More structured CSR budgets have been put in place now, and many organisations are seeking the support of “external implementing agencies”.
Companies in India appear spoilt for choice when it comes to choosing implementation partners for their mandated CSR activities. The ratio of NGOs to people currently outnumbers the ratio of policemen to citizens! However ascertaining the credibility and efficacy of an NGO for a company’s CSR implementation is as daunting in sheer volume as it is in the depth of work involved.
Legal compliance, responsible governance and financial sustainability are necessary but not sufficient conditions to identify appropriate implementation partners. Companies need to move beyond these factors and look at the “fit” of an NGO, taking into account the dynamic nature of their work, the lack of standardized reporting procedures and easily comparable benchmarks.
“Criteria used to assess organizations in the business world, may not represent an NGO’s suitability for CSR accurately,” according to Anushree Parekh from Samhita Social Ventures. For instance, a well-established NGO may rank well on governance and processes but may not have a suitable project that lends itself to corporate engagement or may not have the “community connect” with remote villages that a local NGO would.
NGOs work according to the evolving needs of communities and donors and should therefore capture both long-term trends as well as recent activities to present a clearer picture of their work and impact to companies looking to implement programs with them.
The problem of reporting is compounded by the lack of adequate regulation for NGOs to disclose information to the public, resulting in irregular reporting and ad hoc reporting procedures. This presents a serious problem to companies that require information about the NGO and their work for their own compliance.
One of the most important factors that companies look at is the impact of an NGO’s programs. Comparing these numbers while choosing implementation partners is not feasible because of varied definitions of impact across the sector, as well as the metrics used to determine impact.
Grading NGOs may be a formidable task for companies that are not very familiar with the workings of the NGO sector. In order to implement effective programs with NGOs that are aligned to a company’s CSR strategy and philosophy, it may be necessary to conduct a comprehensive due diligence process.
While it is equally necessary to evaluate NGOs for their programs, it is important to keep in mind the context within which NGOs are examined and understand the reasons behind the disparity, because numbers only tell half the story!
