Corporate Prefer Partnering With NGOs Over Social Enterprises: Survey

Corporate houses preferred to partner with NGOs over social enterprises when it came to executing corporate social responsibility (CSR) activities, states a survey report published by Samhita Social Ventures. Identification and selection of NGOs was also found to be challenging for companies.

“Non-government organisations (NGO) were preferred over social enterprises because of the favourable stance provided by Section 135 of Companies Act towards non-profit organisations. Engagement with social enterprises comprised mainly of using them as vendors for services  and low-cost water filters, composting toilets, clean energy cooking stoves, etc. A few companies engaged with them for their complimentary support for project management and evaluation tools for CSR projects,” reads the report published Samhita.

The report however also mentioned that many companies found social enterprises as good options to work with. “Many companies felt that working with organisations that had a profit/ revenue model helped to make the interventions more sustainable since they were not fully dependent on a funder’s support to sustain operations. It bought more rigour, research and development into the sector and also encouraged accountability from end-beneficiaries, who may have to pay a nominal charge to access products or services from social enterprises,” the report stated.

Samhita Social Ventures, a social sector consulting firm along with The Rockefeller Foundation conducted a survey of the CSR sector that included 56 companies and 144 NGOs. The report highlighted different aspects of the CSR functioning in the past two years.

It is noteworthy to observe that 90% of the surveyed companies reported that their senior management, such as the CEO, COO, CFO or the board of directors were the key drivers of their CSR policies. “Only a small proportion of companies consulted intermediaries (27%) or social organisations such as NGOs 16% when formulating their policies. The low participation of such agencies in formulating the policy makes it even more important for a company to strike a balance between what is required from its perspective and what is achievable on the ground,” mentioned the report.

With 81% of the companies supporting education related programmes, education continues to be the most popular cause supported by corporate houses for their CSR programmes followed by livelihood and skills training.

Most of the companies that participated in the survey expressed a strong intent to use CSR as an opportunity to make meaningful contribution to the development sector. About 44% companies reported having dedicated CSR and/or sustainability teams that managed CSR activities for their companies.

Many companies felt the provisions in law, which do not recognise CSR activities that align with their core business had caused them to adopt a cautious approach by de-linking the two. According to the survey, around 52% companies felt that CSR should complement business objectives.

The social organisations welcomed the law which had opened up the doors for a more structured approach and corporate involvement in the development sector. There was also a concern that most of funds would flow only to large, visible and well-established NGOs.  “Funding is only one aspect. We look to our corporate partners for feedback, growth strategies and to bring innovative ideas to improve efficiency,” mentions Vanessa D’souza, CEO, SNEHA.

Another critical finding of the study showed that corporate firms were reluctant when it came to funding administrative and operational support to NGOs. They preferred their funds to be used directly to impact beneficiaries which even though is the ultimate goal would affect the long term social goals. “Depriving NGOs of this support prevents them from investing in their capacities by bringing in the relevant resources, materials, training etc, which in turn hampers their ability to deliver maximum impact to beneficiaries,” the report commented.

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The CSR Journal Team