Topic: CSR, Corporate Social Responsibility
5097 companies during the 2015-16 period, as per our analysis, earmarked INR 9822 Cr as their CSR budget. India is the first country in the world to make corporate social responsibility (CSR) mandatory.It required companies of certain size to spend 2 percent of their average net profits of three years on CSR.
Issues relating to the handling of the money and eventual impact trace have also resulted in various non-compliances. However on the other hand, there have been people and corporates who do not even fall in the “size” classification passionately opening their purse strings for various causes including the current Covid-19 donation to PM Care Fund
The Big opportunity
The INR 10k Cr above plus another 3-4k Cr which others will contribute makes it a sizeable kitty for India, in addition to the Govt funds, to meaningfully invest in education, poverty, gender equality and hunger.
- A not for profit CSR body which control India’s CSR funds through a public-private partnership (20% Govt nominees and 60% corporates, 20% independent professionals who are regarded for their selfless work)
- The board will change every year with different corporates/others getting a representation.
- The mandated organizations plus all others who want to contribute to any of the chosen areas can make their contribution through this central body.
- This body will have a certified list of purposeful NGOs (based on their track record, ability, people involved and overheads) One of the biggest issues here is the NGOs’ cost structures, which takes away almost 50% of the money. This cannot be the case.
- The entire fund to be traced to the last beneficiary through block-chain based technology.
- Third party audits and additional checks and balances to even mitigate the remotest possibility of beneficiary dual reporting, etc.
- The governing body to provide the invested companies with regular updates and those companies, in addition to contributing on implementation, can even ask for any scrutiny as they deem fit.
- The body before leaving office during the particular year closes the books for that year and/or hands over the remaining implementation to the new board.