ECCE CSR Landscape in India and it’s Potential for Impact

ECCE CSR Landscape in India and it’s Potential for Impact

Background

Early Childhood Care and Education (ECCE), encompassing the inseparable elements of care, health, nutrition, play and early learning within a protective and enabling environment has long been underfunded by CSR programmes, owing to a lack of awareness on its importance in child development. The Draft National Education Policy (NEP) 2019, which defines the early learning needs in the age group 0 to 3, and the age group 3 to 8 as a single learning continuum called the “foundational phase”, has added to this with a lack of clarity on the modality of achieving the infrastructural and institutional changes required by the policy.

‘ECCE CSR Landscape in India and Potential for Impact’ is a study by Sattva and DHFL Changing Lives Foundation aimed at raising awareness on Early Childhood Care and Education (ECCE) in India and developing a guide to CSR funders to consider ECCE in their portfolio.

The study plots the current landscape of funding and solutions for ECCE enabled by CSR, explores trends and evolution of CSR in ECCE funding over the last three years and maps the solution landscape of ECCE interventions enabled by CSR funding to plot areas of interest, types of funding, gaps and challenges.

Key Findings

ECCE Needs and Trends in India:
1. Nutrition, health and early childhood education are deeply interlinked. A child’s development potential cannot be fully realised unless these interlinkages are incorporated in intervention design.
2. About one fourth of children in the age group 3 to 6 do not attend any form of pre-school in India. Amongst those who attend some form of preschool, almost 50% are not ready for formal schooling.

Policy Landscape:
1. The Draft National Education Policy (NEP) 2019 defines the early learning needs in the age group 0 to 3; and the age group 3 to 8 as a single learning continuum called the “foundational phase”. However, there is a lack of clarity on the modality of achieving the infrastructural and institutional changes required by the policy.
2. The Indian government spends about 0.3% of GDP on ECCE, which is much lesser than the OECD countries’ average of 0.8%.

Interventions by ECCE implementers:
1. ECCE implementers have been instrumental in executing innovative ECCE interventions through contextual approaches on the ground. However, these innovations remain largely localised, with very few translating to systemic change.
2. The implementer landscape has certain white spaces like early stimulation, responsive care, parental capacity building, children with disabilities. There is also a felt need by implementers to increase the focus on the 0 to 3 age group.

CSR funding for ECCE:
1. Despite education and health being top funded areas for CSR funders, only 17% of top education funders and 22% of top healthcare funders make some contribution to interventions related to ECCE.
2. There is little data available on CSR expenditure towards ECCE due to lack of standardised reporting practices. However, aligning schedule VII of the Companies Act to SDGs has the potential to change this
3. Interventions pertaining to health and nutrition are better represented than other components of ECCE in CSR funding.

Opportunities to unlock capital and promote collaboration:
1. Investing in ECCE has far reaching impacts ranging from improved economic growth, creating responsible citizenry, to low crime rates.
2. To enhance their ECCE impact, CSR funders can facilitate collaboration at three levels:

  • a. Collaborate with government authorities/institutions to complement the efforts
  • b. Collaborate with multiple non-profits towards comprehensive ECCE outcomes
  • c. Collaborate with other funders working on addressing ECCE or non-ECCE outcomes

 

The full report can be accessed below.

ECCE CSR Landscape in India and Potential for Impact – Full report

A factsheet for the report can be accessed below.

ECCE CSR Landscape in India and Potential for Impact – Factsheet

This is a first attempt at mapping the landscape of funding and solutions in ECCE in India. We deeply appreciate your feedback, comments, and suggestions. Write in to research.advisory@sattva.co.in.

Social Stock Exchange – a primer for Indian SPOs

Social Stock Exchange – a primer for Indian SPOs

– by Arpitha Rao

Background
In her budget speech in July 2019, the Indian Finance Minister Nirmala Sitharaman proposed a Social Stock Exchange (SSE) for social enterprises and voluntary organisations working for social welfare to help them raise capital through debt, equity and mutual funds. The proposed exchange will be under the regulation of Securities and Board Exchange of India (SEBI), will allow the listing of social enterprises and voluntary organisations and will function as an electronic fundraising platform. In September 2019, the SEBI constituted a working group to hone this further under chairman Ishaat Hussain, Director, SBI Foundation.

This news is indicative of a larger shift towards increased mobilisation of domestic capital for social purposes, and reducing India’s dependence on foreign aid. At Sattva, we studied the concept and implications of the SSE, especially in the context of flow of capital for Social Purpose Organisations (SPOs include for-profit social enterprises and non-profit organisations).

We are sharing our early learnings here as an SSE primer and we will follow up with additional insights as the topic evolves.

Current state of India’s social sector
Although India’s social economy is one of the most active in Asia, Indian SPOs continue to suffer from a low volume of deals and small viable pipelines for social enterprises, as well as consistent, long-term fundraising for non-profits. Indian SPOs face obstacles in raising capital to deliver social solutions due to a variety of factors including monitoring and evaluation challenges, lack of standardised methodologies for evaluating organisations, nascent impact investing environment, restricted / reduced funds for organisational growth and so on.

The SSE could improve this situation for Indian SPOs
Some potential scenarios where such an exchange can be leveraged to benefit SPOs include:

  • – Functioning as a search directory listing credible and vetted Social Purpose Organisations
  • – Enabling equity investments for Social Enterprises (institutional/ retail) across all stages of the capital value chain (SMEs to larger organisations)
  • – Enabling issuance of financial instruments like bonds and notes for SPOs
  • – Potential to create a common language around impact assessment and measurement and popularise this with donor ecosystem – both institutional and retail
  • – Potential to increase unrestricted funds for Indian non-profit organisations.

 

Key considerations for the India SSE model:

As the idea is still nascent, with limited clarity on the overall structure of SSE, it is difficult to understand the impact of such a stock exchange on SPOs at this point. However, an SSE model with clarity in the following areas will greatly benefit the players in the ecosystem:

  • – Clear, consistent definition of the terms ‘social enterprise’ and ‘voluntary organisation’: Given the ambiguity around the terms, a critical task for SSE would be to provide standard definitions to determine whether the model will predominantly provide space for non-profits or for-profit organisations. e.g. The inclusion of Section 8 companies in the SSE’s definition of ‘social enterprise’ could lead to well-funded entities also benefiting from this new initiative.
  • – Measurement models that balance financial and social performance to assess SSE listed members: Ms Sitharaman has reiterated that the new SSE will use a rating mechanism which acknowledges the diversity of players in the social space. The rating tool will need to balance multiple indicators to measure and evaluate the performance of SPOs on this new platform. For instance, the appropriate financial performance measures (revenues for Social Enterprises, Operating budgets for NGOs) in the rating process would need to be balanced with social outcomes attributable to the organisations, to assess them on a level scale.
  • – Clarity on how this initiative will interact with the Companies Act: Among other things, Section 135 of the Indian Companies Act mandates companies with revenue of more than INR 50 million to spend 2% of their profits on Corporate Social Responsibility (CSR) each year. It will be important to have clear guidelines on how CSR funds can be deployed via SSE.
  • – Incentives for participants to drive engagement: Fostering widespread engagement among investors will be vital if NGOs are to raise adequate capital to fund their projects and expand their operations. Some incentives will be important for both market participants willing to invest and SPOs willing to get listed. For example, Investors may need some risk protection mechanisms (through policy and regulatory reforms)

 

What can SPOs do to prepare for SSE
At this early stage of its evolution, it will be important for SPOs to closely follow the developments related to SSE. Some research and thinking on the following areas would be beneficial:

  • – Understand the global frameworks used to assess the impact of organisations; this may give insight into how SEBI could structure the valuation mechanism for the new platform. It is important to understand the mechanisms used by global SSEs such as the Impact Reporting and Investment Standards (IRIS), the Global Impact Investing Rating System (GIIRS) and The B Impact Assessment (BIA).
  • – Explore the feasibility and design of a baseline measurement model to highlight social return on investments, based on a set of quantitative and qualitative indicators. Thinking along these lines for their own organisation’s work, irrespective of the final measurement framework used by the SSE, will be a helpful strategy exercise for SPOs.

 

Next steps
At Sattva, we will be closely following all news related to the SSE, given its enormous potential to impact the Indian social sector. Today, most of the focus in all conversations around SSE and similar exchanges in other countries seem more focussed towards social enterprises. We also see a need to engage with non-profits on this topic to understand their perspective and needs. We hope this article and our other forums of engagement will drive a rich, ongoing dialogue with all ecosystem actors on this critical topic.

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Arpitha Rao is part of our Transformation Advisory team and is based in our Bangalore office. Her current work focuses on large-scale transformations in public education. Before Sattva, Arpitha has worked with Teach for India, the India Literacy Project, and Greatest Common Factor. She followed up her Engineering degree with a Masters from TISS and an MBA from ISB.

Sattva has been working with various non-profits and social organisations as well as corporate clients to help them define their social impact goals. Our focus is to solve critical problems and find scalable solutions. We assist organisations in formulating their long-term social impact strategy by strategically aligning with business to provide meaningful solutions to social issues.

● We’d love to hear your thoughts and feedback on this topic. Do write to us: impact@sattva.co.in

The Hierarchy of Impact

The Hierarchy of Impact

Creating meaningful change requires valuing different levels of impact.

– by Rathish Balakrishnan

One of the questions I am often asked when I tell people that I work with companies on their CSR strategy and implementation is, “Do these companies really care about impact?”. At Sattva, the organisation I lead, our employees ask the same question about every customer we engage with, and every person we hire: “Are they truly committed to social impact?”. The answer is rarely black or white. Over the years, I have come to realise that it is not about whether you are committed or not but about your relationship with impact. And when it comes to impact, I have in my experience, seen three key anchors.

1. The self.
There are those of us who approach impact from an entirely personal lens. We are looking for meaning and gratification through experiences that allow us to directly engage with issues of, for instance, poverty and climate change. We engage with them in our own neighbourhood and social context, such as volunteering for social initiatives, advising organisations that are in our network, or even starting a small nonprofit on an issue of personal interest.

We are well-intentioned and find simple and effective ways to make a difference in someone’s life. We value these experiences and often translate them into stories that we tell ourselves and those around us. We don’t have a particular urgency around solving a problem for good, as long each of our actions make others’ lives better. Over time however, we might ask ourselves whether our efforts truly make any difference to those whose stories we tell.

To me, these are the people that are anchored to the self.

2. The poor
There are those of us that want to go beyond our comfort zone and work in the areas of greatest need. We feel strongly about the inequality around us and act with urgency to solve these problems. We have a strong bias for action and often want to find quick solutions that will address a specific problem and demonstrate immediate outcomes. Through a combination of data and stories from the ground, we measure whether our efforts are truly creating meaningful impact. And over time, we might become frustrated because the impact that we seek to achieve is either short-lived or distant.

Such people in my view are anchored to the poor.

3. The system
Then there are those among us who are anchored to the system. We recognise that poverty is a systemic issue and quick-fix solutions often have limited impact. We seek to shift the focus to the larger systemic challenges like improving the ability of the government to deliver better long-term outcomes, establishing ecosystem level initiatives that will move the needle across organisations, or creating a community-led model of change that is participative and sustainable.

We engage with government, aim to influence policy, and drive ecosystem level investments because we believe these efforts will create enduring change. We replace urgency for impact with indicators of progress. We are fine with the uncertainty and risk that is inherent to systems level work. However, we continue to be plagued with the question: how does it all add up in the long run?

Nowhere has this difference been more evident to me than at a strategy session I was once a part of. One of our nonprofit partners had received a mandate to work across 10 states on education, and we were discussing what its strategy should be. There were those in the room who used this opportunity to share their own personal aspirations on what they would like to work on and the districts where they would like to be. I strongly argued that this was a once in a lifetime opportunity and we should do everything in our power to improve student learning outcomes, even if some of our initiatives would be short-term. The CEO argued that he was fine not having any impact on learning outcomes for five years. He would rather go all out to demonstrate a strengthened government machinery to deliver education, which he believed would provide dramatic improvement on learning outcomes over a 10 year horizon.

Neither of us was less committed to impact than the other but we held very different positions on what we thought was the right thing to do. Since then, I have seen this play out in every discussion on a wide range of topics. I have seen it among funders trying to solve deep rooted problems with limited funding, and among nonprofit leaders on what they think is the right thing to do.

Is one anchor ‘better’ than the other?
I notice the judgements that those anchored on the poor or the system have towards those anchored on the self. I also observe the increasing shift among strategic funders towards anchoring impact conversations around the system (of course, there can be no absolutes here; just propensities that people might have when weighing choices around impact).

The most effective philanthropists and practitioners I have worked with, recognise these anchors in themselves and those they work with; and they switch between these anchors based on the problem at hand, rather than maintaining a constant disposition towards any one anchor.

I have always believed that social problems are complex and we need as many hands and resources on the deck as possible. Collaboration is hard, and I strongly believe it is because we come at the problem from such different places. So, I have been mindful to watch out for my own biases—imandari ka ghamand, to borrow from the film, Newton—when I engage with those that come with the intent to create impact. I also observe that the stakeholders with different anchors use different vocabularies to discuss social issues and solutions. I have now learnt to adapt my vocabulary when interacting with stakeholders with different anchors.

Our anchors and those of our stakeholders have a fundamental impact on whom we engage with and how we collaborate. Therefore, it might be useful to consider them when making decisions about, for instance, pursuing funding opportunities or hiring.

If you are a nonprofit, you might ask yourself: what type of funder am I looking for and do I have the right opportunities for donors who have different anchors?

If you are a funder, you might question whether your biases are clearly stated to your team and grantees. Are you looking to create a balanced portfolio or anchor yourself strongly on one?

If you are organisation looking to hire, what type of person are you looking for? Are you for instance open to hiring a person strongly anchored on self but with the relevant skills? And, as an organisations looking to collaborate, are you looking for partners that have the same anchors as you? Or are you looking to complement your focus with those that might have different anchors?

To end with the question we posed at the beginning: do companies really care about impact? In our experience, a large number of companies (and high net-worth individuals) are distributed between the anchor to the self and to the poor, with few being anchored to the system. But we are also excited to see companies consciously making early efforts to shift across these three anchors. For instance, one of our CSR customers is shifting from writing a cheque to relief funds to establishing a portfolio across water, livelihoods and disability, over the next two years. They recently signed an MoU with a reputed academic institution to setup an incubator focused on helping scale innovative solutions on women empowerment.

I would wager that in the next 10 years, some of the most strategic funders in our ecosystem will be companies’ CSR departments. To accelerate this shift, we need partners—not naysayers or cynics—who can keep their judgements aside and work with diverse stakeholders. The choice, as always, is ours.

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Rathish Balakrishnan is the Co-founder and Managing Partner at Sattva. Rathish has extensive experience in conceptualising and implementing strategic large-scale solutions in social impact sector. He has contributed significantly at governmental policy level in education and skill development. Rathish has also spent a decade working at SAP across their engineering, product management and corporate strategy divisions. He is a graduate from BITS Pilani.

This article was originally published in IDR Online.

Sattva has been working with various nonprofits and social organisations as well as corporate clients to help them define their social impact goals. Our focus is to solve critical problems and find scalable solutions. We assist organisations in formulating their long-term social impact strategy by strategically aligning with business to provide meaningful solutions to social issues.

● Talk to us: impact@sattva.co.in

EdTech – One Size Does Not Fit All

The Sattva View – One Size Does Not Fit All

In this column, Sulagna Datta lists how ed-tech in under-resourced communities differs from typical market-based products, and argues for thoughtful design and customisation of those products.

5 things to keep in mind while implementing ed-tech projects in the impact sector

Education Technology or Ed-tech is a buzz word in the Indian impact space today. There has been a flux of funding into this sector, with behemoths like Byju’s emerging as unicorns, crossing $1bn in estimated worth. The supply side is inundated with products that can be categorised in a multitude of ways: Subjects, target age group, in school/out of school, etc. As per Tracxn research, which is India’s leading data aggregation and analytics platform – there are ~4574 Ed-tech products in India today, and ~17,000 products globally.

Schools and colleges across the country are using these products for a multitude of reasons ranging from improving scores in specific subjects and preparing for competitive exams to practising for job interviews. However, if you work with implementation of Education technology programmes for the bottom of the pyramid, the question to ask is ‘What are the things that no one told you about Edtech projects for this context?’

1/ The number of Ed-tech products in the market that are actually built keeping the bottom of the pyramid in mind is shockingly low.
From a Sattva research, out of 566 school products catering to Hindi and Mathematics, only 19% had either already partnered with or shown interest in working with government schools. Which means a staggering 81% of products were meant for the private school context.

When products are built keeping private schools in mind, their data and infrastructure requirements are higher, and more often than not, their content is at levels not graspable by students in government schools. Implementation teams have the onerous task of spending time to customise these products for the BoP context.

2/ Even products that are meant for the BoP context cannot be utilised to their full potential Implementers need to be prepared that basic infrastructure varies drastically across government schools even in peri-urban areas in Bangalore and Delhi.
The biggest advantage of education technology over traditional pedagogical methods is the creation of personalised learning paths for students. Students can learn at their own pace with a curriculum adapted to their needs. For this, the ideal device to student ratio is 1:1, and almost all products are built keeping this ratio in mind. However, this fails in an Indian government school set-up. Even in schools that have labs, the device ratio is seldom 1:1, hampering engagement and consequently learning outcomes.

Most products are designed keeping in mind a certain number of modules to be completed at home as practice. However, most children in government schools come from households with an annual income of <1,00,000 Rs. They don’t own devices at home, and hence are not able to complete most of the self-learning that is meant to happen on the product. Additionally, another constraint in the government school context is access to internet. Since the maintenance budget of all government schools in India is ~8,000-10,000 rupees annually [often going into maintenance of buildings, etc.]- covering bills like the internet becomes cumbersome and is ignored. This leads to further interruption of technology-based learning. 3/ From ages 17-23, ~90% of BoP college youth have smart phones. However, they are extremely data conscious and tend to delete any application/product that takes more than 20 MB of space. While choosing products for the vocational context, practitioners have to be very conscious of the product they recommend.
From a pilot to learn English for interviews through applications through 5 top applications in India, 2 applications stood out in performance owing to the following reasons:

i. They functioned fully offline. After the initial download, they didn’t require any data to run
ii. They were between 15-20 MB in size
iii. They were available across all playstores: Android, Jio, etc.
The other three failed on at least one of the above parameters

4/ From qualitative interviews with about ~2000 college students across India, there is a clear set of features that makes an application more successful than another
i. Leaderboards were a clear favourite amongst students. Students were motivated to use applications when they could see their peers use it. They liked to see where they stood in their comparable cohort
ii. Applications that had short modules and progress bars/gamification were favoured. Students used it like a game to finish the stipulated target defined by the product for the day
iii. For a pan India context, the application that was most successful had an 18 language interface. Students preferred to learn in their vernacular language.

5/ The optimum learning time on an edtech product is about 20 minutes a day
A critical element to keep in mind while designing an edtech initiative is to set a target for content consumption a day. Applications that stipulated more than half an hour a day, saw declining engagement and drop-outs. A 15-20 minute engagement/day was seen in about 80% students who completed the entire course.

While private enterprise products are pushed to the BoP context without considering its nuances, the learning experience is less than optimum, and that typically discourages the learner, further jeopardizing the quality of education. It’s important to address this demographic thoughtfully, with an eye on specific needs and access.

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This article was originally published in Impact Magazine.

Sattva has been working with various nonprofits and social organisations as well as corporate clients to help them define their social impact goals. Our focus is to solve critical problems and find scalable solutions. We assist organisations in formulating their long-term social impact strategy by strategically aligning with business to provide meaningful solutions to social issues.

● Talk to us: impact@sattva.co.in

Connecting to the Idea of Impact – a report from the field

Connecting to the Idea of Impact – a report from the field

Hugh Lupson is from London and studies History and Geography at the University of Leeds in the UK. His recent university projects whetted his appetite for the social sector and he spent some time as an intern at Sattva. This was his first time in India.

Akshaya is currently pursuing M.Sc. (Hons) Economics at BITS Pilani. She has actively volunteered in the programmes of ‘Education’ and ‘Rural Women Empowerment’ undertaken by the Nirmaan Organization at BITS. Her inclination for community work led her to intern at Sattva where she hopes to learn more about how organisations specialise in social service and gain insight into social entrepreneurship.

As part of their internship Hugh and Akshaya visited a school for marginalised communities in Bangalore. Read about their experience here:

This Foundation’s vision is simple: to provide the poorest children from local slums with world-class opportunities, the key is education. However, this Foundation differs from other projects in providing what they call a ‘360-degree development model’, a more holistic approach to education. Besides lessons, the ‘360-degree development model’ focuses on healthcare, nutrition, emotional support and community development.

We visited them on 27th September to observe the model in action. We wanted to experience the influence that Sattva’s programmes have on their beneficiaries. The exploration into the lives of beneficiaries would also help us connect to the idea of impact and visualise it first-hand. The insights gained from this visit could even allow us to perceive the ways in which our new product, Shift 2.0 could give an enhanced picture of impact to all programmes undertaken by Sattva. We spent only a couple of hours at the Foundation, a 4-floor building with a multipurpose terrace. So while our analysis may be far from comprehensive, the visit gave us a valuable opportunity for a qualitative appraisal, shining a light in a way that statistics simply cannot and adding a human element to project evaluation.

Education is the primary pillar of the Foundation’s approach. Their school follows the I.C.S.E, an intense yet balanced secondary-schooling curriculum. We observed several lessons including English and Mathematics. In the Mathematics class the children were using blocks representing groups of ten to form number bonds to 100. Their numerical ability was impressive. Adapting to different styles of question, the children showed an understanding of the relationships between different numbers and functions rather than simply rote learning of the bonds. This speaks highly of the teaching style here. Unfortunately – as the school’s principal mentioned – the quality of the teachers here attracts the attention of fee-paying schools, who are able to lure some of them with higher wages each year.

In the English classes the students struggled slightly when not following memorised sentences. Nevertheless, they articulated to us their impressive ambitions and dreams; from becoming doctors and English teachers, to travelling the world. Through ideas like naming classrooms after planets and asteroids, it seemed to us that the Foundation’s ethos was to encourage the children not to put limits on themselves or the ways they think.

Their focus on emotional development was also clear to see. The happiness of the children is perhaps our most lasting impression of the visit. We were met in each classroom by beaming young faces, excited to speak to us and clearly proud of what they were learning. The school has a ‘friendship corner’ for any child who is feeling unhappy. The pupils are encouraged to sit in the ‘friendship corner’ whenever they are feeling unhappy and other pupils will join them to cheer them up. While we didn’t see this initiative in action, it suggests that developing empathy in children was important to the school.

Unfortunately, according to the school’s principal, the children’s happiness doesn’t always follow them home each day. Many children return home to difficult lives and carry a sizable emotional burden due to past or ongoing traumatic experiences. In response to this, the school has an in-house therapist who will see pupils on demand. However, acknowledging that a therapist will not be able to tackle this issue at its root, the school also invests in efforts to make sure children are happier at home. The community development programme aims to forge a stronger community for children through collaboration with other local schools, for example discussing a book the children had recently read via Skype. An initiative for fathers suffering with alcohol problems was also mentioned as well as teaching parents how to make soap using vegetable peel.

The children also face challenges when they graduate from the school. The strong community spirit at the Foundation’s schools contrasts with normal life as a young adult. We heard that not all graduates have been able to make the necessary emotional adjustments. One solution to this issue has been to extend the school’s structured mentoring system to include alumni. Access to this wider network of the Foundation’s alumni serves as a useful tool for pupils striving to achieve their career goals.

Some areas of the 360-degree model were harder to gain an appreciation of during our visit. We narrowly missed the children’s lunch, which they had clearly been eagerly anticipating. Therefore we had little opportunity to observe the school’s nutrition programme. However, the children spoke about their food with enthusiasm, especially the eggs they get twice weekly. At the risk of making an inference, it would be hard to imagine hungry children being as happy and animated as the ones we met.

Healthcare and extra-curricular activities were also difficult to gain an understanding of during our visit. While some older children had an inter school arts competition, there was a noticeable lack of outdoor space for the children to play sports and little mention was made of activities outside of lessons. With regards to healthcare, we were given only a brief look at the infirmary, which two children were using to revise for a test. The teachers didn’t mention the healthcare programme. However, we noticed that the children’s ID cards were lacking basic details such as their blood group. As such, for the next visit: nutrition, extra-curricular activities and healthcare should be prioritised for a deeper understanding of the Foundation and its impact.

In its 16th year, the Foundation and its pupils seem to be thriving. The school has received several awards for innovation from institutions including the British Council and Tata Communications. Going forward, the principal mentioned that a key objective for them will be to secure a more reliable funding system. Currently, with funding only being guaranteed for one year at a time, it is difficult for the school to plan for future growth. Perhaps with a 5-year funding guarantee, the Foundation could scale-up and reach its true potential.
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Sattva has been working with various nonprofits and social organisations as well as corporate clients to help them define their social impact goals. Our focus is to solve critical problems and find scalable solutions. We assist organisations in formulating their long-term social impact strategy by strategically aligning with business to provide meaningful solutions to social issues.

● Talk to us: impact@sattva.co.in

CSR Amendments – a step forward for CSR-Nonprofit relationships

CSR Amendments – A step forward for CSR-Nonprofit relationships

– by Nishkarsh Swarnkar

The Indian parliament recently passed a slew of changes with the Companies (Amendment) Act 2019, including its section 135 which is typically known as the “CSR law”. There has been a lot written about the direct implication of these changes on CSR. For a quick reference, you may want to read my colleague Mohana Rajan’s article. In this piece, we will talk about something that has not been discussed as much – the implications of these changes on nonprofits. And the news is not just good, it’s great! The changes to CSR law bring about a number of unique opportunities for nonprofits that have not been possible earlier.

We see three important trends that CSRs are likely to exhibit post the change:

1. Optimise spends – The law has now made CSR spending mandatory for all qualifying companies. This means not only will there be a greater pool of CSR money flowing into the ecosystem, but also that there will be a greater sense of urgency in utilising the funds. Any funds that remain unspent and are not related to an ongoing CSR programme will essentially be lost from a strategic investment perspective. CSRs, thus, will be looking for full utilisation in avenues that fulfill their key social objectives or align with their broader strategic interests. Nonprofit leaders can capitalise on this in the following ways:

○ Create sound projections and spending schedules, minimising underutilisation
○ Understand and align with core focus areas of the corporate’s social interests and investments
○ Keep alternate spending options ready in case underutilisation of funds becomes a challenge, especially towards the end of the financial year

2. Leverage longer-term partnerships – The typical relationship between a nonprofit and a CSR has often been short-term and transactional. However, with the introduction of the 3-year spending horizon in the law, this is now set to change. The CSR funds can now be used to finance long-term projects that aim to achieve large-scale outcomes. The longer spending horizon allows corporates to formally plan and use provisions for multi-year engagements with nonprofits, thus working towards interventions on engendering systemic change. At their end, nonprofits can take the following measures:

○ Establish shared value proposition with corporates by aligning with their social and environmental sustainability goals
○ Shift perspective from ‘donor management’ to ‘strategic relationship management’, and build a team that is equally adept at discussing financials and social impact
○ Think about flagship programmes aiming for highest impact, and create a multi-year plan and robust M&E
○ Include an ongoing dialogue on impact created on the ground, including walking CSRs through the outcomes of the social change

3. Focus on research and innovation – The government has now broadened the scope of CSR activities to include grants to incubators, thus supporting start-ups and initiatives working towards the SDGs. This is a new opportunity for nonprofits that are looking to conduct scientific research, innovate on solutions or test product prototypes. Nonprofits can now set-up their own R&D labs or product development units under government-sponsored incubators, or tie-up with universities, research institutes and existing start-ups. To the incubatees, the ability of nonprofits to bring their topical knowledge, field experience and on-ground insights to the table can prove a great value-add. This tie-up opportunity across varied actors is in itself a rare phenomenon, and has the potential of bringing a multiplier effect to the outcomes of the ecosystem – proliferating platforms akin to ‘Tech for Impact’ across diverse sectors.

To conclude, the changes to the CSR law open several new opportunities for nonprofits to engage in long-term, strategic partnerships with corporates built on shared value. An increase in the pool of available resources will favour nonprofits who fully utilise their grants and track outcomes. And last but not the least, the grounds are most fertile for nonprofits aiming for large-scale, systemic impact through long-term projects, research and innovation.

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Nishkarsh Swarnkar is part of our Transformation Advisory team and based in our Bangalore office. His current work focuses on large-scale transformations in public education. Before Sattva, Nishkarsh has worked with ZS Associates as a management consultant in the healthcare industry. He is a graduate of National Institute of Technology Karnataka, Surathkal.

Sattva has been working with various nonprofits and social organisations as well as corporate clients to help them define their social impact goals. Our focus is to solve critical problems and find scalable solutions. We assist organisations in formulating their long-term social impact strategy by strategically aligning with business to provide meaningful solutions to social issues.

● Talk to us: impact@sattva.co.in

A three-pronged approach can enable positive breastfeeding outcomes

Optimal Breastfeeding can boost maternal and child health worldwide

According to WHO & UNICEF, over 820,000 lives can be saved annually through optimal breastfeeding. Breastfeeding can significantly improve the health of children and mothers resulting in economic benefits equivalent to USD 300 billion worldwide annually.

The optimal breastfeeding practice recommended by WHO is to initiate breastfeeding within one hour of birth, exclusively breastfeed (EBF) for the first six months, followed by breastfeeding and complementary feeding for a minimum of two years thereafter.

India has not scaled its breastfeeding rates as desired
Research has shown breastfeeding rates have not scaled as desired in India (NFHS 4). While institutional deliveries have increased from 40% in 2005-6 to 78% in 2015-16, breastfeeding initiation in the first hour is still low at 48.5%, with EBF rates for the first six months at 55%. These numbers point to a missed opportunity to enable breastfeeding at birth and sustain those practices effectively thereafter.

In public hospitals, the front-line workers (FLWs), doctors and nurses are expected to provide information and support on breastfeeding. However, inadequate staffing, low awareness and incentivisation for other activities over breastfeeding play a role in why this is not prioritised. In the private sector, where regulation is limited, there is low awareness and limited incentives for doctors and nurses, who are the key caregivers to mothers. Many caregivers encourage mothers struggling with breastfeeding to lean towards formula food.

Why are breastfeeding rates low?
Considering breastfeeding is a natural process, we assume that it comes naturally to every mother. However, issues range from incorrect latching, doubts on milk sufficiency, lip and tongue ties, delayed onset of milk (which require individual counseling) to mastitis and breast abscess (which require medical intervention and sometimes, surgery). Predominantly, lack of timely awareness and sustained support mean that mothers are ill-equipped to address such issues and this can ultimately, lower their confidence to breastfeed.

A three-pronged approach is required to address these barriers:
1. Awareness generation to ensure that families have the right information
• Counselling should start early (during pregnancy) and be extended to the family, especially the primary support system (spouse, mother, siblings, mother-in-law) to ensure a supportive and encouraging environment.
• Ensure adequate and frequent training to all who impart breastfeeding counselling (including frontline workers, doctors and nurses). Training should also be a part of the curriculum for medical and nursing students.

2. Skilled counselling to overcome barriers and enable appropriate behaviour
• Invest in dedicated skilled lactation counsellors for breastfeeding counselling at a public district hospital level. A cost-benefit analysis (EPW ) has shown that it will strengthen the government’s agenda on breastfeeding and promote best practices.
• Invest in sustainable models of skilled counselling in private facilities that focuses on demand creation along with ensuring a pool of trained counsellors.
• Boost private and public partnerships to address availability and quality of care by filling gaps in the public sector through appropriate incentivisation

3. Peer support groups to sustain the behaviour for the desired period
There is strong evidence to show how support groups improve breastfeeding rates. It is important that such groups work with families, as they play a significant role in busting myths and stigmas and stopping mothers from abandoning breastfeeding. . We need to:
• Institutionalise and sustain peer and mother support groups in the public sector by working closely with frontline workers and communities
• Strengthen and replicate successful existing peer networks and use them to accelerate breastfeeding outcomes in the private sector through enabling the right partnerships

It is critical these strategies all work in tandem to achieve favourable outcomes.

Finally, it is the choice of the mother
In India, we see a gap between intent and implementation. Strengthening policy, enabling working parents, increased funding and rigorous monitoring are critical enablers in reducing these gaps. In addition, catalysing the private sector to focus on innovation and demand-led models to increase breastfeeding rates are important, especially as the private sector starts to play a larger role in healthcare.

The choice to breastfeed lies with the mother. What the ecosystem should ensure is that her choice is backed by the right information and the necessary emotional and medical support throughout her breastfeeding journey.

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An edited version of this article was published in BW Wellbeing World to mark World Breastfeeding Week.

Talk to us: impact@sattva.co.in

Amendments in the CSR Law: What it means for you

Amendments in the CSR Law: What it means for you

22 August 2019
There is a lot of buzz around The Companies Act, 2013 and the recent amendments proposed in July 2019. These amendments also comprise changes in CSR directives. These proposed CSR amendments have not yet been notified by the Central Government and the earlier CSR law in India remains the same as on date.

But, what are the CSR directive amendments that have been proposed? What does it imply for you if you are a part of the CSR team of a company? Are there any ramifications or is it much ado about nothing?

There are four key changes that one needs to bear in mind:

1. If you’re a compliant company (have been spending your allocated CSR funds annually) – you have nothing to worry about.

However, what happens to the unspent amounts from your allocated CSR budget?

Any unspent CSR amount at the end of every financial year that is not related to an ongoing project that is undertaken by a company in pursuance of its Corporate Social Responsibility Policy, shall be transferred by the Company within a period of six months of the expiry of the financial year to any of the Funds** specified in Schedule VII of the Act.

Any unspent CSR amount at the end of every financial year that relates to an ongoing project that is undertaken by a company in pursuance of its Corporate Social Responsibility Policy, shall be transferred by the Company within a period of 30 (Thirty) days from the end of the financial year, to a new bank account to be called as the “Unspent Corporate Social Responsibility Account”.

The amount from this “Unspent Corporate Social Responsibility Account” shall be utilised by the company in pursuance of its Corporate Social Responsibility Policy within a period of 3 (Three) financial years from the date of such transfer, failing which the company shall transfer the same to any of the Funds** specified in Schedule VII of the Act within a period of 30 (Thirty) days from the date of completion of the third financial year.

** Funds as on July 31, 2019 include:

(a) Swachh Bharat Kosh;
(b) Prime Minister’s National Relief Fund; or
(c) Clean Ganga Fund.

How can the ‘Unspent Corporate Social Responsibility Account’ be advantageous?

This can be used to fund multi-year projects to achieve large scale outcomes. Allows corporates to formally plan and use provisions for multi-year engagements with non-profits, thus allowing corporates to support interventions working on engendering systemic change.

2. If you’re a new company, and meet all the financial requirements for CSR, you’ll have to allocate CSR funds.

Previously, only companies that:

(a) fulfilled the financial threshold specified in Section 135 (1) of the Act; AND
(b) which had completed a period of 3 (Three) financial years since its incorporation,

were required to spend 2% of the average net profits towards CSR activities.

By virtue of this amendment of Section 135 (5), even if a company has not finished 3 (Three) financial years since its incorporation, as long as the company meets the threshold specified in Section 135 (1), i.e., (i) Company having a net worth of INR 500 Crore or more; (ii) a turnover of INR 1000 Crore or more; or (iii) a net profit of INR 5 Crore or more, during the immediately preceding financial year, such company is required to spend 2% of its net profits towards CSR activities.

3. The penalty for non-compliance may become more stringent

This signals government interest to closely monitor and control CSR expenditure and may be a precursor for more stringent auditing of CSR spends by corporates.

Going forward, in the event a company fails to:

(a) Comply with Section 135 (5), i.e., does not spend 2% of the average net profits towards CSR while being required to do so under Section 135 (1) or does not transfer any unspent CSR Amount (not allocated for any ongoing project) to a fund mentioned in Schedule VII; and/or
(b) Comply with Section 135 (6) i.e., unspent CSR Amount of ongoing project to “Unspent Corporate Social Responsibility Account”,

such company will be liable to pay a fine ranging from INR 50,000 (Rupees Fifty Thousand Only) to INR 25,00,000/- (Rupees Twenty-Five Lakhs Only).

Additionally, every officer of the company that is in default shall be punished with imprisonment for a maximum period of 3 (Three) years OR with a fine ranging from INR 50,000/- (Rupees Fifty Thousand Only) to INR 5,00,000/- (Rupees Five Lakhs Only)

The Bottom line:
New companies may be brought into the CSR fray due to removal of the criterion on years of existence. The proposed provisions allow for multi-year projects up to 3 years and propose criminal penalisation for non-compliance.

These amendments have not yet been notified by the Central Government and have drawn significant flak from corporates. There is also eager anticipation for the Government’s decision on the recommendations of the High Level Committee on Corporate Social Responsibility headed by the MCA Secretary, Mr. Injeti Srinivas, published on 7 August 2019.

NOTE: The CSR landscape is poised to undergo changes with the recent set of proposed amendments to the Companies Act. While the discussion and debate is on, the right interpretation of the implications is critical.

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Sattva has been working with various corporate clients to help them define their social impact goals and maximise the return on social investment. Our focus is to solve critical problems and find scalable solutions. We assist companies in formulating their long-term CSR strategy by strategically aligning with business to provide meaningful solutions to social issues.

● You can read more about our work with CSR, here.
● Talk to us: impact@sattva.co.in

Breaking Breastfeeding Barriers for Working Women

Breaking Breastfeeding Barriers for Working Women

India needs stronger legislation, better maternity policies and quality childcare, to enable women employees in the formal and informal sectors to achieve positive breastfeeding outcomes

India has set a target for an exclusive breastfeeding rate of 69 percent by 2025. A big part of this puzzle will be to enable working women to breastfeed.

Overall, India ranks 78 in the World Breastfeeding Trends initiative (WBTi), of 97 countries that participated. Only 48 percent of children initiate breastfeeding within the hour and only 55 percent follow exclusive breastfeeding for six months.

The target can be met only if we address barriers that working women face through legislation. Essentially, this means creating mother-baby proximity for the first six months to allow for exclusive breastfeeding without wage loss and facilities to pump, store and feed expressed milk once work is resumed by the mother.

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While there are some big wins for women in the formal workforce, the legislation can be further strengthened.

In India, the revised maternity bill accounts for six months of paid maternity leave for up to two children. However, the burden of wage payment during this time lies solely with the employer; experts say that this could be counterproductive and discourage organisations from employing women. In 2017-18 alone, about 11-18 lakh jobs were lost because of this. In addition, enforcement of legislation for contract workers need to be strengthened.

Here’s how the legislation can be strengthened:

– Provide incentives to employers such as underwriting part of the wage payment, tax breaks, or even introduce employee taxes to encourage employers to continue to hire more women • Create appropriate paternity leave provisions to ensure spouse support that is especially critical in establishing breastfeeding

– Sharpen guidelines on workplace enablement to include providing appropriate pumping equipment and having a designated pumping spaces in addition to providing nursing breaks

Workplaces need to sensitise all employees such that they can encourage breastfeeding mothers. They must also create mechanisms for mothers to seek out the right information and support through connecting peer groups and breastfeeding support organisations.

Large corporate governance must ensure that this applies to workers across across their value chain, including contract workers across SMEs and MSMEs .

The maternity act does not apply to the informal sector, which is estimated to be over 80 percent of the women workforce. Informal workers are also forced to return to work early because of poor economic conditions. A recent study on childcare practices of mothers working in the informal sector by Indian Institute for Human Settlements (IIHS) showed how close to 50 percent of the women surveyed returned to work within three months of birth, and only 21 percent of the total women continued to exclusively breastfeed.

Informal workers require convergence across maternity schemes and better childcare facilities to enable positive breastfeeding outcomes.

A critical need for informal women workers is wage protection. Today, schemes that support maternity benefits for informal workers at both a central and state level are inadequate:

– Informal workers are entitled to only Rs 5,000 as a fixed benefit from the government for their first child under the scheme PMMVY (Pradhan Mantri Matru Vandana Yojna).
– There are also some state schemes (such as in Tamil Nadu and Odisha) that provide financial incentives that are higher; however, they are few and far in between.
– Nowhere are these financial benefits linked to wages.

Secondly, implementation is weak: only about 3.2 million women have benefited under PMMVY till August 2018, in spite of over 25 million births in that time as found by an RTI request.

Thirdly, as women in the informal sector are forced to return to work—in many cases before six months—there is a need for effective childcare. Childcare legislation in India is very limited. Recently, the funding from the central government on the National Creche Scheme has been drastically reduced, in a blow for informal workers.

Going forward

There needs to be a strong focus in bringing convergence around maternity schemes for informal workers addressing key current gaps, such as linking financial benefits to wages and allowing for the fluidity of informal work (no fixed employer, multiple job changes, etc) and ensuring that the schemes complement each other. This also means ensuring adequate childcare through the public health system for women from whenever they resume work (even earlier than six months).

For example, anganwadis can be equipped with breast pumps and storage facilities to help mothers express and store breast milk. Finally, Self Help Groups (SHGs), which have successfully organised several million informal workers, should be enabled as vehicles to create solutions and engage and lobby with the government to ensure adequate legislation—a wonderful example is the SEWA Sangini programme that has created a sustainable model of childcare for informal workers and had big wins through engaging and working with the government.

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This article was originally published in Forbes to mark World Breastfeeding Week.

Talk to us: impact@sattva.co.in

THE CASE FOR BUSINESS VALUE IN CSR

The Case for Business Value in CSR

– By Prateek Jain

Business value remains a controversial subject in the CSR ecosystem. There are mixed opinions amongst practitioners on whether it is okay to derive business value from CSR programmes and if so to what extent? Advised by risk averse financial auditors and legal counsels, most companies have adopted a conservative approach in this matter – eschewing programmes and projects that could be construed to be linked to business goals. Those that have ventured beyond this paradigm have largely utilised CSR to achieve the limited goals of Community Risk Mitigation and Reputation Enhancement.

Community Risk Mitigation by providing for the development of surrounding communities has been a staple approach of many manufacturing firms. The rationale behind this approach, is that by building civic infrastructure in local communities, and by catering to the demands of local influencers, manufacturing firms can to an extent ameliorate the friction that exists with local communities due to their extraction of local natural resources. However, most firms have not approached this exercise in a strategic manner – not enough emphasis has been paid to mapping community dynamics and real community needs before embarking on such initiatives. In the absence of such data, decision making on the ground has been driven by unreliable signals from local community leaders – which has limited the business impact of such initiatives.

Sattva_Insights_BusinessValue

Reputation Enhancement through CSR seeks to create positive perception gains (brand value) for companies by associating the company’s brand with resonant social issues and by promoting their work in these areas. Efforts in this domain have ranged from the cavalier – thinly disguised advertorials posing as public service announcements, to the farcical – plaques and signboards on infrastructure projects which are unlikely ever to be seen by the firms target consumers. Very few companies have been able to create robust communication strategies for their CSR programmes – that can reinforce positive perceptions and sustainable benefits. Where such channels do exist, misalignment between a company’s core business interests and it’s chosen social agenda, has limited the uptake of such messaging.

It is our opinion that to fully realise the potential of the Corporate Social Responsibility law, it is necessary for CSR programmes to explore models that can create tangible business value – that which is evident in a company’s topline/bottom line – in addition to those that create measurable social impact. Without such a symbiotic relationship between impact and business value, corporate interest in social good is likely to remain perfunctory. In such a scenario, CSR actions will continue to be dictated solely by compliance and spends are unlikely to ever exceed the mandated 2%.

What then are some models for creating business value through CSR that companies can explore?

1) Market Creation: CSR programmes provide a unique opportunity for corporates to expand their interests beyond their traditional markets and customers. CSR programmes can thus be utilised by corporates to test and refine new business models that allow them to cater to underserved customer groups and untapped markets.

An example of such an approach can be found in the CSR programmes of a leading construction materials manufacturer. This company’s CSR is geared towards expanding the company’s footprint in underserved rural and peri-urban markets by providing youth from these communities with the necessary skills and knowledge to establish their own construction businesses. Over the past 3 years, this company has trained over 1500 youth as a part of this programme, over 30 of whom have gone on to establish their own construction related businesses– an outcome that has had a small but non-negligible impact on this company’s business performance. The ultimate promise of this programme is for it to transcend its CSR origins and be taken up as a core business initiative – a process that is currently underway in this company.

Another example of market development through CSR can be found in L&T Finance’s Digital Sakhi initiative. Digital Sakhi aims to provide digital financial literacy and entrepreneurship trainings to rural women through a training-of-trainers approach. The business rationale for the programme is that by educating women about financial services, and by helping them establish successful businesses, L&T Finance can in the future benefit from any increase in the credit appetite/credit worthiness of this important customer segment.

2) Talent Development: CSR programmes can be effectively utilised by companies to develop, enhance and retain their internal talent pool. As much as it is true, that the social sector can benefit from corporate skills and expertise, it is also true that working to solve wicked social challenges can help corporates develop unique capabilities that sets them apart from their competition. Social problems represent some of the most wicked challenges faced by human-kind. The complex interplay of technical, economic, cognitive, normative and political forces that characterise such problems, require the adoption of unique methods of analysis and problem-solving. By exposing their workforce to such challenges, companies can look to build the capacities of its people in some of these approaches which also have wider business applicability. Systems thinking, design thinking, empathetic listening are just a few examples of the capabilities that exposure to the social sector can help inculcate in employees.

Allowing avenues for employees to engage in meaningful and challenging work, can also help companies to retain prized talent. The sense of fulfilment and achievement that employees derive from being engaged in such work, can add significantly to their overall job satisfaction, which in turn is likely to improve retention rates.

The Genpact Social Impact Fellowship (GSIF) provides an interesting example of a CSR programme that is attempting to create business value in this fashion. GSIF provides an opportunity for Genpact employees to help social organisations solve process related challenges. The structure of the association with the non-profits mirrors a typical consulting engagement, with the fellows working closely with the host organisations programme staff and leadership in an advisory capacity for the period of one year. This allows the GSIF fellows to not only cultivate a strong understand of critical socio-economic issues, but also gives them a hands-on opportunity to apply their Lean, Six Sigma, Design Thinking, Digital and Analytics skills to transform existing processes, making them more effective, sustainable and scalable. After the completion of their fellowships, GSIF fellows are actively re-absorbed back into Genpact’s core organisation – with management paying active interest in their career growth paths. The management team at Genpact strongly believes in the potential of GSIF fellow to become future business leaders at Genpact and looks to invest in them accordingly.

3) Product Innovation: CSR also provides an opportunity for companies to expand their portfolio of products and services beyond their traditional areas of operation. Companies can leverage their core technical expertise to develop solutions that have the potential to deliver business value as well as social impact.

Technology companies have been at the forefront of product innovation driven by corporate responsibility. For example, Microsoft recently launched an Adaptive Controller for the X-Box that allows people with limited mobility to access its flagship video game platform. The Adaptive Controller was developed by Microsoft through strong partnerships with non-profits including The AbleGamers Foundation, The Cerebral Palsy Foundation, SpecialEffect and Warfighter Engaged. Input from these organisations helped shape the design, functionality, and packaging of the Adaptive Controller. This innovation was featured by Microsoft in a 60 second ad titled ‘We All Win’ which was telecasted during Super Bowl 2019. The ad highlighted Microsoft’s commitment to building accessible technology that levels the playing field and creates opportunity for all, ending with the line: “When everybody plays, we all win.”

Another example closer to home is Google’s work in the educational technology space. Google recently launched its BOLO app in India, which leverages the power of Google Voice Assistant, to help improve children’s reading abilities. The app contains a library of stories which students can use to practice their reading. The apps voice recognition functionalities track the students’ reading fluency and provide support and encouragement as required. The beta version of the app is currently available for download in Google’s Playstore, but is also being introduced in low income communities through the help of various of non-profit partners. The BOLO app represents an attempt by Google to further expand and diversify its presence in the Indian market, by providing another solution that specifically caters to the demands of its growing Indian user base.

In conclusion, it is obvious to us that the spirit of CSR must be distinct from the spirit of philanthropy. Where philanthropists seek to redistribute their accumulated gains, CSRs must work to grow the pie – for society and for themselves. As can be seen from the examples cited here, it is indeed possible for companies to operate in such a manner where their own interests align with those of society. It is incumbent upon CSR practitioners and advisors to motivate companies to pursue this path.

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Prateek Jain works as a Regional Sales Head at Sattva. He is passionate about promoting shared value and responsible business practices amongst corporates.

Sattva has been working with various corporate clients to help them define their social impact goals and maximise the return on social investment. Our focus is to solve critical problems and find scalable solutions. We assist companies in formulating their long-term CSR strategy by strategically aligning with business to provide meaningful solutions to social issues.

● You can read more about our work with CSR, here.
● Talk to us: impact@sattva.co.in