United we stand and divided we fall is a phrase commonly used to drive home the benefits of collaboration.
As companies entered the third year since the Corporate Social Responsibility (CSR) rules were implemented in the country, experts suggest they collaborate with each other on social issues for a better outcome.
Under the CSR rules, which came into force on 1 April 2014, companies with a net worth of Rs.500 crore or a revenue ofRs.1,000 crore or a net profit of Rs.5 crore need to spend 2% of their average profit in the past three years on social development activities such as sanitation and education.
Collaboration between companies to spend their CSR funds increases impact, said Bhaskar Chatterjee, director general and chief executive, Indian Institute of Corporate Affairs, which has been set up under the aegis of the ministry of corporate affairs.
Small localized efforts by firms to address complex and vast issues such as illiteracy, poverty, unemployment and environmental sustainability make no real difference, he said.
Chatterjee, credited with helping draft the CSR rules, should know. “Different companies bring different expertise to the table and when resources are clubbed together, the scale and impact of the CSR projects increases,” said Chatterjee.
Implementation agencies for CSR funds—foundations and not-for-profits—also advocate the need to use the model where multiple companies come together to partner for a project.
For instance, The Nudge Foundation works with more than 50 partners (NGOs, government, foundations and companies) on skill development with the goal to pull 1 million people out of poverty by 2020.
They have different partnerships such as getting funding in the form of grants or loans, knowledge partnership dealing with content, assessment and co-certifications and make use of philanthropic funds as well as CSR funds for the same.
“From admissions to placements to post-placement alumni relations, almost everything we do in our ‘Programme in Life Management’ is achieved through bringing in multiple partners for their expertise and support,” said Atul Satija, founder and CEO of the foundation, which was set up in 2015.
For example, Tata Trust and Infosys co-founder Nandan Nikelani are attached to The Nudge Foundation as philanthropic partners, whereas companies such as Mphasis and Maruti are working with them as part of their CSR initiatives.
“At The Nudge, we’ve filled many of our gaps by partnering with experts in respective fields, like Maruti’s Unnati programme under CSR is helping us deliver the best driver training, and partnering with organizations like Babajobs is helping us find placement our students,” said Satija, adding that since the aim of CSR is to address social ills, collaboration is a must.
“Social sector lacks the requisite capital needed for large-scale change. Non-collaborative work environment is fracturing the sector and splitting the resources further, making it even tougher to scale,” he said.
Pune City Connect, a not-for-profit company, was set up in 2015 when 12 corporate partners, not-for-profit organizations and government agencies decided to work on four main issues—sustainable livelihoods, quality education by different firms helping with training teachers and building capacity, sanitation through building toilets and awareness and digital literacy by setting up centres around the city.
Ganesh Natarajan, former vice-chairman and CEO of Zensar and current executive chairman and founder of 5F World, a platform for skills, start-ups and social ventures, believes that collaboration with other firms has made it possible to set the target of making Pune fully digitally literate by 2020.
For the digital literacy project, information technology firms such as Zensar, Amdocs and Cybage are working together to increase digital literacy.
Until last month, the firms had funded three customized buses fitted with computers and 21 stationary labs. Each lab costs around Rs.12 lakh in the first year due to heavy capital expenditure on the machines. By 2016-17, Pune City Connect is looking to expand to another 40 to 50 centres, and in all the platform has raised approximately Rs.3 crore since its inception to carry out the different programmes.
Through this platform “CSR funds are being dove-tailed into the Pune city master plan. When you want change at scale, it is imperative that you involve government agencies with other players”, said Ruchi Mathur, chief executive of Pune City Connect and CSR head at Zensar.
Mathur is of the view that social interventions by NGOs and government agencies have not shown the required impact or results because the efforts are scattered and relatively small to make a real difference.
“For large-scale social transformation, along with resources one also needs mindset change, which is more likely when you have collective action,” she said.
Natarajan, also a member of the NASSCOM chairman’s council, believes that collaboration between companies helps share best practices, and allows people to learn from each other’s mistakes.
“There is little chance of waste of resources or models for social intervention when multiple companies collaborate,” he said.
Partnerships with other companies for social interventions have preceded the CSR legislation, said Deepa Menon, senior vice-president, CSR and corporate communication, at PVR Ltd, who looks after the functioning of PVR Nest (PVR Network for Enablement and Social Transformation).
“From the initial stages, our core strategy for PVR Nest has been to create powerful synergies with select on-ground partners and other influencers to support a favourable ecosystem for change. In this respect, collaboration and co-creation have consciously been a part of all our programmes,” said Menon.
PVR works with tyre maker Michelin India on their CineArts programme. In this CSR programme, school children create content on road safety, which is showcased at movie halls.
“Co-created programmes lead to higher ownership and support longevity of goals, standardization of operations and more sustainable solutions,” said Menon.
However, these partnerships are few and far between.
“Collaboration among firms is a very important aspect of CSR, but so far rarely is being done,” pointed out Chatterjee.
Despite the known benefits of collaboration, there are few examples of feasible partnerships among corporates and their foundations in the field of CSR because the key drivers of firms who undertake such activities do not always match, said Siddharth Dutta, senior manager at EY Advisory Services.
“CSR activities are associated with different kinds of expected social returns for firms from goodwill in the community, visibility to mileage, geographic focus, among others. Due to this, reaching a consensus may not always be possible if two or more firms work together,” he said.
Dutta added that there are a number of other challenges, including a missing scalable model of partnership or a mechanism to enable such tie-ups.
“Everyone wants to innovate, everyone wants to develop a flagship project and be the first to come up with the solution,” he said.
Zensar, which has employed the partnership model to executing CSR activities, says the biggest challenge has been getting all the partners on the same page.
“Convincing others is a challenge because each company has its own CSR strategy, vision and policy,” said Natarajan.