The landscape of Indian business is unlike what it was ten years ago. The introduction of the Corporate Social Responsibility (CSR) mandate in 2014 through Section 135 of the Companies Act sparked a transformative wave across the country’s corporate sphere. This regulation compels companies to meet defined sales and profit thresholds and allocate a minimum of 2% of their annual profits to CSR initiatives.
What’s happening today?
Today, the conscientious implementation of CSR has discovered substantial capital and ignited a surge in social innovation. It has catalysed diverse impactful programmes addressing critical societal issues nationwide, significantly benefiting millions of people. This shift underscores how CSR has become a powerful force for positive change, bridging the gap between corporate success and social responsibility in India.
Over the decade, this mandate has shifted philanthropic efforts towards strategic policies, emphasising corporate contributions to sustainable national growth. Notably, this requirement has broadened the scope of addressed issues, from education and poverty to environmental sustainability, training, development, and combating drug abuse. In summary, the CSR law has unlocked the social sector’s cumulative capital worth ₹217k crores. Therefore, to say that corporations, through their CSR efforts, have contributed to the socio-economic progress of India would be an understatement.
Indeed, the next decade also appears promising. The future of CSR in India appears to be offering much more.
What’s the promise of tomorrow? The future of CSR in India
In contemporary times, this directive has propelled CSR to the forefront of corporate agendas. It involves top-tier executives and board members in crafting strategies and ensuring their execution—a level of engagement previously uncommon.
Corporations today have dedicated CSR teams, with 85 per cent appointing designated leaders to drive these initiatives forward. This organisational shift underscores a commitment to impactful, long-term community investment. ‘Dus Spoke India Inc’, a report by The Bridgespan Group, suggests that in the next decade, the CSR expenditure in India will reach almost ₹120k crores with the significant involvement of CSR leaders.
The next decade awaits a time of a paradigm shift from merely creating impact to catalysing transformative change. Collaboration emerges as a pivotal priority, setting the course for CSR in the upcoming decade. Leaders foresee a future marked by multi-stakeholder projects involving partnerships with governments and philanthropists. This trend aims to expand collaborative efforts within corporations, hindered by limited awareness, concerns over attribution and visibility of outcomes.
The future of CSR in India is to broaden project horizons, easing governments’ adoption and scaling of CSR endeavours while philanthropists unite resources and capabilities. According to the India Philanthropy Report 2024, fostering collaborations that blend technical know-how, social initiative stewardship and funding is crucial. An example is the SBI and USAID’s India Health Alliance alliance, which aims to bolster the healthcare infrastructure.
Moreover, innovation takes center stage as organisations increasingly invest in cutting-edge technologies and platforms to enhance government efficacy. Supporting incubators for social startups aims to cultivate sustainable impact, while initial project funding that can later scale across both public and private sectors contributes to this strategic approach.
Branching out
Looking ahead, the future promises increased capital, a stronger focus on impact and a heightened commitment to sustainability. The trajectory of Indian agriculture hinges on sustainable and inclusive practices, with CSR playing a pivotal role in this transformation. By integrating technology and making strategic investments, CSR has the potential to bolster rural economies significantly.
While healthcare and education currently dominate CSR expenditures, absorbing nearly half the total funding, other sustainable sectors are poised to attract increasing CSR investments in the coming years. Looking ahead, the policy also appears poised for stability shortly, accompanied by enhanced incentives for CSR expenditure.
In the future of CSR in India, industry leaders anticipate a shift towards directing CSR funds to the North-East regions and island territories. They envision a comprehensive national development strategy. There is an expectation that companies will interact with local government authorities to implement CSR better. Successful innovations should prompt governments to scale them to state or national levels.
As underscored by experts, there needs to be an enabling ecosystem. The vision is to cultivate a nurturing environment through research investments, foster knowledge exchange, establish collaborative platforms and host sector-wide gatherings. There is a critical need for a unified platform where nonprofits, CSR organisations, and government bodies can engage in dialogue, foster partnerships, and share collective knowledge to ensure networking and discovery of collaboration opportunities.
Smile Foundation creating change through CSR partnerships
The aim is to bolster the social sector by enhancing existing CSR initiatives and effectively utilising corporate resources. Development organisations, renowned for their meticulous programmes, have emerged as invaluable collaborators. Smile Foundation, through strategic CSR partnerships, has been actively engaged in education, healthcare, skill development, nutrition, and women empowerment, thereby advancing sustainable goals.
Continuously expanding our campaigns, we leverage our network of volunteers and leaders to empower grassroots communities. Such endeavours expand the scope of social sector efforts to address a broader range of issues. Our partnerships also allow corporations to tread sustainably and partake in nation-building.