Ground rules for undertaking CSR activities in India

The enactment of the Companies Act of 2013 has completely transformed the CSR landscape in India. The revolutionary act mandated companies, fulfilling specific criteria, to carry out CSR activities in India. While there are some companies whose CSR initiatives predate the enforcement of this law, however, this act has radically altered the way the social sector is looked at by making CSR an indispensable part of the business discourse. Besides mandating CSR, the act has played a pivotal role in ensuring its own compliance by incorporating key provisions of monitoring, evaluation, and annual disclosure.

For starters, the act has made it compulsory for a company with either a net value of 500 crores, a turnover of 100 crores, or a net profit of 5 crores, to devote at least 2% of their net profit on CSR activities in India. And it is not all about pouring money in some social welfare. It is equally essential for these organizations to create functional CSR strategies while simultaneously overhauling internal systems that can decisively turn those visions into reality.

It is important to be acquainted with one’s proficiencies and shortcomings when taking actions to turn things around. This is the reason why companies undertaking CSR activities in India should have a prudent vision to visualize needs and outcomes and plan the execution of initiatives accordingly.

The probability of errors and omissions increases significantly when the initiatives are based on desired outcomes. However, the case is entirely different when initiatives are based on well-researched facts and figures. Some of the factors to be taken into account while doing the groundwork for CSR initiatives are mentioned below.

Determining the right partners
Forging and cementing a working relationship with NGOs is one of the ways through which an organization can get the intrinsic knowledge of the area that one intends to cater to. Although, the big corporations have the capital, they are more or less oblivious to the problems affecting the lower strata of the society on a regular basis.

This is exactly where the role of a CSR-CSO consulting company comes into play. |In spite of limited financial resources at their disposal, they are well versed in dealing with the problems of the society. Corporations can integrate themselves with the community that they intend to serve by tying up with local CSOs.

Monitoring of progress
Efficient tracking is critical to comprehend the progress being achieved as well as to determine the distance to be traversed to reach the ultimate goal. Parameters must be set to specify the short-term and long-term goals so that they can efficiently map out their progress. It must be noted that while short-term goals are easier to achieve, long-term impacts are the true indicators of a successful CSR campaign.

Data collection
Data collection is an essential factor in mapping the progress made in achieving short-term and long-term CSR goals of an organization. Data collection revolves around mapping fields relevant to the need assessments and is pivotal in zeroing in on the direct beneficiaries of the CSR strategy. These beneficiaries could be impacted by CSR activities in terms of healthcare, primary, secondary and higher education, skill training and the environment where they live.

Quality analysis
Post data collection, the Qualitative Analysis is the next step to classify data in terms of criticality levels. Statistics collected on the needs of a community must be classified on the basis of their criticality to the community. For instance, a playground might be needed for the holistic growth of children of a community, however, precedence must be given to a maternity ward if the community has high maternal and infant mortality rates. The aforementioned illustrates the importance of analysis while undertaking CSR activities in India.

Output to Impact
It must be thoroughly studied whether the intended intervention for the community is feasible and financially viable within the stipulated budget or not. The outcomes must be measured against long-term impacts. Only when outcomes transform into long-term social impacts, an organization can claim CSR activities in India as effective and everlasting.