By Rusen Kumar
CSR in India has come a long way since the early 20th century during which business houses such as the Tatas and Birlas established charitable foundations and trusts to contribute their mite to society. Redefining the same culture of giving back from voluntarily to mandatorily frameworks, we got our CSR Act in 2013, with a vision to make contributions in Indian Development a practice. The CSR Act has been a trail-blazer in sustainable development. India, which is a huge market for Bottom of the Pyramid (BoP) based innovations and impact investment, is the first country to make CSR spending compulsory. Especially the city of Bangalore has been setting new standards every year when it comes to contributions and creating impacts. Corporate giants like Wipro, HAL, Tatas and Infosys have been taking up the baton for philanthropy in the city for a long now.
The analysis of CSR funds, done based on the data from the Ministry of Corporate Affairs, shows Wipro NSE 0.64% (Rs 596 crore), Infosys NSE 2.35% (Rs 416 crore) and HAL (Rs 103 crore) have been the top three contributors in Karnataka. The state contributes to 9% of the total CSR funding in India. About 3,588 companies in the state (again 9% of all companies in India) participate in the CSR initiatives. Indeed, the potential of spending and contributing is immense in terms of monetary and manpower resources.
But even after being the most crucial dimension of ensuring sustainable development for the nation, often the Corporate Social Responsibility (CSR) Sector in India suffers a dearth of Rigor, Accountability, Detailing of Matrixes or even the Talent, which is surplus and taken for granted in corporate sectors. Even coming out as an offshoot of the corporate world, the CSR domain somehow goes lethargic in mapping these crucial parameters.
It has been 75 years of independence that we could get this momentum of progress and development and we cannot afford to spend another 75 years to bridge the gap and ensure sustainable development. The dire need is to bridge this gap and the time is now to act. Funding remains the core solution to these problems, depending on one format of funding, scarcity of funding, or even monopoly of the funders shall hamper the momentum of the progress we aim till 2030. We need to make quick and fast track changes to be implemented in the funding scenario next decade, if not in 50 years, to maintain and sustain the momentum of impact we have created by far.
An important perspective to change the funding scenario in Indian CSR shall be investments through startups. While giants like Infosys and Akshay Patra have been making principled and adequate contributions in CSR, we need to tap the latest gamut of stars in the galaxy, our startups. India has the third-largest startup ecosystem in the world with about 60,000 startups. In total, more than 61,400 startups have been recognized in India as of January 10, 2022.
With Indian startups raising around $42 billion in India, today, one out of 13 unicorns globally is born in India. With this huge amount of wealth accumulation in the very early stages of life and profession, startups funding the CSR bucket are sure to change the game. So, the suggestion was to tap not only CSR funds but funds from Unicorns, Startups, Venture Capitals for creating and sustaining impact.
And typically, these were the reasons, that in the year 2021, Prakash started leading the ACT Grants. Prashanth Prakash very interestingly calls Act Grants ‘Baby of COVID’. Prashanth Prakash, co-founder and partner at Accel, has been a protagonist to launch and facilitate blended capital funds for the impact sector. Through his innovative ACT Grants, He has been advocating blends of funds like equity capitals, CSR funds, venture funds, and other non for profits and for-profit funds to be amalgamated to change the way of funding in the impact sector while also giving 10x leverages.
Prashanth teamed up with other venture capitalists, private equity investors and startup executives to form the ACT Grants, an Rs. 100 crore Covid-19 relief fund centered around new-age technological innovations. It provided financial support to fledgling startups working on products and services to combat the pandemic and gave grants ranging from Rs. 20 lakhs to Rs 1 crore.
The focus of the ACT grants was on sustenance and saving lives, through leveraging technology. Act Grants came into being when the need was dire and time to regret was not possible. Act grant was a success as it had a team and design of passionate and fervent ideas and professionals. About 70 to 100 volunteers from these VC firms look actively looking at various proposals pro-bono to carry out diligence and present it to the investment committee that met almost every day.
Today apart from focusing on hardcore healthcare support, ACT Grants caters to Education, Environment and Women Empowerment initiatives too. While each vertical has separate funds dedicated to it, Act Grants very appropriately be called as a practical demonstration of ‘Power of the Collectives’.
Through Act Grants, Prakash has facilitated 100+ scale companies, startups and unicorns to come together and very transparently directly fund FPOs, SHGs, or small Enterprises of their interests. This shall surely accelerate the impact.
Another flagship innovation of an altruistic thought was his Young Indian Philanthropic Pledge (YIPP). Hailed and acknowledged for its unique and selfless mission, YIPP urges young unicorns to come forward and pledge a minimum of 1% of their wealth towards the welfare of the people. Yet again, reviving the old rooted culture of philanthropy and giving back, YIPP calls on in ‘New Kings and Queens’ of India to pledge and reinforce the development. Developed with passion, and carrying on with equal momentum, YIPP is set to have its first set of 25 members very soon.
Prakash recently addressed to Assocham CSR summit last month in Bengaluru draws in a red line to reiterate that it’s high time we come together and re-invent the funding scenario for creating impact. According to him, “We have to bring key aspects of business into philanthropy, like ROI [return on investment], deeper scrutiny of systems and setting up metrics for results instead of being content with just making donations. As after 75 years of Independence, if the country is fast-tracked for every dimension, then why not CSR and why not Impact?”
About the Author
Rusen Kumar is a well-known thought leader in Corporate Sustainability & Responsibility (CSR in India. The is the managing editor at India CSR.
