The 10 C Model for CSR Delivery

Did you know that Enactment of Companies Act, 2013 by the Ministry of Corporate Affairs, Government of India is the world’s largest experiments of introducing CSR? This mandatory provision of imposing statutory obligation on Companies to take up CSR projects towards social welfare activities was first of its kind and India is the only country which has regulated and mandated CSR for some select categories of companies registered under the Act.  

This public-private partnership was aimed at transforming India and help in achievement of sustainable development goals. 

Ten years after introduction of CSR law, how have we progressed as a country on the same? Have companies been able to achieve intended outcomes in a satisfactory manner? Have the NGOs been able to deliver the impact expected from them and align themselves to company’s CSR priorities? How many companies and NGOs have able to sustain prolonged and fruitful partnerships during this time? If there a churn of NGOs every year by the corporates and what are the reasons for the same?  What needs to be done to ensure prolonged impactful and sustainable partnerships between NGOs and corporates? 

These are the questions we need to ponder over today. 

The 10 C Model for CSR Delivery: 

The 10 C model for CSR delivery has been proposed by Tracy Dathe, Rene Dathe, Isabel Dathe and Marc Helmond

What are these 10 Cs? 

1. Capacity: Does the organization (NGO, Not-for-profit, or Social Enterprise) have the capacity and capability to deliver the project undertaken? Very often we see social organizations overpromise and underdeliver. Why does this happen? In a hurry to close grants, these organizations very often make promises which are not possible on the ground like 70% to 80% employment of trained candidates, increase in income by unreasonable levels to cite a few examples. 

It is always a good idea to spend some time during the proposal making stage to gauge situation on the ground at the suggested locations. Funding the NGO for feasibility study would be a promising idea to understand whether the suggestions are doable. Just relying on secondary research released on the state or location and deciding on the interventions might not bring about the desired results. 

There needs to be provision for presurvey by experts to be able to come with practical interventions for the area. We can also think about hyperlocal NGOs being involved in the project as they are well versed with the issues in the area. These NGOs might lack the capability to deliver up to corporate expectations in terms of impact reporting and they can be supported by well-established NGO leading a consortium of such NGOs. 

2. Competency: Is the NGO, not-for-profit or social enterprise competent to deliver the signed mandate with the donor? Are its people competent to deliver?  are they are trained on social work, or they trained on the nuances of the project being undertaken by the organization? Are these organizations process competent? Are they certified by government or compliance agencies for their HR, finance, or delivery process so that they are delivering the mandate in line with legal and regulatory requirements?  has the corporate trained the NGO partners on corporate governance standards so that they are more likely to foster positive relationship with each other. 

Very often we see NGOs who are not transparent on their policies with both corporates and their employees resulting in delivery and compliance issues. Similarly corporate CSR representatives are not trained CSR professionals and do not share priorities and governance requirements with the NGO partners which results in audit issues. 

How do we tackle competency issues at both the ends? Training of NGO personnel on effective project management, reporting of project outcomes, financial management and transparency in operations will go a long way in making NGOs effective in outcomes. 

Similarly, as CSR gains prominence in board meetings and becomes priority at the highest levels, not compromising on the CSR leadership is extremely critical. Transferring non competent and untrained internal personnel to manage CSR should be a strict NO- NO.  Only trained professionals with relevant experience should lead CSR. It has been 10 years now that CSR law has been mandated and there are umpteen number of professionals who are available who can handle this better for corporates. 

These professionals need to ensure they match the goals and objectives of corporate CSR with the NGO. A strong alignment on the same will ensure partnership is meaningful and impact can be delivered. 

3. Consistency: Has the NGO demonstrated consistent output in the year few years? Timely and effective completion of the project is extremely critical as per CSR guidelines, has the NGO demonstrated organizational capabilities, effective project management and ability to meet timelines?

Has the corporate anchor done due diligence on the NGO partner before assigning the grant to the NGO? NGOs which have a record of accomplishment needs to undergo due diligence on operational and financial capabilities and ability to meet regulatory compliances. Newer NGOs which lesser track record can be encouraged basis credibility and previous track record of the leadership of the NGO. Hyperlocal NGOs can be guided on the above by supportive implementing larger NGO.  

Forums can be formed by corporates to collect feedback on delivery capabilities and consistent performance of NGOs. There can be review and rating system like all other services on a platform by corporates so that it serves as guidebook for other corporates and will bring in transparency in the system. 

Due diligence does not apply only to NGOs and there have been several instances where corporates have not paid NGO partners based on profitability for the year, change in management, change in priorities etc.  NGO partners also need to be able to rate corporates based on governance, openness, involvement, ability to disperse funds in timely manner as these factors have immense impact on deliverables by the NGO.  

Just as corporates can raise an issue with NGO on Ministry of Corporate Affairs when there is lack of delivery or impact, there needs to be redressal mechanism for the NGOs too to be able to escalate in case there is deliberate attempt by the corporate to avoid disbursement of grants delivery had been completed. 

4. Control of process: Does the NGO have processes in place? Is it ISO certified or follows any other process-oriented system for various processes? Having a process in place ensures consistent quality of delivery and results and avoids misses from the team. It also ensures regulatory compliance is in place consistently avoiding audit issues at later stage. 

Having process in place is not a onetime activity but needs to be improvised year on year by a dedicated team. Repetitive processes can have a standard delivery mechanism chalked out, but any new project or process needs to be mapped so that the NGO does miss out on critical aspects of the delivery. 

The same applies to the corporates in the way they assign grants, monitor delivery, collect reports, measure impact etc. Many corporates are very unclear on how they are going to collect impact and depend heavily on NGO partners to share the same with them. This is a potential time bomb as critical parameters for reporting can be missed out in case the impact report if not envisaged at the beginning of the project by the donor. 

5. Commitment to Quality: How does the NGO monitor quality? There are any systems in place for the same? These need to be checked during the time of due diligence. Effective quality monitoring requires robust processes and audit systems in place with proper templates like quality matrix, quality review and quality log forms. 

How frequent is the monitoring of the ground team by the leadership team and also by the corporate donor? What will be monitored? What will be frequency of monitoring? what will be the red flags? Who will raise the same? If there is any change that can be accommodated in the program? When can these changes be proposed? Who will be agreeing for these changes? Was there a risk management protocol with mitigation steps put in place before the start of the project? 

In case we aspire CSR impact to be qualitative as well as quantitative we need to invest time and effort in proper planning phase with all the above so that the KPIs envisaged are met diligently with tangible and measurable outcomes. 

Involvement of all stakeholders including local communities is very important. The sustainability as well as relevance of the project can be gauged by the local community. When we are finalizing on the KPIs of the project, it is very important to include concurrence of the community to collate feedback from local leaders. 

6. Cash: Does NGO have strong financial base to be able to cover in case there are delay by the corporate donor in releasing funds. Currently most of the corporates are requesting for dedicated bank accounts for their grants so that there is transparency in transactions related to their accounts. This results in a lot of hardships for the NGOs as it results in difficulty in disbursement of salaries for shared resources like admin, HR and finance. In case there is any delay in disbursement from the corporate covering admin cost and personnel cost will become very difficult. Also there needs to be some amount in the grant dedicated for gap funding in case there are any unforeseen situations which can result in delay in funds. 

There needs to be a concept and strong advocacy for gap funding for NGOs and not-for-profits as there are a few months every year where there is little or no funding by corporates and this results in additional burden on NGOs which cannot be covered when the donor funds eventually come in. 

7. Cost: Is the service being offered by NGO at competitive price? This can work both the ways wherein NGOs can quote very low price, take the donation and can do a shoddy job for the same. Similarly, there are NGOs which give premium costing and can deliver average results. How do we avoid these situations? A common repository for NGO salaries might be helpful like we used to have Gallup survey for different sectors and salaries used to base on weighted average salary for those positions. 

One more flipside which has come in recently is limiting the admin cost to 15% of the project which includes salary cost. This will result lack of qualitative personnel to deliver the project. When are discussing niche qualifications, training and project management skills to manage CSR projects we also need to ready offer the salaries which match the expectation. 

8. Culture: This is very overlooked aspect when fostering partnerships for CSR. Are the NGO and corporate cultures compatible with each other? Do the thematic areas and priorities match?  Is there a vision board which is matching at least 50% with each other? NGO representatives on the ground are representatives of corporate on the ground. They carry the brand image; hence it is very important that the CSR leadership at the corporate spare time and effort in instilling cultural values in the NGO representatives on the ground.  
9. CCSR:  Is the organization that is NGO, not-for-profit or social enterprise ethically and legitimately funded?  the due diligence to be done should be as vigorous as investment due diligence particularly if the value of funds is substantial. The corporate should not shortchange this process. 
10. Communication: Does the NGO, not-for-profit or social enterprise have the support of technology for integration of information. In this age of AI and ML, NGOs should no longer rely on excels for data collection, collation, and analysis. There needs to be provision made by the corporate to integrate technology in the project. This will not only make reports real time so that timely decisions can be taken but also make outcome very data driven and transparent.