Stanford Social Innovation Review

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Whats Next
A Mandate for Responsibility
By Suzie Boss








Stanford Social Innovation Review
Summer 2014


Copyright 2014 by Leland Stanford Jr. University
All Rights Reserved




11 Stanford Social Innovation Review
/
Summer 2014
GOVE RNME NT
A Mandate for
Responsibility
I
n India, corporate so-
cial responsibility isnt
just a good idea. Its
now the law. In August 2013,
the Indian Parliament passed a
revised version of the nations
Companies Act, and the act
now requires companies of a
certain size to invest 2 percent
of net prots in social ben-
et activities. This provision,
which makes India the rst
country in the world to man-
date CSR spending, could un-
lock as much as $3 billion an-
nually, creating a monsoon of
opportunities to tackle issues
like extreme poverty and child-
hood malnutrition. Yet even
as companies gear up to meet
the new requirement, they and
is to turn isolated viewers into
an engaged community. After
youve watched and been in-
spired by a lm, you have the
immediate ability to do some-
thing, Erlbaum says.
Eixir is a recent entry in
the media-for-good eld. Partic-
ipant Media, a production com-
pany founded by philanthropist
Je Skoll, also creates online
campaigns to support cause-
oriented lms. What they do
is tremendous, Erlbaum says.
But they create campaigns for
only the 6 to 12 lms that they
produce in a year. There are
thousands of lms out there
that nobody has created any
kind of social action around.
Participant Media moved into
television last year with the
launch of Pivot, a cable network
aimed at engaging the millen-
nial generation in social action.
Media channels like Eixir
and Pivot allow viewers to vote
with their eyeballs, argues
Renee Hobbs, founder of the
Media Literacy Lab and found-
ing director of the Harrington
School of Communication
and Media at the University
of Rhode Island. People can
make viewing choices about
the kind of world they want to
live in, she says. Such services
oer counter-programming to
a mainstream entertainment
industry that favors crowd-
pleasing fare such as sex,
violence, children, animals,
or UFOs, Hobbs adds.
Erlbaum has big plans for
Eixir. By 2015, he predicts,
the company will be acquiring
independent lms out of festi-
vals and even producing lms
that will be exclusively avail-
able on our platform. Mean-
while, he says, Eixir will fo-
cus on distributing good lms
that are not getting the expo-
sure they deserve. n
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OUR MISSION
IS SIMPLE.
their social-sector partners
are bracing for challenges.
The possibilities are
enormous, says Priya Naik,
founder and joint managing
director of Samhita Social
Ventures, a CSR consulting
rm in Mumbai that is funded
by N. S. Raghavan, cofounder
of Infosys. Companies need
to think carefully about how
to make signicant contribu-
tions, Naik says. If they just
want to write a check and be
done with it, then we risk a tre-
mendous amount of chaos.
The new law applies to all
companies that meet certain
thresholds of nancial perfor-
mancebusinesses with an-
nual net prots of 5 Crore INR
12 Stanford Social Innovation Review
/
Summer 2014
(about $800,000), for example.
According to the Confederation
of Indian Industry, at least
6,000 companies now have an
obligation to take up CSR ini-
tiatives. Although many Indian
companies already have CSR
programs in place, they face new
reporting and transparency re-
quirements. Disclosure of CSR
spending on a public website is
mandatory, for instance. There
is no penalty for failing to meet
the 2 percent goal, but com-
panies must explain the rea-
sons for any shortfall. (Bhaskar
Chatterjee, CEO of the Indian
Institute on Corporate Aairs,
suggested in an interview with
The Telegraph of Kolkata that
companies will be shamed
into complying with the law.)
Under the new CSR man-
date, Indian business leaders
will need to recalibrate their
approach to social engagement.
Smaller companies have been
giving back to the commu-
nity primarily through philan-
thropy. The need of the hour
is to be more strategic, says
Jay Thakkar, a CSR consultant
at Accenture who is based in
Mumbai. They must ensure
that their CSR and sustain-
ability activities nd the sweet
spot where there is congruence
of social benets and business
benets. Eective CSR, he
adds, comes down to priori-
tizing initiatives based on this
sweet spot and then partnering
with NGOs and civil society to
achieve well-targeted aims.
Piyush Verma, an investment
manager at Lighthouse Advisors
India, says that the companies in
his portfolio are moving quickly
to establish CSR teams that re-
port to their boards. A growing
number of Indian companies,
he adds, are contributing not
just funding but also in-house
expertise to social causes, and
he oers an example: Suraksha
Diagnostic in Kolkata does free
checks for poor patients across
its centers. They also hire eco-
nomically [disadvantaged] stu-
dents and train them on the lat-
est medical equipment.
The social sector will need
to track impact closely, warns
Payal Mulchandani, cofounder
of the 4th Wheel, a CSR think
tank and consultancy based
in Ahmedabad. Theres a risk
that companies will invest in a
lot of small projects, with little
learning or cross-fertilization,
she says. Mulchandani also
notes the risk that the CSR re-
quirement will create an open
door for greenwashing and cre-
ative accounting. But Indias
new approach to CSR presents
an opportunity for innovation
in sustainable social invest-
ment, she adds.
Ratan Tata, former chair-
man of the Tata Group and
a prominent philanthropist,
has said that the national CSR
scheme is well intentioned but
vulnerable to exploitation. In
an interview with Philanthropy
Age, he predicted that nonprot
organizations will be tripping
over themselves to attract
funding from companies.
Indeed, for NGOs, the re-
vised Companies Act creates
unheard-of access to corporate
philanthropy. In a survey of
20,000 nonprot partners, ac-
cording to Naik, Samhita found
that 50 percent of NGOs had
never approached corporates for
funding before. Pratik Kumar,
CEO of the Magic Bus, a sport-
for-development organization,
is well aware of the challenges
that this boon will bring. He and
other nonprot leaders, he says,
will need to upgrade our profes-
sionalism to match the demands
that such a large leap in funding
would mean for all of us. n
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