Effective use of Financial Funding: Corporates know best?!
Finance is
essential for NGOs. With CSR, NGOs were hopeful. But the language both speak is
different, with relation to reasonable overheads, sustainability, beneficiary
needs, organizational capacity building. We posed the debate to 4 sector
veterans. By Pradeep Mahtani
essential for NGOs. With CSR, NGOs were hopeful. But the language both speak is
different, with relation to reasonable overheads, sustainability, beneficiary
needs, organizational capacity building. We posed the debate to 4 sector
veterans. By Pradeep Mahtani
While
corporate giving has been part of corporate DNA for decades now, the recent
“forced philanthropy” via CSR has enormous possibilities, but corporate vision
is blinkered by five constraints.
corporate giving has been part of corporate DNA for decades now, the recent
“forced philanthropy” via CSR has enormous possibilities, but corporate vision
is blinkered by five constraints.
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Geographical –
Corporates prefer to implement CSR programmes close to their work-site
resulting in numerous corporates working with the same NGOs. This continues to have
increasing disparity between comparatively developed geographies and those
neglected.
Programmatic –
Corporates prefer
working to supply goods – outcomes that can be seen, counted easily: toilets, piped water etc.
No sense of ownership among beneficiaries, often builds a feeling of dependence
& entitlement in them.
Corporates prefer
working to supply goods – outcomes that can be seen, counted easily: toilets, piped water etc.
No sense of ownership among beneficiaries, often builds a feeling of dependence
& entitlement in them.
Time horizons –
Corporates speak a language (3-5 years is the long term) that is far different
from the development sector. Attempting to bring about sustainable changes in a
time frame is something that all NGOs have sadly learnt to pretend they plan to
achieve. Reportage at the end of every year has to be shareholder-friendly and
meant to cater to “optics”. This places undue and unfair pressure on the
development partner to deliver irrational behavioural outcomes.
Corporates speak a language (3-5 years is the long term) that is far different
from the development sector. Attempting to bring about sustainable changes in a
time frame is something that all NGOs have sadly learnt to pretend they plan to
achieve. Reportage at the end of every year has to be shareholder-friendly and
meant to cater to “optics”. This places undue and unfair pressure on the
development partner to deliver irrational behavioural outcomes.
Organisation
size – Despite the fact that large NGOs have
proportionately large overheads, corporates prefer them as they have a
familiar, corporate-like culture.
Smaller NGOs may do excellent work, but fail to provide slick
presentations, well-formatted reports, and conduct jargon-laden conversations.
Smaller NGOs will continue to languish unless corporates learn more about the
development sector.
size – Despite the fact that large NGOs have
proportionately large overheads, corporates prefer them as they have a
familiar, corporate-like culture.
Smaller NGOs may do excellent work, but fail to provide slick
presentations, well-formatted reports, and conduct jargon-laden conversations.
Smaller NGOs will continue to languish unless corporates learn more about the
development sector.
Investing in
NGOs – NGOs could benefit by putting their people through
training, but is hardly supported. Corporates provide their employees with all creature
comforts, but suggest that an NGO should have comfortable offices and the
corporates question the credentials of the “social workers”.
NGOs – NGOs could benefit by putting their people through
training, but is hardly supported. Corporates provide their employees with all creature
comforts, but suggest that an NGO should have comfortable offices and the
corporates question the credentials of the “social workers”.
Corporates
should spend more time to understand what the development sector has to say –
even if the language is not exactly music to corporate ears.
should spend more time to understand what the development sector has to say –
even if the language is not exactly music to corporate ears.
Lt Col AV Paranjape (Retd)
MBBS MD, Executive Director, Community
Aid and Sponsorship Programme
Aid and Sponsorship Programme
CASP
has sponsored more than 100,00 children across India in the past four decades to complete
their education. It works in Maharashtra, Delhi, Gujarat and Kerala.
has sponsored more than 100,00 children across India in the past four decades to complete
their education. It works in Maharashtra, Delhi, Gujarat and Kerala.
__________________________________________________________
CSR giving isnot new in India. However, the mandatory giving from a company’s
profits, is. Introduced in 2012-13, it seemed like a blessing in
disguise for NGOs eagerly looking for funds for their projects. The
Companies Act 2013 Schedule VII makes the areas to be funded very
clear. Workshops across the country are being held by government to
help companies understand the finer points of the Act. How, for
example, welfare of the company’s employees cannot be counted as
CSR nor can volunteering during office time be called CSR.
Companies are
wary of extending grants to NGOs even when their projects fall under
the purview of Schedule VII. They fear that NGOs are not
professionally run, especially their accounts. So, companies tend to
favour national level ‘branded’ NGOs and rush to fund them
liberally and unconditionally. They establish their own foundations,
prefer funding infrastructure (school buildings, toilets etc.) and do
not support operational costs.
wary of extending grants to NGOs even when their projects fall under
the purview of Schedule VII. They fear that NGOs are not
professionally run, especially their accounts. So, companies tend to
favour national level ‘branded’ NGOs and rush to fund them
liberally and unconditionally. They establish their own foundations,
prefer funding infrastructure (school buildings, toilets etc.) and do
not support operational costs.
Since the
debate is more about small NGOs and CSR partnership, companies with
their vast experience and skill, can play a constructive role by
coaching NGOs and developing them to become more professional, build
their capacity for accounting, raising funds, doing good work
properly evaluated, monitored and reported. They can also help them
scale up. Insistence on due diligence could be a starting point.
Involving them as partners in the decision making process is the
other.
debate is more about small NGOs and CSR partnership, companies with
their vast experience and skill, can play a constructive role by
coaching NGOs and developing them to become more professional, build
their capacity for accounting, raising funds, doing good work
properly evaluated, monitored and reported. They can also help them
scale up. Insistence on due diligence could be a starting point.
Involving them as partners in the decision making process is the
other.
NGOs on their
part must ensure that their legal and financial compliances are in
perfect order. They should also be open to accepting constructive
feedback, and proactively seek to develop themselves.
part must ensure that their legal and financial compliances are in
perfect order. They should also be open to accepting constructive
feedback, and proactively seek to develop themselves.
Dr. Viney Kripal
Executive President, GREAT Foundation,
Pune
Pune
Former Professor and HOD/HSS/IIT
Bombay
Bombay
GREAT Foundation, Pune was
founded in 2002 by IIT-IIM professionals. It provides less privileged
students an equal opportunity for social and economic equity through quality
education. It has impacted around 45,000 students in 91 government/low income
schools.
founded in 2002 by IIT-IIM professionals. It provides less privileged
students an equal opportunity for social and economic equity through quality
education. It has impacted around 45,000 students in 91 government/low income
schools.
________________________________________________________
Whilethe style and sensibilities of NGOs and Corporate Foundations may seem at
counter-purposes to each other, I believe that both are fundamentally connected
by a common goal, viz. to create a difference in lives of people who need it
the most. It is therefore imperative that both drive towards a shared vision to
achieve maximum social good for the beneficiary.
The
way I see it, the Law, systems and processes are a way to ensure that both
entities remain focused and committed to achieve that goal. Also in a
rapidly changing environment, when every action and reaction is being
scrutinized with a hawk’s eye, it is important to de-risk the Foundation as
well as the Parent from any adverse outcomes or loss of reputation.
way I see it, the Law, systems and processes are a way to ensure that both
entities remain focused and committed to achieve that goal. Also in a
rapidly changing environment, when every action and reaction is being
scrutinized with a hawk’s eye, it is important to de-risk the Foundation as
well as the Parent from any adverse outcomes or loss of reputation.
For
both Corporate funders and NGOs to become truly impactful, passion needs to be
insulated from individual agenda; purpose needs to be guided by systems and
subjective decision-making needs to be reined in within legal boundaries.
both Corporate funders and NGOs to become truly impactful, passion needs to be
insulated from individual agenda; purpose needs to be guided by systems and
subjective decision-making needs to be reined in within legal boundaries.
While
this adds time to the process at both ends and calls for commitment of specific
expertise and resources, both CSR Foundations and NGOs cannot and should not
wish these systems away. They need to build each other’s capacities while being
realistic in their own expectations. For instance, we are consistent in support
and guidance to our NGO partners in areas of accounting and compliance whereas
our partners help us to build on our understanding of grassroots reality.
this adds time to the process at both ends and calls for commitment of specific
expertise and resources, both CSR Foundations and NGOs cannot and should not
wish these systems away. They need to build each other’s capacities while being
realistic in their own expectations. For instance, we are consistent in support
and guidance to our NGO partners in areas of accounting and compliance whereas
our partners help us to build on our understanding of grassroots reality.
It
is only when both sides bridge the trust deficits and see each other as partners
will we be able to accomplish the common goal of creating an equitable society.
is only when both sides bridge the trust deficits and see each other as partners
will we be able to accomplish the common goal of creating an equitable society.
Prashant Paleja
Head – Finance, Corporate Social
Responsibility, Cipla
Responsibility, Cipla
‘Caring for Life’ has
been at the forefront of Cipla’s business philosophy and remains the principal
purpose of doing business. Its initiatives as part of CSR programmes
effectively contribute to developing a sustainable and resilient community,
particularly in community welfare, health and education.
been at the forefront of Cipla’s business philosophy and remains the principal
purpose of doing business. Its initiatives as part of CSR programmes
effectively contribute to developing a sustainable and resilient community,
particularly in community welfare, health and education.
____________________________________________________________
Moneyis at once the most important resource of, and the most difficult to generate
resource for, NGOs. Primarily because NGOs cannot generate business profits and are therefore dependent on
donors for income to conduct activities.
NGO
leaders who are preoccupied with ensuring day-day maintenance budgets, often
fail to prioritise activities (capacity building of staff, putting systems in
place, etc.) that are crucial for an NGO’s effective performance, stability,
and growth.
leaders who are preoccupied with ensuring day-day maintenance budgets, often
fail to prioritise activities (capacity building of staff, putting systems in
place, etc.) that are crucial for an NGO’s effective performance, stability,
and growth.
For
small and medium size organisations, it is a constant struggle to raise funds
to ensure sustainability of the programs and the NGO itself, as donors are not
willing to support the scaling up and sustainability needs of the NGO.
small and medium size organisations, it is a constant struggle to raise funds
to ensure sustainability of the programs and the NGO itself, as donors are not
willing to support the scaling up and sustainability needs of the NGO.
While
the NGO sector expected relatively quick
and easy money with introduction of CSR, the experience has been otherwise. The
corporate, with little, or no prior experience, or understanding of the social
sector, were hesitant in giving money, till they had built up their own
understanding of the sector. The corporates who did give, chose to fund
specific projects of NGOs, not the NGO itself. CSR managers looked for programmes/projects
that had tangible results which were clearly defined and measureable.
the NGO sector expected relatively quick
and easy money with introduction of CSR, the experience has been otherwise. The
corporate, with little, or no prior experience, or understanding of the social
sector, were hesitant in giving money, till they had built up their own
understanding of the sector. The corporates who did give, chose to fund
specific projects of NGOs, not the NGO itself. CSR managers looked for programmes/projects
that had tangible results which were clearly defined and measureable.
With
CSR still being relatively new, the relation between organisation building of
NGOs, and greater impact in the field of social development, is as yet a
largely unexplored area. There is even now, insufficient understanding and risk
appetite to invest into organisation building of NGOs, to enhance NGO
productivity and outcome. I believe, there is strong need for the CSR
Foundations to come together and partner for collective giving, not only for
specific projects, but also for investing in long-term growth and impact.
CSR still being relatively new, the relation between organisation building of
NGOs, and greater impact in the field of social development, is as yet a
largely unexplored area. There is even now, insufficient understanding and risk
appetite to invest into organisation building of NGOs, to enhance NGO
productivity and outcome. I believe, there is strong need for the CSR
Foundations to come together and partner for collective giving, not only for
specific projects, but also for investing in long-term growth and impact.
Dr Atul R Gandhi
Chief Manager – Monitoring &
Evaluation, EdelGive Foundation
Evaluation, EdelGive Foundation
EdelGive Foundation is
the philanthropic arm of the Edelweiss Group. Since its inception in 2008, it
has worked towards being a bridge between the users and providers of
philanthropic capital and knowledge by bringing the skills, resources and talents
of the for-profit world to the not-for-profit arena.
the philanthropic arm of the Edelweiss Group. Since its inception in 2008, it
has worked towards being a bridge between the users and providers of
philanthropic capital and knowledge by bringing the skills, resources and talents
of the for-profit world to the not-for-profit arena.