Corporate social responsibility is an endeavour
Indian firms ran into several crucial modifications announced in 2021 after lobbying authorities for years on how they may utilize corporate social responsibility (CSR) cash. Many innovations were used by the game’s promoters, such as establishing their own non-profit groups and trusts to syphon funds and employing third parties to funnel money back to their pockets for a commission. The rationale of India becoming the world’s first country to implement a CSR tax was shattered by such nonsense, resulting in a less-than-ideal impact on the ground.
Last year’s legislation requiring independent audits for spends exceeding $10 million and projects over $1 million was a solid step toward preventing leaks from CSR funds. With over two-thirds of India still living in poverty by today’s standards, the relevance of corporate social responsibility (CSR) cannot be overstated. As the clamour for stakeholder capitalism grows stronger around the world, companies should treat CSR more seriously and responsibly.
The optimal strategy to achieve win-win outcomes is to form partnerships with non-profit organizations (NGOs) to discover causes to sponsor. The benefits would be greater money, increased media exposure, positive public relations, or a mix of the above with a good partner and actual do-gooder results to demonstrate (for both).
Corporate social responsibility
What is the purpose of CSR? The overarching goal is to give back to society. But what if you could grow your brand and business while helping others? Taking care of local populations around manufacturing locations, as Tata Steel has done for decades in Jamshedpur before India’s CSR obligation, can go a long way. Even if the top- or bottom-line benefits aren’t immediately apparent, well-chosen cause marketing can boost brand value.
Companies must spend CSR funds properly, whether mandated or not, rather than treating them as a sign-off item for the chief financial or human resources officer, who may be tempted to give money to something that takes the CEO’s interest. Firms must assess their strategic fit. There is no way to sponsor every worthwhile cause. CSR initiatives, like commercial strategies, should create differentiated offers. Look for NGOs with similar missions to yours and consider how you may contribute value.
Here are some pointers for CSR initiatives:
Don’t just give money: Don’t just give money. Involve the company as a true partner, attend joint meetings, do regular progress assessments, implement some measures, and give useful suggestions for a more professional approach to administering the cause. Keep in mind that the NGO partner may not have the same level of expertise as your organization. This does not imply that you force your viewpoint on the NGO or that you micromanage its operations. It should be collaborative in nature in order to foster relationships and achieve better results. ‘Co-creation’ is the important word. However, if a goal calls for 2 crore and you only have 20 lakh, you can’t expect to have much say.
Set clear objectives and expectations: You can’t expect trust or proper execution unless they are clearly stated and all stakeholders are on board. It is best to explain all of these before to entering into a partnership agreement. It’s critical to be honest.
Make your business needs known to the partner: NGO partners should be aware that firms that donate money from their CSR budgets are genuine about the causes they choose, but they also have economic interests. The long-term viability of the cause being promoted will be jeopardized unless these criteria are addressed. Companies will, of course, want acceptable branding in all social programmes they do, which may be a thorny issue at times. The topic of how much brand exposure to get is one that will always arise.
Close the language gap between the NGO and the business: This discrepancy could pose a severe danger to proper execution because both tend to focus on different elements of the same cause. Many non-profits, for example, lack trustworthy data systems for tracking progress and developing acceptable metrics. They are also frequently shy when it comes to public appearances. What counts to them is doing good, regardless of whether or not it has anything to do with public relations or the rewards that might be gained. This is where corporate leaders may contribute, possibly by demonstrating how strong public relations can support the cause.