The ILSS Fundraising Program. This indicates an urgent need to build more trustful relationships between nonprofits and companies through strategic partnerships towards shared objectives.

In this article, we outline the fundamentals of building effective partnerships with CSR donors:

  1. Ensure Thorough Financial Compliance: CSR donors are bound by the legal framework around CSR and are consequently extremely compliance-driven. In addition to the regulatory guidelines laid out in the Companies Act (2013), each corporation can have a slightly different list of requirements for their grantees. It is important for nonprofits to make relevant documentation readily available for prospective donors. This may include certifications such as 80G and 12A, or other supporting documentation such as audited financial statements. In some cases, you may be able to find the company’s proposal templates or grantee guidelines on their portals or via a Google search, which can help understand their expectations. In general, it is crucial to demonstrate that your organisation manages funds transparently and has the relevant financial management systems in place.
  2. Research Potential Partners: The bedrock of a meaningful partnership between nonprofits and corporations is mission alignment. Thorough research can help the fundraising team identify the most suitable funders, and invest time and resources prudently. Aside from internet searches, it is often helpful to look at other organisations funded by your target donors to confirm their support of similar causes. Press releases about recent grants and the company’s annual CSR report can be a good source for this information. Additionally, it is useful to look at organisations working in a similar domain and their published list of funders. Research can also help identify the dedicated individual/team or department as decision-makers in the process. The company’s social media pages, or professional profiles and public posts of their CSR team members, are usually a great way to understand their thematic interests and the nature of projects they fund.
  3. Understand the Key Motivation: The company’s core area of work often informs the motivations that drive their CSR giving. 77% of the top 40 CSR organisations state significant alignment between their CSR strategy and business priorities. For example, manufacturing companies are frequently keen to directly impact the lives of the communities in the location of their operations. Similarly, technology companies may prioritise projects that leverage advanced technology to solve social problems. Additionally, given the recommendation under CSR regulations that companies should benefit the communities they are situated in, there is frequently a distinct preference for grantee projects to be in the geographic vicinity of the company’s offices, plants or projects.
  4. Craft a Compelling Proposal: After identifying potential partners aligned with your cause, it is imperative to construct a proposal that expressly outlines the big vision for the program’s impact and how the partnership could be advantageous for all stakeholders – the target community, the nonprofit and the company. Clearly articulated impact, goals and vision also help decision-makers understand the effectiveness of the organisation and get quicker buy-in for the proposal. For instance, starting with ‘our work has increased learning levels of students by 30%’, immediately sets you apart and puts you in the top 5% of prospective partners for the donor. Further, measurable positive impact, with well-defined indicators for success, helps build credibility with the reviewers. Lastly, CSR giving can also sometimes be shaped by branding and marketing priorities, so drawing connections between the proposed project and how the work maps to the company’s values and brand image can help bolster chances for the proposal.
  5. Maintain Regular and Transparent Communication: Once funding has been secured, it is imperative to develop a clear understanding of donor expectations around reporting indicators and communication frequency. Use metrics to track the outcomes of your joint initiatives and share these results with your corporate partners at predetermined intervals. Regular updates, progress reports, and collaborative planning sessions are instrumental in ensuring open and transparent communication.

To sustain long-term partnerships, it is imperative to build a relationship that extends beyond funding. Sustained engagement with donors – including prospective donors who have not converted yet – is crucial to cultivating them as champions of your work. Sending regular updates and seeking thought partnerships builds recall value for your organisation. This leads to donors reaching out when opportunities aligned with your vision emerge. Finally, sharing challenges and areas for growth and improvement, in addition to celebrating your impact and successes, helps strengthen trust and authenticity in the partnership.

In the golden era of domestic philanthropy, it is in the interest of the development sector to build stronger relationships between nonprofits and CSR funders. These collaborations hold great potential for both parties to help each other achieve their respective goals, and become catalysts for creating lasting social impact.

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