Corporates for a cause

Corporate philanthropy is giving way to corporate social responsibility

The $200,000 that management and technology firm Accenture has committed to its "Room to Read" education programme in developing countries is a small part of the 1 per cent of its earnings it puts aside annually for its good corporate citizenship curriculum.

Elizabeth Padmore, global director of policy and corporate affairs for the $13.67 billion firm, en route to the World Economic Forum, says at the firm's New Delhi office, "Figures and numbers are just the tip of the iceberg at Accenture where employees are encouraged to volunteer to help local communities even at the cost of company time. It's important for us to connect business with local communities."

Accenture has launched its "Room to Read" programme in Uttaranchal, directed towards setting up 50 libraries, a scholarship programme for girls and a publishing programme for books in Hindi.

In Maharashtra, its World Link project is based on technological empowerment in rural districts where school telecentres educate children during school hours and provide access post-hours for villagers to use internet and e-mail services.

"The idea," says Padmore, "is to make people and programmes self-sustainable: we don't want to create dependencies."

International IT firm Xansa agrees: "A blank cheque has limited use," says Saurabh Srivastava,executive chairman, Xansa India. "You have to get engaged. At Xansa, we use our knowledge of IT and management skills to make a difference."

Xansa supports a village, an orphanage for boys and a school for the blind, among others. But it is not the money, the computers or textbooks they donate that makes the most difference.

"You have to make sure that development is not just one-time," says Srivastava, "that it sustains itself and carries on long after you've left. You need to instil a way of thinking in boardrooms and NGOs to drive home the fact that CSR is not just a catchphrase; that the community is actually a stakeholder in the business."

Corporate social responsibility, once seen as a luxury at best and an afterthought at worst, is changing rapidly. "At a time when businesses are facing challenges in recruitment, and young graduates openly question company values, good corporate citizenship adds value to one's intangibles," explains Padmore.

Corporations nowadays wage war on two fronts. Not only do they need to keep their investors and shareholders happy and their profits healthy, they also need to fulfil their often ignored role as an active player in civil society.

In the past, corporate social responsibility was seen by companies, as Malini Mehra, director of the international think tank Centre for Social Markets, puts it, "fluffy welfarism". Corporations fulfilled their social obligations by the odd donation or flamboyant public relations exercise.

Of course, every little bit counts "" but anyone can write a cheque. What corporations are discovering now is that the edge they possess as businesses can be used to the advantage of social causes as well.

"Most companies are still at first base in their understanding of CSR," says Mehra. "It is still equated with 'social welfare' instead of being seen as related to core business issues of competitiveness and risk management."

Some corporations have caught on; major groups such as the Birla Group, the Tata Group, the Jindal Group and ITC, and individual companies and banks such as Samsung and ICICI, have earned recognition by their support of sustainable development, in their own ethical business practices as well as in a trickle-down effect on the community around them.

But "CSR in India is still evolving," says Amanda Greene of GIVE Foundation, a Mumbai-based NGO. "India has a great tradition of family philanthropy, but corporate philanthropy is completely different. Corporates can use their their unique position to tie philanthropy to strategic business opportunities."

One stumbling block can be the suspicion with which corporations regard NGOs. "NGOs can help corporates streamline and direct their philanthropic activities," says Greene. "It's a smart move for the corporations because it makes sure the best use is being made of their money.

And, of course, the NGOs are better off, because while they have other ways to get funds (for example, from institutional or individual donors), they don't necessarily have other sources of the skills that corporations can provide. It's the missing link in CSR in India."

Shailaja Sharma, manager-external affairs, Shell agrees: "What is needed is a fine balance between an international perspective and local knowledge. It is absolutely essential to have a clear knowledge of local customs before one can hope to make a difference. This is why NGOs should be taken advantage of at every step."

Of course, ethical business practices are not just the result of a single corporation's good intentions. Any doctrine of ethics is always the product of a long public tradition, of years of civil and political thought.

According to Mehra, "We need a more penetrating public debate about the role of business in society. For example, I would like to see major groups and industry associations talk about how to help India meet the Millennium Development Goals."

The government is, as always, an ambiguous aid. Corporations and the state rarely see eye to eye, as is illustrated by the recent debate over US-style affirmative action, and politicians usually have a Byzantine agenda of their own, as was shown by the furore over calling in foreign advisors to the Planning Commission.

Mehra is clear in her evaluation of this sleeping partner: "As for the government, it needs to shape up and realise that it's not just a cheerleader waving from the sidelines.

CSR will not succeed without tackling corruption and the broader environment. It is not enough to ask corporates to behave, we have to demand the same things of politicians, bureaucracies, and ourselves."

It is lucky, as Greene points out, that corporations are so much easier to work with. "Businesses are never averse to looking abroad or to other sectors for inspiration. If, at the end of the day, it helps their bottom line, they're happy."

And this is exactly what CSR should do. Philanthropy keeps stakeholders happy; it improves the image of the company at home and abroad; it keeps up employees' belief in and loyalty to the company; and it means the corporation is looked on with a much kindlier eye by a discerning public.

Indian corporations have become a force to reckon with in international business. Now let's see what they can do at home.