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.
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.
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:
Baseline Surveys – How Do They Help?
- 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)
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.