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

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

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

Conservation Research in India – Gaps and Opportunities

Conservation Research in India – Gaps and Opportunities

– By Shrutee Ganguly and Arnab Mukherjee

India, in addition to being a land of incredible biodiversity, is also the second most populous country in the world – housing ~18% of the world’s population with only ~2.5% of global land share. Increasingly, this rapidly growing population coupled with a push for strong economic growth, leading to increased demand for resources, has placed tremendous stress on the natural ecosystems of this country.

Conservation research is essential to enable science-based management of the environment in its myriad forms such as freshwater availability, efficient use of natural resources, air pollution and biodiversity. Research not only impacts the immediate choice of conservation methods but is also expected to influence government policies which in turn has a longer-term impact on the ecosystem.

The Union Government along with NITI Aayog provides the necessary legislation and lays down the thrust areas for conservation research and related initiatives in the country. Relevant line ministries (such as Ministry of Water Resources, Ministry of Environment, Ministry of Agriculture etc) draw up missions, schemes and programmes along the lines of which specific projects are conceived and funds allocated. The state governments also allocate funds for conservation related initiatives through relevant departments such as the forest department and water resources department. Together, the Union and State Governments provide the lion’s share of financial assistance for conservation effort in the country.

Yet, for NGOs looking to conduct research in conservation, this source of funds remains largely inaccessible.

There is a growing perception in the NGO world that the government metes out preferential treatment to the autonomous institutes and central universities, given that they are funded by the government. Government officials however deny any such preference and point towards various factors such as quality of proposals, NGO capability and so on as the key reason for this apparent bias. Hence, international grants from donors such as US Fish and Wildlife Service, Rufford Foundation, IUCN, GEF and others continue to be the lifeline of most NGOs.

Increasing number of corporates are looking to fund environment projects, largely in areas such as waste management, rainwater harvesting and funding flagship government schemes such as Namami Gange. Conservation efforts however continue to remain low on the priority list of most corporates hence meagre amount of CSR funds are allotted to it if at all. There are some notable exceptions such as Godrej, DHL, NSE and Jet Privilege. In addition, corporates prefer quicker returns or visible validation of impact and hence focus more on implementation projects as opposed to research.

Our view is that allocation of CSR funds for conservation research requires a shift in corporate vision from immediate or short-term returns to a more longer-term strategic perspective where a study on a specific aspect of conservation is followed up with on-ground implementation.

The situation, however, is not as desperate as it appears for NGOs. Through extensive research and client engagement, Sattva recognises the following areas that can be leveraged to function successfully within the existing conservation ecosystem.

Fig 1. Five levers to create competitive advantage in the conservation research space

Sattva, through its experience in the environment space has emerged as a trusted advisor for corporates and organisations. Over the years, Sattva has developed multiple models of engagement to support sustainable solutions on the ground for maximum impact.

Fig 2. Sattva models of engagement

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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. Several corporates have been a partner to many such collaborations where effective CSR programmes have strategically aligned with business and have provided meaningful solutions to social issues.

● To read more about our work with CSR, check: https://www.sattva.co.in/our-work/
● Talk to us: impact@sattva.co.in

CORPORATE SOCIAL RESPONSIBILITY: A (NON-CLICHE) PRIMER

CORPORATE SOCIAL RESPONSIBILITY: A (NON-CLICHE) PRIMER

Sattva_Insights_CSR-Primer1

It has been six years since the 2013 CSR law mandated certain companies to start spending a stipulated amount towards social responsibilities. While compliance and implementation have been getting streamlined with each passing year, there are many questions that are asked by the curious: Which corporates have the most impactful CSR programme? What is a typical CSR cycle, from genesis to completion? What makes a good CSR programme? Why do some programmes fail? What has been the impact of India Inc. CSR in the last 5 years? Who are the biggest beneficiaries of CSR? Where are the biggest gaps today in CSR in terms of demand and supply?

Since 2009, we at Sattva have worked with 70+ corporates on their CSR programmes in a multitude of capacities: To define the CSR strategy of a company, to on-board the most relevant partners, to measure impact of existing CSR programmes, to audit programmes, to design employee volunteering programmes and to be strategic advisors and partners to the CSR unit as a whole.

As an organisation that has been in the space for the last ten years, what have been our biggest learnings? And how are those learnings helping to shape our CSR practice this year?

1. The range in the CSR maturity cycle is large: While some have set systems and are pivoting towards innovation in their programmes, some still don’t have their focus areas/strategies defined.
While mature, corporate giving organisations such as the Tata Group, Reliance Industries and L&T have developed internal processes and standards to execute corporate giving, the ecosystem by and large is still in the process of developing standard practices and processes to execute effective CSR. Even today, many CSR functions share resources with other functions such as Legal, Finance, Marketing or HR. Many companies still lack a dedicated CSR team. Institutes like Indian Chamber of Commerce have started courses on CSR. However, in our view, knowledge is yet to be standardised across organisations, systems and programmes.

2. Six years into the law, many CSR teams are looking to make data-based portfolio strategy and fund allocation decisions, to ensure highest impact from their CSR investments.
Based on Sattva’s analysis and projections, the market for CSR has the potential to unlock more than INR 30,000 crore by 2021. As companies grow and become compliant under the law, the need to identify focus areas and regions, and subsequently, to find implementation partners for their CSR programmes will increase. But the existing ecosystem does not support effective matchmaking between NGOs and corporates based on their CSR focus. Companies are also struggling to identify what sectors to focus on that align well with their strengths – in terms of the products and services they provide.

According to the annual State of CSR report by KPMG,44% per cent of the companies have reported a delay in implementation or exploring opportunities as their reasons for not being able to comply with the law, or having spent less than the prescribed amount on CSR in 2017-2018.

3. There is an increasing focus on outcomes and impact created, along with compliance to spend the required amount by the CSR law.
Though the law does not mandate reporting of numbers of people benefitted, it is heartening to see that more and more companies have started to report on people impacted in their CSR reports.

Sattva_Insights_CSR-Primer2
(Source: IDR Online)

However, companies are often still confused between output and outcomes. It is not merely enough to evaluate the success of their CSR programmes on the basis of number of people impacted, but it is also important to know what kinds of change their programmes created on -the ground, in the mid-term and long-term.

How can Sattva help?
• As CSR cycles are maturing, the focus is now on making programmes more efficient. We are excited to announce that Sattva has developed its technology platform SHIFT, that we envision to be the fulcrum of our CSR advisory services. We have channelled years of CSR experience advising clients on their programme design, implementation, management and evaluation into this innovative technology platform to help corporates and NGOs translate their intent into real on-ground impact. We will cover SHIFT in more detail in our next volumes of this CSR compendium.

• Sattva’s proprietary CSR framework has been developed to address this lacuna. Over the last 5 years, we’ve used this framework to help 30+ clients define their CSR strategies, focus areas and programmes thereof [We will cover this is in further detail in our next volumes]
Sattva_Insights_CSR-Primer

• India Data Insights (IDI) is Sattva’s in-house data visualisation platform to guide corporates make informed decisions while building programmes – a snapshot from the IDI platform below:
Sattva_Insights_CSR-Primer3
(Source: India Data Insights – Geographies and CSR Spend v/s Poverty Rate)

This is a foreword to a 24- part annual compendium that will be published over the course of the next 12 months.

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. Several corporates have been a partner to many such collaborations where effective CSR programmes have strategically aligned with business and have provided meaningful solutions to social issues.

● To read more about our work with CSR, check: https://bit.ly/2G9g2UZ
● Talk to us: impact@sattva.co.in

IT spent Rs 5,091 crore on CSR between 2014 & ’17

Education is the most favoured choice of Indian IT cos, followed by central govt schemes that get about 14% of CSR money.

IT firms have spent over Rs 5,091 crore in corporate social spending between 2014 and 2017, said Sattva, a startup that looks at data to measure social impact by companies. Tata Consultancy Services led the spending with over Rs 1,091 crore in the period.

The government mandates that firms should spend at least 2% of their average net profits made in the preceding three years on CSR. The trend, in terms of geography of spend by IT services firms, differs from the overall trend.

After pan-India projects, which is the highest in every category (in case of IT firms accounts for half their CSR), overall CSR spend by corporates is concentrated in the Western region.

In case of IT firms it’s concentrated in the South (1/3rd of their CSR). Education is the most favoured choice of Indian IT companies, followed by central government schemes that get about 14% of CSR money.

In the category of ‘startups’ (tech/innovation, etc), Sattva found only Chennai-headquartered Zoho Corporation contributing any significant sum to CSR. Zoho has reported CSR spend of Rs 25.5 crore on Zoho University.

(This article was originally published in Economic Times. All pictures and images, courtesy the publication.)

The Government is serious about CSR Compliance – Are you?

Introduction

Corporate Social Responsibility (CSR) suggests that the responsibility of the for-profits operating within society, is to also contribute towards its economic, social and environmental development and well-being. The core objective of enforcing a CSR mandate is that businesses cannot succeed in isolation, especially when society at large fails to prosper. The Companies Act, 2013 is therefore, a landmark legislation that made India the first country to mandate and quantify CSR expenditure. This move was an attempt by the government to partner with business houses on the national development agenda.

The Story So Far

It has been close to 5 years since the government mandated that corporates with :
● a net worth of INR 500 cr. or more
● or a turnover of INR 1000 cr. or more
● or a net profit of INR 5 cr. or more

in a given financial year, must spend 2 percent (to be calculated as per Section 198 of the Act) of their average net profits on socially relevant projects as defined in Schedule VII of The Companies Act.

However, even today many corporates eligible for CSR do not contribute to development projects and therefore run a risk of being sent notices for non-compliance and non-conformance of CSR norms.

While a large chunk of eligible corporates have adopted the mandate as an opportunity to further their corporate citizenship and not just as a tick box activity, there is still a large share of eligible companies who are yet to deploy their CSR funds.

SocialDisruptors

SocialDisruptors

Three years after the law came into existence, that is till 2016-17 – close to half of 19,933 eligible companies have not spent any money as part of their CSR obligations (~9468 companies) and as many as 15,422 companies spent less than the prescribed CSR amount during the same period. In addition to the above citations, there are examples of companies as well who have spent upwards of four times of their prescribed CSR budget in the financial year.

However, as we see non-compliance has reduced year-on-year. A recent survey published by NGOBOX (
http://ngobox.org/full-news_CSR-Outlook-Report-by-NGOBOX-analyses-top-359-companies-NGOBOX_22359) revealed interesting insights on CSR compliance among India’s biggest 359 companies which together account for 3/4th of the total CSR spend:

● CSR compliance among these companies stood at 93% for the year 2017-18 up 2% points compared to previous year.
● Metal, mining and mineral (138%) followed by Oil, Drilling, Lubricants and petrochemicals (104%) sectors emerged as the highest CSR compliant industries followed closely by Auto and Auto ancillaries.

Government Initiatives/ Steps Towards Compliance

Things are looking up. The Ministry of Corporate Affairs has also stepped up its effort to encourage corporates to comply with the CSR provisions by setting up:

● National CSR Data Portal –The National Corporate Social Responsibility Data Portal is an initiative by the Ministry of Corporate Affairs, Government of India to establish a platform to disseminate Corporate Social Responsibility related data and information filed by the companies registered with it (https://csr.gov.in)

● National CSR award – The Ministry of Corporate Affairs has instituted National CSR Award (NCSRA) to recognise CSR for inclusive growth and sustainable development. This Award seeks to recognise the companies that have made a transformative impact on society.

Along with the initiatives mentioned above, the ministry has also taken a few steps to increase compliance by:

● Reconstitution of a high-level committee on Corporate Social Responsibility 2018 (HLC-2018) under the Chairmanship of Secretary, Ministry of Corporate Affairs (MCA) to review the existing framework and guide and formulate the roadmap for a coherent policy on Corporate Social Responsibility.

● Centralised Scrutiny and Prosecution Mechanism (CSPM) to promote enforcement of CSR provisions. CSPM has been tasked to start with examination of records of the top 1,000 companies mandated to spend on CSR. The CSPM team of inspectors are issuing show cause notices and prosecution proceedings against non-compliant companies.

In the latest round, prosecution proceedings against 284 companies and show cause notices against 5,382 companies have already been issued.

In view of these efforts, it is clear that the government is serious about bringing rigour and strong scrutiny to ensure the CSR law is strictly followed in the near future.

Current challenges and what Corporate India Can Do

Corporates often find that they have unutilised funds in the last quarter of the financial year. This could be because of several reasons:

● long cycles in identification of impactful projects or/and credible partners
● uncertainty on the exact figure of what the total CSR budget may be due to the change in company profit
● ambiguity in the legal requirements
● difficulties in developing the strategic vision in a multi stake-holder environment
● challenges in planning and executing operations through the year

Some typical avenues that corporate India chooses to disburse its CSR funds are:

● Contribution to the Prime Minister’s National Relief Fund
● Contribution to CSOs working in the chosen area of focus by the corporate
● Contribution to Corporate foundations setup to undertake CSR activities exclusively (Own or External)
● Contribution to multi stakeholder platforms founded to address areas of concern.

Although last minute, it would be imperative for corporates to consider some key points while making their social investment decisions in order to move from a compliance-led CSR function to a more strategic CSR function:

● Recognising CSR as a strategic corporate function : CSR law is here to stay. Recognising the strategic and legal significance of CSR and incorporating it into long-term corporate strategy is imperative.
● CSR Vision : Alignment and long term commitment to company’s CSR anchor ( focus area/audience/geography ) is key in creating long lasting impact and corporate legacy.
● Measure to improve, not prove: A robust monitoring and evaluation mechanism acts well as the steering wheel required to continuously improve CSR interventions and make timely course corrections.
● Outcome first: An outcome led approach as against an input led approach goes a long way in establishing the social impact goals the corporate wants to achieve.

There is a need to fund projects which will not only impact the last mile recipient of the intervention but also bring the culture of empathy and service within the organisation.

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. Several corporates have been a partner to many such collaborations where effective CSR programmes have strategically aligned with business and have provided meaningful solutions to social issues.

● To read more about our work with CSR, check:https://bit.ly/2G9g2UZ
● Talk to us: impact@sattva.co.in

Urmi Patil

Urmi is a part of our Consulting Services team in Mumbai, supporting the design and implementation of CSR projects.

Before Sattva, she worked in southern Gujarat assisting Ph.D. scholars with their primary research and learning different participatory tools of engagement. She has worked in Government Primary Schools in Uttarakhand for two years where she was able to support schools on processes that improved the learning outcomes of children and enhanced participation of the community members. She has also worked with Mahila Mangal Dals, Yuvak Mangal Dals and Self Help Groups for their capacity building through community-based stakeholder mapping.

Urmi has a Bachelor of Arts, with Economics Honours from Christ University.

Shrutee Ganguly

Shrutee is part of the Consulting Services team, Delhi, and leads engagements with corporate and strategic account clients. She manages a team that works with various implementation partners and NGOs to create long term sustainable impact. Her role demands her to manage customer experience, define strategy and create valuable outcomes in the ecosystem.

Before Sattva she has had 16+ years in diverse corporate domains – banking, product management and consulting. Her key areas of expertise are Operational Excellence; Process Re-engineering, Programme Management, Coaching, Relationship Management & training. She has worked with senior leaders and operations staff to understand cultural dynamics, manage expectations, streamline processes and deliver results. It is her belief that the social sector needs some of these skills to streamline and structure their efforts to create impact and value. At Sattva, Shrutee has worked with the largest education non-profit in India to co-create models to recognise needs of middle management govt officials who are responsible for the policy and implementation at schools. She also worked closely with the client’s programme team to run pilots and gather relevant inputs from teachers and community on teaching practices, child engagement, good practices and challenges.

Shrutee is a post graduate in computer applications from Madras University and an IBM certified Lean coach.