1. Why monitoring CSR spends is key to social reform

Why monitoring CSR spends is key to social reform

The Finance minister Arun Jaitley in his statement in Rajya Sabha said that during 2014-15, about Rs.6,337 crores was spent on CSR activities1. This number would only increase in the coming times with more companies beginning to report their CSR expenditure. CSR is no more just a buzzword, it is slowly becoming a full-fledged strategy […]

By: | Published: May 17, 2016 7:06 PM
Rupee With such large expenditures being made towards CSR, it becomes imperative that the projects are monitored and the outcomes are evaluated. (PTI Photo)

The Finance minister Arun Jaitley in his statement in Rajya Sabha said that during 2014-15, about Rs.6,337 crores was spent on CSR activities1. This number would only increase in the coming times with more companies beginning to report their CSR expenditure. CSR is no more just a buzzword, it is slowly becoming a full-fledged strategy that governs, or should govern, a company’s interactions with all of its stakeholder- regulators, potential customers and staff, community, suppliers, and the civil society.

With such large expenditures being made towards CSR, it becomes imperative that the projects are monitored and the outcomes are evaluated to ascertain whether the objective with which it was made mandatory, is achieved. “How do we make sure that the money we are spending on CSR is being well spent and that people for whom it is intended are benefitting from it” is a sentiment echoed by many companies. There is likelihood of greater accountability that Companies will bring into the implementation of activities related to social development.

Rising awareness about the CSR legislation has led to stakeholders raising queries about the way the companies are spending this money and the compliance levels. There have been concerns about the monitoring and evaluation mechanism of such huge expenditures. A high level committee setup by the Government under the chairmanship of Shri Anil Baijal, former secretary to Government of India, to suggest measures for improved monitoring of CSR activities has recommended against the involvement of Government in monitoring and the onus lies solely on the CSR committee of the companies. This puts additional responsibility on the CSR Committee and the Board members to make sure good programmes are designed and managed well.

A pre-requisite for an effective monitoring mechanism is a well thought out CSR strategy and implementation plan defining the inputs and expected outputs and outcomes of the intended activities. A comprehensive plan for social development would not only yield the desired results from the CSR activities it would also lead to ease of operation for the corporates who till now have been engaged primarily in business related activities.

A stringent monitoring mechanism not only helps to gauge and review the progress, it also helps to identify gaps, if. Evaluating the projects can help assess whether the desired outcome and impact has been achieved and the benefit is indeed reaching the intended beneficiaries. With a robust monitoring mechanism in place, the companies would be better equipped to plan their programmes and also engage with multiple stakeholders who have interest in their CSR activities. Needless to say monitoring should be done to assess the progress made on the programme side as well as on the financial utilisations.

Most programmes are carried out with the support of NGOs who have experience of working on the ground. This association can be a rich one where each partner adds value to the entire process. As an example, effective monitoring is possible by creating a mechanism to collect relevant data that can be monitored periodically as well as by listening to the voices of beneficiaries to see whether the desired outcomes have been achieved. Whereas the NGOs can help by making use of participatory processes, some other resource agencies can develop their capacities to develop log frames. Years of working in the social development sector has led to the development of excellent tools which should be used to monitor programmes. Participatory research has several benefits. In addition to collecting the required data, it can be an empowering process for the beneficiaries where they get to discuss and analyse their problems, prioritize these and also suggest possible solutions.

On the other hand the Companies can also bring in efficient mechanisms for monitoring. As companies continue to expand their CSR projects geographically and across themes, technology would play a significant role in planning and monitoring and breaking the geographical barriers. It would serve as an economically viable solution. Companies and their CSR committees can review real time data aggregated in a single location with technology enabled monitoring tools which would help in decision-making and necessary course corrections. In this era where technology has revolutionised the way companies do business, the role it can play in the way they undertake social development cannot be undermined, especially where the scale of programmes is large. However, it must also be understood that all geographies do not have the infrastructure required to use technology, not to mention the problem of connectivity even in those areas where infrastructure is available. Besides, capacity development is needed for the staff to make use of technology. So while technology is an enabler it should be used after assessing all these factors.

From our experience of working and interacting with a number of Foundations, one can say that monitoring mechanisms need to be strengthened. The focus of monitoring is largely on the outputs. Unless it moves to assessment of outcomes and impact it creates, the usefulness of the programmes in changing the lives of people would remain uncertain. Similarly many NGOs give greater emphasis to planning and executing activities on the ground, conducting participatory research to understand the problems and empowering people rather than monitoring the programme. While they have very good experience of working with people, monitoring of these programmes is often not very robust and is considered an additional responsibility. A close partnership between the two – where there is sharing of strengths – can help in making monitoring more effective.

(The author is Director – Advisory Services, EY India. Views are personal)

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