September 2, 2023
- Quick Contact: +91 22 2167 8100
Introduction:
Corporate Social Responsibility popularly known as “CSR” can be a game changer by becoming a powerful mechanism to contribute positively to the upliftment of the society or the nation as a whole in various parameters. Although the Companies Act, 2013 creates a regulatory mandate on certain eligible Companies to mandatorily spend 2% of their profits on CSR, the question which looms is whether the spending is meticulously planned or even if they are planned are they even channelled in areas or sectors where the need really pertains to.
Considering the CSR amount involved, its necessary to plan and identify appropriate project that are relevant to the need of the beneficiaries. Need assessment in CSR programme planning is the process of identification of discrepancies between the present state of community and where it aspires to be. It is a systematic set of procedures which identifies the needs, examines their nature, and helps the CSR programme planners to identify and select the best area or activity in which companies’ resources can be deployed with an intent to achieve the maximum possible impact on the society.
Need Assessment and its role as a Support system:
It needs to be understood that the decisions on CSR spending cannot be taken just to satisfy regulatory requirements. Many times, interventions are designed and implemented without seeking adequate input from the community. At the end of the intervention, people/community does not recognise or acknowledge the impact created through the intervention. Research driven CSR Need Assessment can help organisations to identify the areas that require critical attention and support. By carefully understanding the structure of the target area and having fruitful conversations with the stakeholders and locals of the target area, corporates can ascertain or determine the most relevant social, medical, or economic challenges faced which needs resources in the form of CSR.
Understanding the realities of national issues is as important as having Business Sense:
Organisations grow tremendously when their leaders have strong business acumen, similarly, the growth of any nation is largely influenced by Corporates who are able to identify specific social and environmental challenges faced by the nation. This allows corporates to automatically deploy their spending in areas where there is a strong dearth of resources. When CSR initiatives align with the nation’s needs, they create shared value for both the Company and society.
For making a sustainable change, Targeted Approach is a must:
Certain initiatives may yield visible results immediately or in a short span of time. Addressing deeply rooted issues requires strategic planning and a commitment to sustainability. In order to sustainably address social issues through CSR initiatives, it is important for corporates to conduct a need assessment to identify the root causes of these issues. By understanding the underlying factors that contribute to social problems, companies can develop more effective and impactful CSR strategies that address these issues at their core. Each area can be divided into smaller micro areas and corporates must ensure the deployment of CSR funds in such specific micro areas only to strengthen the impact. There is thus a need that the entire issue to be resolved over a planned period of time which shall require attention to that specific area over a continuous period of time.
From good intentions to real impact: The role of need assessment in CSR:
A need assessment can help companies understand the social and environmental issues they are trying to address as well as the needs and perspectives of the communities they are working with. By identifying the root causes of social and environmental issues, companies can create initiatives that address these issues at their core. This can lead to more sustainable and long-lasting impact, as well as greater engagement and support from stakeholders. Another benefit of conducting a need assessment is that it can help companies avoid unintended negative consequences. A Company might launch a CSR initiative that is well-intentioned but ultimately ineffective because it does not address the root causes of the issue. There are lot of examples where the CSR spendings are transferred to Schedule VII funds instead of deploying it in a planned manner in Schedule VII activities. Companies with genuine intent to create impact via their CSR activities shall always endeavour to undertake the need assessment of their proposed CSR initiatives. It can be said that the future investors shall not only value stable financial position of the company but also to what extent such company is creating an impact to uplift the nation as a whole.
Conclusion:
CSR can be said to have tremendous potential by playing the role of a transformative force in uplifting the society and the nation as a whole. Further, though CSR is a mandatory requirement as per the Companies Act, 2013 the real game changing impact which can be achieved lies in proper need assessments to strategically channel these resources. In the world of CSR, a need assessment is like a compass that helps guide us towards effective and impactful initiatives.
CSR initiatives can be a real game-changer when it comes to making a positive impact on the world around us. In order to create the desired impact, we need to understand the needs of the communities and environment that we are trying to help. That is where a need assessment comes in. By using data-driven insights to inform our strategies, we can create initiatives that are both effective and sustainable.
Moreover, the genuine intent towards CSR significantly enhances the corporate reputation, attracting socially conscious investors and stakeholders. The function of need assessment though a voluntary requirement to fulfil the regulatory requirement of CSR spending can help corporates to align their CSR activities with the actual and real needs of the society, they thus can become catalysts for positive impact which creates an inclusive, prosperous and sustainable future for the entire nation.
This article is published in Taxmann. The link to the same can be accessed at: