Corporate Social Responsibility (CSR) is the idea that a for-profit company should play a positive role in the community and consider the environmental and social impact of its business decisions. CSR is important for the businesses and the communities they serve. It has been observed that CSR activities also strengthen the connection between employees and companies, boost employee morale, and make both employees and employers feel more connected to the world.
Traditionally Indian CSR has been seen as a philanthropic activity. The culture of philanthropy is as old as India itself — voluntarism was part of ancient Indian civilisation. Indian philanthropy was never paraded; yet the expected-hierarchy of how modern-day donors — especially Indian corporate donors — behave leaves much space for better culture, faster pace of giving, and giving more.
Ethos of giving
The Enactment of Companies Act, 2013 by the Government of India was a pioneering effort of introducing CSR as mandatory, by imposing statutory obligation on Companies to take up CSR projects towards social welfare activities. This has made India the only country which has regulated and mandated CSR for some select categories of companies registered under the Act.
Has this improved the traditional Indian culture of giving? Not really. The formal Indian CSR has grown at 15% annually in the past seven years, and the companies have spent Rs 25,000 crore per year as CSR. On the flip side, there is much space for this to grow, as current CSR in dollar terms is just about USD 3 billion! Not a speck compared to Indian GDP of USD 3 trillion. No doubt, we need more businesses to come forward to give generously.
The ancient scripture, the Rig Veda, that dates back more than 5,000 years has a chapter devoted to charity. The centuries-old concept of 'daan' (giving) is practiced with many forms including volunteering and giving food, clothing and other materials. Some of these were kept alive with religious beliefs. With a poorer-than-potential social welfare framework and infrastructure, Indian society has always stepped in, for those in need in their extended family, friends, those from their known communities or even the unknown.
Modern-day giving
India has been experiencing a steady period of wealth creation as a result of rapid economic growth. While we have an aggregate national economic growth, we struggle with the increasing divide of haves and have-nots — something that a willing giving can assuage.
Cumulative donations across all categories of giving including corporates, HNIs and retail donors have grown almost sixfold in five years. Various charitable foundations and trusts with different societal objectives are being formed. Yet the current flow of funding to social causes is not sufficient enough. According to NITI Aayog, India needs to funnel approximately 13% of its GDP into social causes — the current average is about 7% — to achieve its United Nations (UN) Sustainable Development Goals (SDG) commitments by 2030.
Need for better behaviour
Data shows that CSR fund allocation focuses more on cities than villages. Typically the donor-corporates tend to contribute funds in the vicinity of their company location, or even the home town of the company founder. If you go back to Indian corporate history, there were hardly any differences between the company and the owner. The promoters did (or don’t?) not see themselves as different from the companies they founded. So the owner’s philanthropic activities were typically done through the company and there were no questions asked about company monies spent. Does this continue in modern times under the regulatory umbrella? Usually setting up a family foundation provides roles for family members who are not working in the business, and that helps in the social standing of creating a sense of purpose-identity, as well as promoter-family branding.
Currently the state of NGOs which actually do the hands-on-work on social impact, are at a hierarchial-disadvantage. A junior analyst of a donor is still perceived higher in hierarchy to a senior NGO leader. All because that money flow is determined by the donor. Can we shift the hierarchies to be equal partners and culturally embed these into human behaviour?
Historically the Indian ethos of giving used the adage “left hand should not know what the right hand is giving”, to mean confidentiality and to give respect to the recipient without embarrassing them. Yet corporates take pride in showcasing their ‘giving’. An act that’s supposed to help humans who don’t have access to better, but ends up as an act of self promotion. It forces the NGOs to play the “janaab, tussi great ho” to the donors. Why is any ribbon cutting ceremony needed? Why is any such pomp, show and tell, thank-you functions needed? Simply because the NGOs will grin and bear this, as they need funding. They are okay to play to the gallery of vanity-party & ego-boost-ceremonies, if it can open purse strings, even if it comes with bit of claimed-empathy.
Many corporates do understand that CSR is an act of giving, and not taking. Can other corporates not try to buy respectability? Can they not infringe on the dignity of those receiving? Can they not refrain from making a show of a simple humane act? Can they allow for respectability and satisfaction to lakhs of those who work in the impact sector, to transfer donor funding into daily living for millions of those recipients? Most of those working in the impact sector are paid a fraction of what they would make for a similar effort in the corporate world. Overall, civil society in India strives hard to work tirelessly towards accomplishing societal impact in serving disadvantaged members of society.
It is also time for the donor-corporates to figure out what they want to be known for. India has a rich tradition of giving as a part of cultural values, and embedded into its societal consciousness — for those who have something to spare, to give it to those who don’t. These were social ways of building an inclusive cultural attribute of day-to-day life.
But it is time. Time to move away from pompous philanthropy and creative CSR routes, to attempt signboard-free contribution and fanfare-free involvement. Let CSR be the art of societal impact, and silent giving. If at all you make a song about it, let it be to attract more donors to the cause, and not to parade poverty or not-having-something.
Dr Srinath Sridharan is a corporate advisor and independent markets commentator. Views are personal. He tweets at @ssmumbai
