As India completes this seventh year of its unique experiment in mandatory corporate social responsibility (CSR) investment, it is a good time to reflect on what we have learned about how CSR programs can achieve social impact. Today, CSR represents a growing pool of philanthropic capital in India, with the potential for greater impact.
Some companies are going above and beyond: A KPMG report shows that 22 of the top-100 companies spent even more than the mandated amount on CSR in 2016-17. And recent amendments to the act, such as mandating the transfer of unspent CSR amounts to a government-specified fund, will only increase the overall CSR pool in the future.
Bear in mind, however, as the 2018 high-level committee on CSR notes, the true value of mandating CSR isn’t the money that is contributed; it’s the demonstrable outcomes for society. In a recently released playbook—based in part on insights from interviews with eight Indian corporates that have achieved significant impact with their CSR giving—our Bridgespan team provides practical guidance for building high-impact CSR programs. First and foremost, an effective CSR program, like a good business, depends on strong leadership: the presence of a motivated leader with a passion for social impact, coupled with strong support from corporate leadership. “Our foundation could not have achieved significant impact if our founder and former managing director, Narotam Sekhsaria, did not have his initial vision and passion for being seen as a positive neighbor by society,” says Pearl Tiwari, director and CEO of the Ambuja Cement Foundation.
In addition to this sort of strong corporate leadership, we identified seven points of practical guidance that can be replicated by other corporates in India.
1. Focus on fewer impact priorities that align with corporate strengths. Spreading CSR resources across many small programs can dilute meaningful impact, much as spreading corporate resources across multiple business lines often constrains business success. Strong CSR programs identify a small number of priorities, and map them to long-term flagship programs or grant partnerships, enabling them to channel more substantial commitments toward more meaningful and sustainable impact.
2. Prioritize marginalized populations within existing programs. High-impact CSR programs prioritize marginalized communities within their existing programs by explicitly articulating their areas of focus—such as scheduled castes/scheduled tribes, women, or people with disabilities. In addition, they either directly build trust with these communities or build partnerships with NGOs that have developed social capital with the marginalized populations.
3. Embrace a participatory approach with communities and NGOs. Much as successful businesses listen to the voice of their customers, high-impact CSR programs place their constituents at the center of their work. They engage with NGOs and communities across program design and implementation, and actively encourage their participation.
4. Partner with other corporate and private philanthropies. CSR programs can strengthen their work and scale their impact by partnering with other philanthropies, drawing in smaller funders that may not otherwise have had the ability to allocate philanthropic capital effectively, and creating a multiplier effect.
5. Harness corporate assets, competencies, and connections. Strong CSR programs leverage their corporate assets, competencies, and connections in non-commercial yet strategic ways to strengthen the impact of their giving. Beyond writing a check, corporates can offer their CSR programs valuable competencies, such as project management, technological skills, and other specialist capabilities.
6. Hire a professional CSR team, champion CSR from the C-suite, and give CSR strong board governance. High-impact CSR programs hire professional CSR teams that bridge corporate and social sectors, and create advisory boards with expertise that complements their corporate boards. Also, a successful CSR program, like a good business, is incumbent on strong leadership—ideally, supported by a CEO who is passionate about achieving social goals through CSR programs.
7. Institute measurement, learning, and communication strategies tailored for different stakeholders. Corporates can apply the same reporting discipline to their CSR initiatives as they do to their core businesses. By measuring the right things, learning from the results, and communicating with stakeholders, they shape future activities and investments for the better.
The COVID-19 pandemic has underscored the importance of focus and making fast decisions, of forging strong partnerships with communities and NGOs, and of leveraging corporate assets to help communities. In the years ahead, CSR has the potential to play an even more important role in addressing some of India’s most pressing problems. Some of the strongest CSR programs have already demonstrated how this can be done, and the tactics and mindsets needed. As Sudha Murty, chair of Infosys Foundation, told us, “You shouldn’t do CSR because you are supposed to do it, you should do it because you want to do it.”
