How Technology can Restructure CSR?

By Joy Sharma and Sudeep Gupta, Founding Partners, Impactify

In 2014, the implementation of the Companies (Corporate Social Responsibility Policy) Rules, 2014 (CRS Rules) was a landmark move by India to make corporate social responsibility mandatory for companies falling under a specific category. Emerging as a force of change in the country, the CSR policy has brought a much-needed shift in the status quo as far as companies and their outlook towards social responsibility is concerned.

Barring a few business houses that have taken this responsibility extremely seriously for several decades, most companies in India have considered their responsibility towards the community as being limited simply to philanthropy. As a result, their philanthropic efforts, although well-meaning, were carried out without any focus on driving specific actionable outcomes or social change. The CSR policy has changed that by serving as a clarion call for businesses to actively contribute towards strengthening India’s socio-economic fabric and helping to solve complex development issues.

Thus, the CSR journey of Indian businesses has taken a new, albeit welcome, turn. Along with the existing financial or tax-related incentives with CSR, companies and their stakeholders are realizing that there are more composite and far-reaching implications of CSR for an organization in the long-term.

Niall Fitzerald, the former CEO of Unilever explained this quite succinctly when he said, “Corporate Social Responsibility is a hard-edged business decision. Not because it is a nice thing to do or because people are forcing us to do it, but because it is good for our business.” These words hold considerable weight, given how Unilever has achieved a distinguished position across the globe because of its highly focused and goal-oriented approach to CSR.

However, achieving credibility as a socially responsible organization requires companies to plan their CSR activities strategically, be it for a single initiative or multiple projects. To create an effective CSR framework, companies must focus on the following key aspects:

• Identifying a social agenda that aligns with the ethos of the organization

• Defining desired outcomes across the identified social agenda

• Designing a portfolio of projects and defining parameters such as geographies, scale, duration, etc.

• Identifying best-fit execution partners; corporates need to make long-term commitments to achieve measurable impact and work to build the capabilities of execution partners.

• Engaging their own workforce to further amplify the impact, as well as emphasizing and enhancing the sense of giving back among the overall workforce

Given the changing role and relevance of CSR in the nation over the last couple of years, the government is also quantifying goals in specific priority areas such as education, healthcare, sanitation, etc. to channelize the CSR funds towards realistic and tangible outcomes. At the same time, various stakeholders are engaging in dialogues to determine how they can solve some of the most complex socio-economic issues prevalent at the grassroots level. One thing that features prominently in these dialogues, and merits greater attention from all key CSR stakeholders, is technology.

Over the last several years, a lot has already been written and said about the role of information technology and its impact on the business landscape. The transformational capabilities of IT can simplify the most complex of business processes and structures by connecting them seamlessly with the help of tools that manage the inflow and outflow of information being created across the organization.

Technology, therefore, is a tool that can both address the structural issues in the social sector and CSR domain, as well as help social organizations develop and enhance their capabilities. Newer ventures are emerging in the market that are doing this by enabling NGOs and corporates to overcome challenges and establish better organizational and managerial capabilities with the help of technology that focuses on solving specific problems. Some of the solutions that these technology-driven tools offer are:

Institutionalizing management systems and processes:

IT and digitization can prove to be highly capable tools when it comes to managing social development programs. Digitizing and automating workflows can help streamline resource utilization using simple dashboards and systematic knowledge management tools.

Such digitized systems and solutions allow NGOs to then link internal team members to their specific roles and responsibilities, and make sure that they are accomplished according to the plan. Additionally, building technology-driven solutions for the social sector with a human-centric design approach makes them usable by a workforce having limited formal education or technical training too.

Matching:

One major problem faced by both NGOs and corporates is identifying the right partners to collaborate with on projects. While on one hand, NGOs seek sponsors with the ability to provide the necessary resources, corporates want good, credible social organizations to work with that have a strong and visible track record. Technology-driven platforms allow both stakeholders to find the right partners through an efficient system that matches them on the basis of project types, marketplace data, past performance, etc.

Monitoring:

In the absence of effective monitoring tools, NGOs and corporates are unable to view how a project is progressing and whether it is delivering the expected outcomes or not. In addition to this, replicating the impact from a program executed in the past at scale for a new project is another challenge both CSR teams and NGOs often face. Tech-driven monitoring tools that can organize data from reliable sources and provide useful insights in real time solves a huge problem in the social sector.

Reporting:

The lack of tools to accurately measure and report the impact of projects in detail is a major challenge most NGOs face today. Thus, from the planning and budgeting stages to the execution of projects, and finally, monitoring and measuring their impact, automation can significantly reduce the administrative burden on sponsors as well as NGOs by making reporting of project data and performance completely technology-driven.

Moreover, since it is mandatory for larger companies to disclose their CSR policies, the projects/programs they undertake, how much they are spending, and report it accurately for both legal and tax compliance requirements. In addition to collecting and curating data from various sources, digitized management solutions can also help gather useful insights from projects, and present it in the form of detailed reports – all with the help of automation and analytics.

While advancements in technology have led to modern IT tools becoming much simpler and robust as compared to those, say from a decade ago. But it isn’t possible for just any other IT company to develop a platform or product for the social sector since it requires a completely different sector-specific and subject matter expertise to build a solution that truly works for everyone. This is where organizations like Impactify, bring not only technology but also the right expertise and knowledge to the table which addresses the aforementioned challenges for corporates and NGOs.