The announcement to allow funds spent on COVID-19 relief work as CSR spend has created a win-win situation for companies
By Nishant J. Parekh
With growing awareness about corporate social responsibility (CSR) among stakeholders, achieving social goals is as important as delivering shareholder value and profitability. “Corporate Social Responsibility” or CSR is a concept that aims to make a company socially accountable to itself, its stakeholders, and the public at large. Through their CSR practices, companies are conscious of the kind of impact they have on all aspects of society including economic, social, and environmental. It is a way of giving back to the society for the various resources it uses to run its business.
Like it is rightly said, ‘Money belongs to you, but resources belong to the society’.
Today, the entire world is facing and overcoming a crisis of a magnitude which no one had anticipated. The much-dreaded Coronavirus (COVID-19), a pandemic declared by the World Health Organization, has shaken the entire world and the economy at large.
In view of the spread of COVID-19 and the decision of the Government of India to treat this as a notified disaster, the Ministry of Corporate Affairs (vide its General Circular No. 10/2020 dated 23rd March, 2020) was quick to clarify that spending of CSR funds for COVID-19 shall be considered as an eligible CSR activity.
Apart from contribution to the PM CARES Fund and State Disaster Management Authority, expenditure incurred on preventive health care and sanitation, ex-gratia to temporary/casual workers over and above daily wages, providing quarantine facilities to those affected, amongst others, shall be considered as CSR spend.
This step was welcomed by Corporate India. The announcement to allow funds spent on COVID-19 relief work as CSR spend created a win-win situation for companies having an existing CSR obligation, who wanted to contribute to relief work and meet statutory requirements of The Companies Act at the same time. The response to the Government’s call to support COVID-19 efforts has been overwhelming. Crores have been donated to various Government funds.
We have also come across many corporates who are looking for NGO partners working in the areas where they have factories, plants or other setups. Those in remote or rural areas are especially well-versed with the existing challenges of those communities and the compounding effect that COVID-19 would have. Moreover, they feel connected to the struggles of those in the area after having worked there.
Considering the huge sum of funds at stake for the relief efforts, corporates are struggling not just in finding a reliable NGO partner but also in figuring out a way to monitor and track the use of these funds and assessing their impact.
Over the last few days, HelpYourNGO is continuing to recommend programs that meet the donor’s giving strategy after the program information has been financially and qualitatively assessed by us beyond statutory fiscal audits. Through our donor advisory services, we help individuals, foundations and corporations connect to trustworthy and high impact NGOs across India. Our team continues to have virtual meets with the NGO’s key program personnel (right from the Trustees to the program and field officers) and is in regular touch with the implementation partners to monitor the program progress and provide regular updates and periodic reports to our donors regarding their fund utilisation.
While it is heartening to see corporates come out in support of COVID-19 Relief programs, let us, at an individual level, pledge to help and make an impact in our own little way.
‘To give pleasure to a single heart by a single act is better than a thousand heads bowing in prayer.’ – M.K. Gandhi
The author is head – Research and Advisory Services, HelpYourNGO