The CSR spending in India has seen a surge at CAGR of 14 % in the last two fiscal which is a promising sign despite having only 5% growth in their net profit. However, the majority of the corporates had taken the help of NGO’s for CSR spending it also means internally companies had deployed minimum resources to monitor their CSR activities. Perhaps post amendment of companies acts in 2013 business houses ever since has shown good compliance prescribed by the law. But in a larger country like India problems are galore in the areas of healthcare, education and the environment. Hence, CSR funds could only account for a mere 1% of the total public spending in 2015-16. The spending model of CSR funds in India are generally are programmatic grants. So in the hindsight to make a meaningful progress in CSR spending the very nature of their involvement needs to be evolved further to create a better impact.
Need for a participatory approach
Generally, the CSR spending trend in India needs to get evolved from individuals to an Ecosystem where corporates can play a very proactive role in creating visible changes and perceptible impact on the problems faced by the society. In order to create a larger impact, the existing model of CSR spending need changes and corporates should take serious initiative internally if they really want to create a meaningful impact in the society. Instead of being just grant givers, corporates should transform themselves from delivering services to building capacity & enabling the market for overall development. The participatory approach should be a continuous affair whereby companies should constantly engage with various stakeholders in the society and ensure that measurable output is generated through their engagement. Also, business houses internally should set an objective and drive those objectives meticulously similar to the ways how their business is been driven.
Become a catalyst for development
1)To become the catalyst for development, the companies in India should take various steps
2) Better use of resources and leveraging it effectively to create a better impact.
3) They need to establish better synergy between various players for the desired impact.
4) Bring in new stakeholders to the system and gain more competencies from them.
Promoting socially responsible business
Corporates should take a keen interest in promoting micro-entrepreneurs in the community, helping the people with financial support in starting a small business that could create a multiplier effect in the economy. So forging such useful long-term association can help improve the situation on the ground. Henceforth corporates in India should focus more one such aspect frequently rather than just becoming grant givers. The synergy between the various stakeholders in the society would help to create a win-win situation for all.
Importance of shared value creation
Beyond the corporates’ pet projects and largely advertised philanthropic activities, it only helps to improve the branding of the company and leaves very little to create an impact in the society. So beyond the objective of building a company’s brand, The active involvement in the society can only be achieved through “smart partnering “. Only through smart partnering creative solutions and strategies can be devised to address the very fundamental core issues faced by the society. The successful smart partnering initiative from HUL named “Project Shakthi” was a very good initiative that had empowered the women folks in the rural sector by providing financial independence and have helped to achieve self-reliant.
Strengthening the core values internally&externally
Business creates impact, So it does matter how an organisation lives up to its core values extrinsically and intrinsically in relation to the society and vice-versa. How far corporates leaders are serious in practising those professed values in all aspects, Besides making profit business as an entity has a social commitment to the society or towards the community it operates. So it does matter the seriousness in which companies have aligned those core values to the overall development of the society. The whole aspect of doing business through the prism of generating value to shareholders should be replaced with a much more sanguine way of taking every other stakeholder together.
Engage the entire workforce and lead by example.
When it comes to CSR, the workforce of every organisation is very crucial in bringing maximum benefits to the society. When it comes to employees they choose an organisation whose values resonates with them.It also helps in retaining existing as well as attracting fresh talents towards the organisation. Besides that activity that encourages the core values helps in improving the motivation level of employees which further leads to foster innovation and creative thinking in many spheres both inside and outside of the organisation.