Corporate Social Responsibility: Towards Sustainable Welfare.

Sustainable Welfare

TODAY, about 300 multinationals control 25% of the world’s assets. Indian companies currently comprise only a fraction of this number. However, with our economy coming of age, more and more of them will lay claim to this elite list.

While this is truly a matter of great pride, we must remember that there rests an equally momentous responsibility on us to give back to the society that has nurtured our growth. Today, most companies contribute to society by means of well-defined corporate citizenship initiatives executed by their not-for-profit trusts and foundations. However, we believe it is important for corporations to look beyond charity and redefine the act of ‘giving back’. Corporations must look at cultivating and encouraging social entrepreneurship in society with the same degree of focus and energy that keeps profitable businesses running.

As companies with a conscience, the onus is on us to lead the initiative to reform. We must recognise that the power to initiate change lies with the youth, particularly as most employees across organisations are today under the age of 30.

Youth have found empowerment in the ubiquity of technology and the democratisation of online media, among other factors in today’s world. In India, we see more and more people voicing a need to do their bit for governance, policy-making and improving civic systems. Most important, they want to be agents of change by making a positive difference. Many of these people have path-breaking ideas for social change but not always the means and resources to take them to fruition. Often, their dreams go unrealised for lack of support or guidance.

With the right push, imagine the transformation their ideas could bring to the economy, society and the environment. Think of the difference they could make by channelling the energy of the youth towards improving education or healthcare.

Companies are accountable to society, not just their shareholders. They must look beyond the current performance yardstick of shareholder impact and profits. Creating a culture of leadership is a pressing need, particularly to ensure that our social values keep pace with economic growth. The onus is on companies to catalyse this process by broadening their horizons on social commitment. Corporates should augment their current charity efforts and utilise their business experience, acumen and capabilities to provide the required impetus to social entrepreneurship and make social development efforts scaleable and sustainable.

The case for social entrepreneurship has never been stronger. For both companies and individuals, there is an urgent need to evolve a systematic approach to addressing social issues by applying a combination of inspired effort and strategic thinking. This also means pushing the boundaries of corporate social responsibility by making the act of giving sustainable for both benefactors and beneficiaries.

What we have before us is the perfect opportunity for corporations to step in and empathise with social entrepreneurs. The challenges faced by social entrepreneurs are similar to those faced by any fledgling company. With our wealth of experience, the corporate sector is capable of extending support to entrepreneurs by advising them on processes, quality parameters, building scale, enshrining values and ethics, exploiting market potential and fine-tuning financial performance.

Being entrepreneurs ourselves, we can easily recognise that an organised initiative has greater potential for social impact than fragmented efforts in social entrepreneurship. The key to success lies in reaching out to motivated individuals by offering access to a network of successful entrepreneurs along with a framework for evaluating social ideas, exploring funding sources and models, and charting a roadmap for the successful execution of their plans.

The emphasis must be on selecting social ideas that are sustainable, profitable and suitable to be implemented through a clear business plan. Participating in such an initiative will give young corporate professionals a taste of entrepreneurship beyond what their job roles can offer them. They will learn how to evaluate ideas, build business cases, seek funding, learn governance mechanisms, etc. At Infosys, they have already set the ball rolling. INFYi is an Infosys initiative focused on providing young entrepreneurs with an opportunity to make a positive social impact and seeks to combine professional excellence with social conscience.

On Wings of Social Entrepreneurship

On Wings of Social Entrepreneurship

Corporate Professionalism Is Spreading To The Social Sector, As Professionals Give Up Comfortable Corporate Careers To Work With The Masses

WHEN 24-year-old Anand Shah was flying out of India back to America, another Indian sitting next to him on the flight was complaining. “The taxi drivers, they fleece you. The food, the water… oh, I was sick for four days out of ten.” Born in the USA and trained at Harvard as a biologist, Shah thought to himself that criticising came easily to us, but not the initiative to change things.

Mr Shah, on his part, decided to do something for the country of his parents’ origin. He looked around and realised there was a huge need for talent to work at grassroots organisations in India. “What India needs is people time. Very rarely would you see very talented people getting their hands dirty,” he says. Thus was born IndiCorps, which works to bring the brightest and best people, often lost to the management consultancies and investment banks, to work in social development.

Mr Shah is not alone. An increasing crop of professionals are sacrificing lucrative corporate jobs to become social entrepreneurs. They blend the entrepreneurial skills of the business world with the social purpose of non-governmental organisations to create unique solutions to India’s problems. For decades, social work in India meant charity, but the economic changes of recent years have brought hardnosed business sense and professionalism to the social sector.

Like Mr Shah, Mumbai-based Venkat Krishnan quit a nice job to start a company that brings together donors and social organisations that need their money. His company, GiveIndia, works with about 100 organisations that have projects ranging from environmental protection to child welfare.

Social entrepreneurship is no different from starting a profit-motivated company-the challenges are perhaps only tougher. They grapple with problems of retaining people with motivation, scaling up viable business models and of course, raising resources. But the modern day social enterprise has one advantage compared with a conventional NGO-it is run by a professional who understands target setting, performance and accountability.

For instance, Mr Krishnan opted to set up his venture as a company rather than as a charitable trust. The company has on its board, strategy consultant Rama Bijapurkar, ICICI chairman N Vaghul, Tarun Das of CII and Kishore Chaukar of the Tata group-well-known people who brought credibility to a start-up and also a specific set of skills to the table. “To some extent, being from IIM-A helped to establish my seriousness and get them on board,” says Mr Krishnan. Like any corporate, GiveIndia also periodically works out the cost of raising funds and compares with other ways of raising funds. The goal being to raise funds in the most the cost efficient and effective manner.

Employee retention is the next challenge. Vineet Rai, whose organisation Intellecap acts as an advisor to firms with a social-focus feels human resources is the number one challenge most of them face. This is where organisations like Indicorps come in. The Indicorps fellowship programme is an intensive two-year programme that involves a selection process to identify the best talent-those selected work for 1-2 years on the project of their choice with grassroots organisations.

While volunteering for social work is not new, getting the brightest and best minds to do it and tapping their potential at a costs lower than consultant fees is the crucial differentiator for IndiCorps. “This is not volunteering. These are fellows,” says Mr Shah, who calls what his organisation does “service for the soul”. The basic requirement for the Indicorps fellowship, apart from being a person of Indian origin, is a university degree or five years of work experience. Interested candidates need to fill out a 20-page application form, pay their own way to India for the interview. So only serious candidates apply.

Initially, Mr Shah found NGOs were not very excited about the idea. “But once you give them (the NGOs) the basic management skills, you suddenly find they are very hungry for talent,” he says. Unlike traditional businesses, that can use compensation and stock options to employ good talent, social entrepreneurs have to rely on other incentives to retain people. “Usually, we find we lose people to other organisations in similar fields,” says CRY (Child Relief and You) CEO, Ingrid Srinath.

CRY, one of India’s better known organisations working for child welfare, commissioned Ernst & Young to do a study to reduce its employee turnover which had gone up to 25%. In response to the findings, it increased salaries by 40% across the board in 2006. “We were able to bring attrition down to 6%, and compared to before, when we had 46 vacancies, we have under 20 now,” says Ms Srinath.

CRY was a first mover in many ways. It was among the first entrepreneurial efforts in the social sector that was professionally managed and run. It was also among the few organisations that built a strong brand presence that was bigger and better known that its shy and retiring founder Rippan Kapur.

“Most organisations are board driven or CEO-driven. It is rare to find the ideal combination where the board is involved in the governance and the CEO in the management,” says Noshir Dadrawala, who advises charitable organisations, and who has authored a number of books to help them. Even today, CRY is among the most professionally run and managed organisations.

In 2000, it commissioned IMRB to study donor habits and found that the biggest block to making donations was inertia. The intent existed but few people translated it to action. Acting on this, CRY put in place mechanisms to make the payment process more convenient, and also put in place an online payment system. Confesses Ingrid, “When we outsourced our cards business to Archies, we also introduced a voluntary retirement scheme.”

Compared to 1979 when CRY was started, there are now many more resources for social entrepreneurs. There are courses run by management institutes such as NMIMS on social entrepreneurship, as well as hand-holding and consultancy that organisations such as Noshir’s Centre for Advancement of Philanthropy provide for free. Even venture funding is available if it is a for-profit socially focused venture, apart from organisations such as Ashoka that fund deserving individuals in social work. The time for social entrepreneurship has come.

Advice and help on how to go about it
Centre for Advancement of Philanthropy. Cap India
Intellecap. Intellecap
Networking, Funding Ashoka. Ashoka
Funding Accumen Acumen Fund
Aavishkar. Aavishkaar

Article Resource:
Author: N Shivapriya is the cheif editor in the Economic Times, Mumbai and the article appeared in one of their successful columns called "Starship Enterprise.