Over the years, the face of corporate philanthropy in India has experienced a significant change. An activity that was once restricted to a ‘donor-recipient mindset’ has now evolved into a function involving the active participation of corporate houses.
To bridge inequalities in society through value-based Corporate Social Responsibility (CSR), more and more corporates are associating with credible civil society foundations, investing time, technology and knowledge in activities that are deemed more sustainable. Per the 2013 amendment to the Companies Act, organisations are now required to inculcate a positive CSR culture to address deep-rooted social inequities, ranging from rampant poverty, malnutrition, inadequate access to education and high infant-mortality rate to pollution and agrarian crises.
Results from a Cone/Echo Global CR Opportunity Study show a shift in perceptions regarding the role of corporate houses, with 36 per cent of Indian consumers believing that the role of business is not just to maintain a consistent economic climate but to also advocate for change. But although the CSR mandate has allowed businesses to set up their philanthropic arm and go beyond the culture of signing cheques, not everyone might be equipped to see things to the end.
‘Wealth is not new. Neither is charity. But the idea of using private wealth imaginatively, constructively, and systematically to attack the fundamental problems of mankind is new.’
– John W. Gardner, Former Secretary of Health, Education, and Welfare (HEW) for the United States
Businesses need to understand why there is a change in the trend from working ‘for’ the community to working ‘with’ the community. Furthermore, they need to have the necessary bandwidth to undertake welfare activities because this would require (i) building necessary infrastructure, (ii) channelizing funds to hire and train employees, (iii) ensuring the availability of relevant conflict resolution practices, (iv) ascertaining the risk of working with outdated governing documents (which would pose governance and transparency issues), and most importantly, (v) asking the hardest questions and doing the groundwork to provide a panacea for the same.
With CSR transforming in India from an auxiliary concept to a strategic practice, which stipulates the need for adequate ground-level expertise, there is immense potential for Non-Profit Organisations (NPOs)/Non-Governmental Organisations (NGOs) to partner up with corporate houses and act as catalysts for social change. Possessing unique traits that transcend typical philanthropic wings of for-profit organisations, NGOs have stronger ties with communities and can efficiently identify goals that would align with business visions, while also advising on long-term solutions. A successful partnership between both sectors promises authenticity and commitment to advancing the social impact.
As the very definition of philanthropy is being rewritten to become a more inclusive social contract between business and communities, there is an urgent need to find credible implementing partners who have a relevant policy and program expertise, higher standards of risk mitigation, and who hold a greater degree of command over community mobilisation. However, any partnership with NPOs is marred by a dated mistrust between businesses and non-profits. Ranging from corruption allegations to financial mismanagement and lack of credible visibility of impact, this ‘history of mutual suspicion’ between both sectors demands a system that prioritises transparent operations in a context that deems accountability essential.
Non-profits play a diverse role in the socio-economic development of a nation by aiding government programs and providing services to marginalised populations. Embodying a voluntary character and a nonpartisan status, these foundations work as private entities involved in a public cause by tackling problems at the grassroots level. Their responsibility to the people can be expended only when they display effectiveness through transparency and by following good governance practices. By adopting a predefined policy of transparency, NPOs will be deemed accountable, thereby eradicating negative stereotypes about the social sector.
There are multiple benefits to acquiring and maintaining a culture of financial transparency in NPO operations, and the most essential one is that it signifies the organisation’s ability to adopt sound management policies that would ensure accountability.
Since most social sector activities align with business operations, enhancing impact visibility through partner and beneficiary testimonials can help strengthen trust with all stakeholders—from businesses to governments to communities. It is the best way to pave the path to successful partnerships between corporates and NGOs.
Successful cross-sector partnerships that embody the knowledge base of non-profits and the operational efficiency of corporates can have a three-tier impact:
- Enhanced understanding of the effect of businesses operations on society
- Leveraging assets to bridge the gap between businesses and communities
- Efficiently tackling social concerns so that an inclusive and equal society can see the light of day
By drawing on the strengths of each other, a compelling corporates-NGO collaboration can help increase global growth potential while also creating a ‘legacy of equity and prosperity for all.’
Shridhar Venkat is the CEO of The Akshaya Patra Foundation.