Cumulative spending on corporate social responsibility (CSR) shot the magical Rs 50,000crore mark in just four years . With this, cumulative spending over the four-year timeframe stands at nearly Rs 34,100 crore for listed company listed companies and about Rs 18,900 crore for unlisted one totalling around Rs 53,000 crore.
Though the spending has reached its meaning full proportions , there is a need to improve the quality and the impact of all that spends on the that ground . Capping the total CSR spend at 5 percent of the total money set aside for CSR needs to be relooked as firms have singled this out as a factor holding them back from enhancing their own in-house CSR capacities.
Implementation entails multiple costs such as salaries of dedicated CSR staff, administrative overheads, establishment expenses, communication expenses, professional fees, statutory filing and related consultancy etc, which are difficult to keep within the 5 percent limit. There is also a case for ensuring robust due diligence before appointing an NGO/voluntary organisation partner by adding governance and impact achieved are two areas which need assessment.
An independent third-party evaluation like grading of the NGOs/implementing agencies should be considered to gauge a potential partners ability to drive the desired social impact.
According to a Survey a third of the 1,913 listed companies which qualify for CSR spends did not spend the money due to multiple reasons.As much as 341 said they were unable to spend because of reasons like