Over the past decade, I have watched the admirable, at times controversial, but ceaseless march of corporations and philanthropic foundations to ‘do good’ in India, and to do it well. It’s been accelerated by changes to the Indian Companies Act, which mandated that 2% of the average profits of a company be invested in CSR.
Of course, prior to the CSR law, there already was a core group of visionary corporations and foundations investing in community development in India. Indeed, India can proudly lay claim to being one of the birthplaces of modern corporate philanthropy, through the visionary leadership of the late great JRD Tata. The best example that comes to mind is of the early Tata Steel television advertisement which signed off with the tagline: ‘We also make steel’.
From my very first job in the world’s largest youth leadership organization AIESEC, I understood the need for CSR, and understood why it was in the interest of any business to be a responsible citizen in society. As a business management student, making profits and doing good didn’t seem at odds to me at all. Indeed, it made sense to do good if you wanted to earn greater profit, as succinctly articulated by John Elkington in 1994 when he coined the ‘triple bottom line’ accounting framework for companies — people, planet and profits. Surprisingly, there are still far too few corporations that see this with the clarity it requires.
Over the past several years working at AIESEC and now at Quest, I have worked closely with several visionary CSR thinkers and practitioners who represent corporations. With the amendments to the Companies Act, there is a lot more funding flowing into CSR initiatives. More and more NGOs and social enterprises are coming into the mix. The need for collaboration among corporations themselves as well as between corporations and civil society has never been greater. Indeed, now it is mandated by the law. The big question is, how can we as diverse stakeholders capitalize on this serendipity and really amplify our impact?
At Quest, I have been fortunate enough to build partnerships with some of the world’s leading corporations and foundations. As part of researching this piece, we engaged several of them in a candid conversation. What follows here are some of our collected learnings.
Invest in Innovation
“Almost every sector we work with is ripe for disruption, especially digital disruption. Education and Healthcare are two areas where innovation through technology can bring transformative change. The question is how can we create innovations that are then integrated with government programs to ensure they scale” – Murugan Vasudevan, Head, South Asia, Social Innovation Group, Cisco
Capital investments in innovation are as important in solving social challenges as they are in solving technological or business ones. The news in India these days is dominated by the growing list of startups attracting immense venture funding. The question that we as practitioners in the development sector need to ask in ever louder tones is why funding for innovation is not flowing in with the regularity and volume that is required. Without adequate, long-term funding in research and development, much needed innovations by nonprofits and social enterprises will not see the light of day.
The harsh reality is that corporate funders and foundations alike are not making anywhere near the kind of investments into nonprofits that will allow them to experiment, fail fast but also build tools, knowledge and resources that accelerate the process of change.
Balance short-term & long-term goals
“At Accenture, we evaluate the requirement of not just the present but take into consideration the future — our efforts to equip youth with the right skill sets to keep pace with the job market see us investing in new courses, training materials and “innovations — Kshitija Krishnaswamy, Director Corporate Citizenship, Accenture India
A pragmatic approach with the right dose of visionary thinking is required to maintain the delicate balance needed to meet short-term goals, but not lose sight of the bigger challenges at hand. Nonprofits must recognize that there is a need to show short-term results and visible impact from investments they receive. This continues to be one of the enduring gaps between how nonprofits view impact versus their compatriots in the CSR sector.
The demands of compliance and impact reporting each quarter and an annual review of the performance of the investor’s ‘portfolio’ is standard practice in the corporate world, and nonprofits need to ask themselves why similar standards should not apply to them. The creation of frameworks for evaluating impact should be pursued through meaningful dialogue between corporations and nonprofits.
However, the need for this continuous evaluation framework is imperative to establish ‘investor confidence’ especially in areas where impact is often not immediately quantifiable. More investments need to be made in monitoring systems and technology tools that will provide regular updates on how far the needle has moved.
Corporations too must be willing to reboot on the lens they apply in determining what impact really means in complex socio-economic environments where cause and effect are seldom black and white. An effort to educate their decision makers, chairpersons and CSR committees should be pursued by CSR representatives on the need for alternative evaluation frameworks when it comes to investments in social impact. Only by balancing both long and short-term goals will lasting change become possible for any social impact endeavour.
Coalition building is essential
“We need to find a way for people to understand that they need to ‘let it go’ for the greater good. They need to let go of what they have produced so that we can create an ‘ensemble’ to do something bigger and better for everyone.” — Clement Chauvet, Chief, Skill and Business Development, UNDP
“It’s a really big opportunity. A lot of organizations are proactively thinking about solutions and one of the challenges is duplication of efforts. In the social impact space, companies which are traditionally competitors can take the opportunity to collaborate in a real way, and learn from each other.” — Maryam Ghofraniha, Head of Global Partnerships & Welcome Talent, LinkedIn For Good
Unequivocally, CSR representatives speak with one voice when it comes to working together with their peers, forming coalitions and collectives to influence government policy, and sharing resources. However, walking the talk is much more complex and requires sincere commitment and a ‘roll up your sleeves’ attitude. Nonprofits too need to do their bit to bring more corporations together at common forums and chart avenues for pooled investments. Too often, there is simply not enough time and bandwidth on the part of CSR teams to bring their peers together and hammer out formal agreements. However, this should not stop us from continuing to try.
While our paths to the final destination may be different, convergence at critical points to share resources, learning areas and knowledge will result in a stronger practice and perhaps a shorter journey to reach our common destination. What is infinitely clear is that no one entity will be able to solve the challenges facing youth in India today.
Trust is key
“We just have to trust each other! We must learn as we go and accept that we may fail at first. We can sit at our desks and develop the best blueprints for success but when we put them to the test and find our assumptions are wrong, we shouldn’t be afraid to go back to the drawing board and start over together”. — Manju Dhasmana, Lead, Community Affairs/ Philanthropies, Microsoft India
Finally and perhaps most importantly, developing greater trust between corporations and nonprofits will continue to be key to achieving all that I have spoken about. Without establishing an open, candid and transparent relationship, companies, foundations and nonprofits will always struggle to find real, long-term solutions to their common issues.
Nonprofits must do more to invest in good governance frameworks and capacity building of their staff. World-class governance structures among nonprofits will result in greater funding and deeper trust with their funders. More investments in technology to monitor impact and improve financial management is also critical. Too few nonprofits today make investments or negotiate for funding in these areas. These may seem hard to do but are essential to scale operations.
CSR representatives on the other hand often adopt a cut-and-dry approach to assessing performance of nonprofits and their impact. Investments by way of time spent among the stakeholders that they are investing in is critical. Understanding the myriad challenges that nonprofits face when attempting any intervention takes time and regular interaction with a diverse group of entities and people. This will also help corporations understand the need for innovative program designs to create social impact. Eventually, an earnest commitment to follow through on all the above does result in lasting relationships forged through mutual respect and consideration.
Abhijeet Mehta, Associate Director, Quest Alliance
This is part two of Abhijeet’s Mehta’s series of posts on the importance of partnerships in the development sector. You can read part one here.