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CSR Stories: Communicate it Loud and Proud

Words can tell a great story, but gone are those days. Today, especially when communicating CSR stories, we can go by the saying “a picture is worth a thousand words.”

In fact, communication is a crucial component of any CSR strategy, and shouldn’t be dealt with haphazardly. Failure to notify external and internal stakeholders may keep them in the dark and can lead to a mistaken understanding of a company’s CSR purposes and objectives. As stakeholders are one of the reasons why CSR strategies exist in the first place, they should always be updated on CSR activity. Words, data measurements, and statistics are definitely essential in sharing a company’s focus on CSR, but using more visual and compelling details such as testimonials and case studies to accurately represent a dedication to sustainability, that’s the way to break through. In order to get noticed, bring in a powerful and compelling story that catches the attention of your audience. Having to articulate an authentic story is vital for engaging the target audience to interpret your vision into reality. Knowing Your “Why” Storytelling is imperative to expanding opinions that matter. Most powerful presenters begin with a story about personal impulses that led to the breakthrough idea. A great opening point for crafting your personal “I” narrative is to answer the question, “Why?” As agents of change, sustainability experts prevail outside the pattern of the mainstream community. Uniquely inspired, it presents itself in the terms and words used to contextualize the project. Give Information, Inspiration and Application Data is extremely crucial, but numbers alone cannot influence people. A heartwarming story can, at least, prime the artistic mind to understand the possibilities within the data. Good communicators use information and inspiration, as well as a third procedure: application. Teach your ideas, and motivate the audience to do the same. News: Your Story Once the “I” story is down, turn the content plan into media-sized bites to help communicate a memorable and consistent message that would build your brand trust. A key way to encourage media interest is with compelling statistics and data. Appealing customers through cold calls to action are in full power, especially on social media. No Picture-Perfect Company It is natural for organizations to present only the good side of their company. But stakeholders can be suspicious if all seems too good to be true and understand that as a sign of hiding. CSR ventures should not be portrayed as the organization’s only purpose. CSR activities are combined with the company’s business, and this should be made clear in the CSR stories. Be Relatable To leave a place for communicating with the audience, stay adaptable. Make your story flexible by recording it in classified pieces so that it will be easy to mix and match. Communication involves the packaging of ideas for diverse audiences and is an essential skill for agents of change. Far more nuanced than it appears, communication involves a broad range of techniques and strategies. Storytelling is one of them — but it’s a significant one. Breaking systems and changing them takes a lot of work, and it can push anyone out of their comfort zone. The amazing thing about keeping a narrative in arsenal is this: people can shoot down your date or ideas, but one thing they cannot deny is the story. Image References:
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CSR Compliances – Permitted areas of intervention & Computation under The Companies Act

Although there has been a mass emergence of NGOs and charitable institutions over the past few years, India continues to be veiled by socio-economic issues that are detrimental to its progress. The government sees this as a major challenge and has introduced policies to eradicate it completely. The main objective—social, economic, and environmental development to pave the way for self-sufficiency and sustainability. One of the biggest steps towards securing a better future for the company came in the form of the Corporate Social Responsibility mandate. Section 135 of the Companies Act, 2013 defines CSR as “a way of conducting business by which corporate entities visibly contribute to the social good.” In other words, socially responsible companies do not use resources and engage in activities to increase their profits but to blend economic, social, and environmental objectives with their own operations and growth. Does Your Company Make The CSR Cut? Until the Companies Act stepped in to make CSR mandatory for corporations, it was merely a voluntary step. Well, the times have changed. According to the Act, every private or public company in India, with a net worth of INR 500 crore, a turnover of INR 1,000 crore, or a net profit of INR 5 crore needs to contribute a minimum of 2% of its average net profit in the past 3 financial years to CSR activities. However, failure to make the required disclosure in the Board report results in the following penalties under Section 134 of the Companies Act:
  • A minimum fine of INR 50,000, which can go upto INR 25 lakh
  • Imprisonment for a term extending up to 3 years with a minimum fine of INR 50,000 that can go upto INR 5 lakh
Areas Of Focus Under CSR Under Schedule VII of the Companies Act, the CSR activities practised by corporations should focus on certain areas. However, note that the areas, mentioned below, are open to interpretation as per the company’s discretion as long as they encapsulate the essence of the subjects .
  • Efforts to terminate hunger, poverty, and malnutrition, in addition to, focus on health care , preventive health care, and making safe drinking water accessible to the public
  • Promotion of proper sanitation practices including contribution towards Swachh Bharat Kosh devised by the Central Government
  • Construction of shelters for women, elderly, and orphans; encouraging gender equality, women empowerment, and curbing discrimination of the economically and socially backward masses
  • Endorsing education and paying extra attention towards education and training of children, elderly, women, and differently abled in order to increase employment opportunities and provide quality livelihood
  • Respecting the ecology, environment, and wildlife through sustainable approaches and nurture practices to maintain air, soil, and water health besides contribution to the Clean Ganga Fund advocated by the Central Government in order to reverse the damages done to the River Ganga
  • Promotion and training of athletes participating in rural, paralympic, national, and Olympic events
  • Safeguarding national heritage, art, and culture; restore monuments holding historical significance; configuring the setup of public libraries; and developing traditional arts and handicrafts
  • Adopting measures to protect the interest of war veterans, widows, and their dependents
  • Contribution towards Prime Minister’s National Relief Fund, Emergency Fund, or any other funds set up by the Central Government for relief, socio-economic development, and welfare of SC, ST, OBCs, minorities, and women
  • Financial aid to technology incubators situated within academic institutions, approved by the Central Government
  • Slum area and rural development
Activities Not Considered As CSR As per the Companies Act (2013), CSR activities should be implemented as a project or a programme. However, they should not include the following:
  • CSR activities practised outside India
  • Practices focused on employees and their immediate dependents
  • Events such as advertisements, marathons, sponsorships, television programmes, awards, and charitable contributions
  • Contributions made towards political figures/parties
  • Expenses incurred as a result of any act/laws such as Land Acquisition Act or Labour Laws.
Computation Of CSR Expenditure As mentioned earlier, companies need to spend at least 2% of their net profit of the past 3 financial year on CSR activities. It’s the duty of the Board of Directors to ensure that the stipulated amount is being spent on CSR initiatives. However, it’s important to note that if profit computation has been done under the Companies Act (1956), they needn’t be recomputed under the 2013 Act. Given below are the particulars as per Section 198: In the process of computation, credit shall not be awarded for the following amounts:
  • Excessive surplus in profit and loss account upon enumeration of asset or liability at fair value
  • Profits obtained through premiums on shares and debentures that are issued or sold by the company
  • Profits fetched on the sale of any undertakings of the company or its subsidiaries, and profits of capital nature
  • Profits made on the sale of forfeited shares by the company
  • Variation of carrying amounts for an asset or liability identified in equity reserves
  • Gains made on the sale of any fixed assets under the company’s undertaking(s), unless the company’s business itself deals with the sale or purchase of the aforementioned assets. However, if the sale amount of the asset exceeds the written down value, credit shall be awarded for the excess as long as it doesn’t exceed the difference between the original cost of the fixed asset and its written down value
The listed sums below shall not be deducted whilst making the computations:
  • Variation in the carrying amount of an asset/liability under equity reserves, or excess in profit or loss account during unbiased, potential market price approximation of the asset/liability
  • Super tax and income tax to be paid by the company under the Income Tax Act (1961) or any other tax levied on the company’s income that is not a part of the tax imposed by the Central Government on excess, abnormal profits, or special circumstances
  • Loss of capital nature or undertaking(s) of a company without the inclusion of the excess on the written down value of any asset that is demolished, discarded, or sold over its scrap value or sale proceeds
  • Voluntary compensations, payments, and damages made otherwise in the case of a liability originating from a breach of contract
The fact that CSR initiatives brought about by the Companies Act will transform corporations and the lives of people is undeniable. Of course, there are political setbacks and loopholes to deal with. However, it must be seen as the right thing to do whilst keeping the nation’s progress in mind.   Image References:   shutterstock shutterstock
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Baseline Surveys – Choosing The Right NGO For CSR Funding

Companies in India with a net worth of INR 500 crore, a turnover of INR 1,000 crore, or a net profit of INR 5 crore need to contribute a minimum 2% of their net profit in the past financial years to CSR activities as per the Companies Act 2013. Most corporates prefer to implement this responsibility through NGOs that are already working for the betterment of the society. Tying up with an NGO not only helps the company achieve their social goals but also allows them to improve their brand image. While tying-up with an NGO seems like the easiest thing to do, finding an NGO worth funding is not. A baseline survey is one of the methods used by corporates to pick an NGO to sponsor as a part of their CSR initiatives. Let’s look at what this method entails. Baseline Survey – The Head and Tail of It Baseline survey, in the simplest form, is the analysis of a current situation to help identify the starting point of any project. The purpose is to build an information base to assess and monitor the progress and effectiveness of a project if it has already been completed.  The data collected also helps to decide whether starting a project is worth it in the first place. With this method, tools and instruments of the highest standard are designed for the collection of data to make cross-site comparisons easy. A baseline survey helps in choosing NGOs that use a planned approach in their developmental activities, and focus on the general welfare and rights of the unprivileged groups in society, environmental concerns, and animal welfare. Generally, an external organization is hired to carry out the baseline survey work. Though sometimes, an internal project management team can also carry out the survey. The below listed are few areas to be assessed before selecting the implementing partners. Objectives and geographic reach A well-established NGO may rank well on governance and processes but may not have a suitable project that has defined in the CSR policies of the company. Hence the first and most important is to understand the vision and objectives of the NPO and ensure that it is in line to the CSR goals of the company.  Secondly the community connects. A national level NGO may rich with name and fame but may not be able to perform well at your desired location compare to a local NGO in the area. Impact One of the most important factors that companies should look at is the impact of an NGO’s programs. Comparing the beneficiaries number while choosing implementation partners is not feasible because of varied definitions of impact across the sector, as well as the metrics used to determine impact. However an eye in to the past activities with logic may provide a picture of the same. Scalability & Sustainability The ability to scale up and its sustainability plans are a matter of concern before one partner with an NGO.  It is important because NGOs should capable to build their capacity or to widen their reach as per the needs or demand of both the society and donor as well. Today the capacity and its reach of the identified NGO might be sufficient enough to take up the CSR activities of your company. But in future as the company grows, the NGO also should be ready to widen their operation. On the other hand the sustainability plans of implementing partner are also important. A block in the flow of fund in any reason should not discontinue the project in halfway.   Transparency The problem of reporting is compounded by the lack of adequate regulation for NGOs to disclose information to the public, resulting in irregular reporting and ad hoc reporting procedures. This presents a serious problem to companies that require information about the NGO and their work for their own compliance.  A Comprehensive due Diligence NGOs applying for CSR funds need to submit a few documents, the list of which depends on the social objectives of the concerned corporate. These documents are properly scrutinized and only then the application taken forward. The list of documents includes:
  • Registration Certificate under Section 12A under Income Tax Act, 1961
  • Trust Deed / MoA of the organisation
  • The NGO has valid 12A or 80G certificate
  • Mission and vision statement of the NGO
  • IT Exemption Certificate under Section 80G
  • IT Exemption Certificate under Section 35AC, if available
  • Permanent Account Number (photocopy of the card)
  • Annual Report of past three years
  • Past two years external audit reports (if valid) 
Baseline Surveys – How Do They Help? Most companies have a CSR committee that specifically handles all their CSR activities. This includes hiring an external organisation to carry out the baseline survey, evaluating their report, and then making a choice while keeping the company’s objectives in mind. Without a proper baseline study, it becomes difficult to monitor and evaluate the performance of various NGOs to select one. Most NGOs work on specific areas like children and women welfare, drinking water and sanitation, education for all, animal welfare, environmental degradation, proper disaster management, and rural development. The choice depends on the objectives and goals of the concerned corporate and a baseline survey helps in making the selection process easier. A baseline survey also helps in evaluating the future performance of NGOs by setting realistic indicators for achieving their future goals and targets. An NGO might approach a corporate with a specific program in mind for which it requires funding. The corporate can then opt for a baseline survey to analyze and evaluate their program and take a final call on the sponsorship. Corporates can conduct these surveys even when not approached by an NGO and can reach out to one if they see favorable results. Apart from helping a company pick an NGO to fund, a baseline survey can help in the following ways:
  • It helps in understanding the primary and specific objective of various social programs and determining how realistic they are.
  • It helps identify the organizational capacity and the background of the NGO and whether it can actually carry out the project and ensure its success.
  • With a baseline survey, the corporate can know the nature of the NGO – whether it’s community, local, or national-centric, along with the core activities and purpose of the organization.
Some of the other areas covered in baseline surveys include project management skills and expertise, length of existence, organization structure, and target population group. A baseline survey, if used efficiently, can be of great help to corporates who are looking to finance a NGO in an effort to expand their CSR horizons.   Image Reference: shutterstock wikimedia.org