Thousands of companies have been contributing to the society through their Corporate Social Responsibility (CSR) arms and foundation by spending CSR funds towards social development. The Companies Act, 2013 has put CSR in the forefront, with a ‘comply or explain’ mandate, for companies that have more than Rs. 5 crores as net profit for a year. This mandate has thus opened new doors for Indian Non Profit sector and NGOs, and has provided a huge opportunity to be tapped.
But not many NGOs and non-profit organisation have been able to take advantage of this opportunity, and thus many still do not have access to CSR funds, because of a number of reasons like lack of initiative, little understanding of the scenario and CSR ecosystem, no network, no use of cutting age technology and social media etc.
What is CSR?
CSR is a strategy that seeks to systematically integrate the economic, environmental and social impact of business into the management of business, with the vision to make the future better or at least sustain it at the present prevailing condition.
The companies with a net worth of over Rs. 500 crores, or a turnover of over Rs 1,000 crores, or a net profit of over Rs. 5 crore in the preceding financial year are required to spend 2% of their average net profit of the preceding three years on CSR. The companies are liable to disclose the CSR related details in the Director’s Report every year.
Size of CSR Funds
Companies in India have spent over Rs 50,000 crore on Corporate Social Responsibility (CSR) works in last 5 years. Companies Act was amended in 2013-14 making it mandatory for companies with a specified level of profit to spend 2% towards social welfare. The corporate sector has set aside over Rs. 10,000 crore every fiscal year since 2014-15 towards corporate social responsibility. Maximum funds have been given to projects for poverty alleviation, safe drinking water, education, health etc.
CSR for Sustainable Development
Government, the business sector, as well as civil society and the public, all have an important role to play in achieving the global Sustainable Development Goals (SDGs).CSR is a strategy that seeks to systematically integrate the economic, environmental and social impact of business into the management of business, with the vision to create a better future. Mandatory CSR is an attempt by the government to involve business entities in accomplishing the nation’s sustainable development goals and to supplement government’s efforts in this regard through monetary contributions. Sustainable development is “development that addresses the present needs without undermining the ability of future generations to meet their own needs.”
Statutory requirements for NGOs
Most of the corporate donors donate only to those NGOs which have certificates like 80G registration (Provides 50% Income Tax exemption to the donor), 12A registration (Tax-free income for NGO), apart from NGO Registration certificate. It is in the best interest of the NGO to get these registrations done to increase the chances of receiving funds. Foreign companies may donate funds only if the NGO has an FCRA (Foreign Contribution Regulation Act) registration. Ensure that your NGO has all the documentation in place, and do not forget to renew these every year.
Map and understand the corporate CSR in your area of work and expertise
Map the existing company’s social development works in your area of work and location. Start by understanding the organisation’s profile, business preferences and CSR and Sustainable Development policies. Try to find out whether they are already undertaking some activities under CSR and future plans. And then finally, plan a meeting with the CSR leader to understand about the opportunities of mutual interest in detailed manner.
Start building a network
Networking is key to success. Networking works in social sector. NGOs need to step-out and explore the various possibilities for funding and collaboration. CSR forums are being organised by many agencies devoted for CSR like India CSR Network. These forums provide a very good platform for active participation, networking with prospective donors, and building relationships. These may result in fruitful associations in the long run. Attending CSR forum will provide you deeper understanding of the sector and key developments.
Keep your profile ready, have digital presence
Apart from the legal documents, corporate donors also look for authentic evaluation reports, impact data, and third-party evaluations to ensure that NGO is credible and known, and is doing outstanding work in its field. Make sure to keep the documentation up-to-date. Your NGO profile and works must have a digital presence and which should be readily available to access for key people and decision makers of CSR sector. Credible organisation like India CSR Network offers technology enabled services to the organisations of the social sector and corporate organisations on how they can improve their digital presence to attract CSR funds.