Update to Indian NGO Bright Spots Report reveals important lessons learned for fundraising during the pandemic

Much has changed since we published this report on best practices in fundraising from individuals in 2020. The pandemic has upended traditional methods of engaging donors, making it difficult if not impossible to meet in person (which is one of the most effective ways of asking  for money). The past two years have been very tough on India’s nonprofit sector to say the least. 

What has it been like to fundraise during a global pandemic?
What’s been different, what has stayed the same, and what will endure once this is all over? 

We checked back with our Fundraising ‘Bright Spot’ organizations to see how they have fared. Interestingly enough, this challenging period of lockdowns and shifts in philanthropy towards pandemic response has made these exemplary NGOs more creative and resilient in their fundraising efforts. There is still much to learn from their example!

We have updated our 2020 report with new information about how to go about diversifying your funding and building your base of donors in a post-pandemic (or COVID-19 endemic) world. We’ve even added a new Guiding Principle that you can use to leverage the latest technology to acquire new givers. Please take a look at the update, and feel free to share any information that you think would be helpful as well. There is much to learn from each other!

Wishing you great success in your fundraising journey!

Morry Rao Hermón, MPA
Director of Philanthropy, UC Berkeley 
Fulbright-Nehru US Senior Scholar to India 2020-2023 
Academic and Professional Excellence Award
email: morryhermon@berkeley.edu

P.S. If you’re in the Mumbai area, please join me on Monday, April 4th, 2022 at the Mumbai Cricket Association Recreation Club for a free half-day  workshop on Fundraising from Individuals in a post-Pandemic World: Lessons from the Field. Come meet the “Bright Spot” organization frontline fundraisers in-person at this masterclass featuring a panel discussion on diaspora fundraising, as well as guest presenters Suman Srivastava on Conveying Impact through Powerful Storytelling, and Noshir Dadrawala on Adhering to Compliance Norms.You won’t want to miss it! 

FAQ on CSR Rules, Amendment 2022

How do companies who have given a one-time grant to NGOs account for unspent CSR funds?

  • If companies have provided “One time grant” to the NGOs, that grant has to be spent within one financial year by the NGO.
  • If the project does not stretch over the  financial year. These projects can be categorised under “other than ongoing projects” in the annual action plan. 
    • Under  the annual action plan, the CSR Committee of the company is required to provide modalities for utilisation of funds. 
  • The CSR Committee shall recommend to the Board on budget allocation for any CSR project including modalities of utilisation of funds in every project. 
  • Funds allocated to such “other than ongoing projects” has to be spent within one financial year and there shouldn’t be unspent at the end of the financial year. 
  • If there is an unspent CSR amount, NGOs should return unspent funds to the companies and companies are not permitted to spend the unspent CSR amount which is related to “other than ongoing projects’ ‘, on any CSR activity during the intervening period of six months after the end of the financial year. 
  • Such unspent CSR amount is required to be transferred to any fund included in Schedule VII of the Act within 6 months from the end of the previous financial year. 
  • If companies foresee that there will be an unspent CSR amount at the end of the financial year, they may take the decision to categorise those projects as ongoing projects as well based on reasonable justification. Definition of ongoing projects can be referred below.

How do companies who have given a multi-year grant to NGOs account for unspent CSR funds?

  • If funding is spreading across multi-years, those projects must be categorised under “Ongoing projects”. 
    • Ongoing project has been defined under rule 2(1)(i) of the Companies (CSR Policy) Rules, 2014 as: 
      • (i) a multi-year project, stretching over more than one financial year
      • (ii) having a timeline not exceeding three years excluding the year of commencement
      •  (iii) includes such project that was initially not approved as a multi-year project but whose duration has been extended beyond one year by the Board based on reasonable justification
  • The project should have commenced within the financial year to be termed as ‘ongoing’. The intent is to include a project which has an identifiable commencement and completion dates. 
  • After the completion of any ongoing project, the Board of the company is free to design any other project related to operation and maintenance of such completed projects in a manner as may be deemed fit on a case-to-case basis. Note: The term ‘year’ refers to the financial year as defined in section 2(41) of the Act. If there is an unspent CSR amount pertaining to ‘ongoing projects’ at NGOs end, such unspent funds should be returned to the companies and companies have to transfer such unspent to a separate bank account of the company to be called as ‘Unspent CSR Account’ within 30 days from the end of the previous financial year. 
  • A company can pay back such unspent CSR amount to NGOs (from Unspent CSR Account) in the next financial year to execute further agreed project activities. 
  • A company can open a single special account, called ‘Unspent Corporate Social Responsibility Account’, for a financial year in any scheduled bank, to transfer the unspent amount w.r.t ongoing project(s) of that financial year. 
  • A company needs to open a separate ’Unspent CSR Account’ (in its accounting system) for each financial year but not for each ongoing project.

Companies who have written a cheque to their own foundation who in turn are supporting NGOs and there is an unspent CSR amount at foundation level

  • The similar treatment would be followed as per above. Two points to keep in mind:  
    • Foundations are to be treated as first recipient of the CSR amount just like NGOs receive CSR amount from companies directly. 
  • All formalities related to getting unspent CSR amount from the foundation/NGOs and depositing into a separate unspent CSR amount or depositing into any fund included in Schedule VII of the Act, as the case may be, should be done by companies itself. A foundation cannot do so on behalf of the companies.

Companies who have given FCRA funds: If there is unspent FCRA funds at the end of the financial year

  • It can be spent in the next financial year as per agreed project objectives and existing agreement with the donor. The agreement should be valid in the next financial year as well.
  • If there is unspent FCRA funds at the end of project period, the modalities of the unutilised balance can be decided in consultation with the donor and as per donor’s direction.
  • FCRA funds cannot be returned to the donor.
  • Also, FCRA funds cannot be onward granted / sub-granted by the NGO

Will funds at the 2nd  implementing agency account be treated as unspent or not ?  If a company’s foundation transfers money to NGO hence there is nil balance in their account, whose utilisation is considered final- the foundation or implementing agency?

  • Implementing agency utilisation would be final and an unspent amount should be considered as per implementing agency account.

If it is unspent on 31st March , would the  2nd implementing agency need to transfer money back to the foundation account? 

  • Yes, and the foundation will return an unspent amount to companies back.

Can a company’s foundation open an unspent account on behalf of the company? 

  • No, Companies need to open their own unspent account

In case of any queries, feel free to reach out to us at research@dev.samhita.org

Samhita–CGF partners with AMHSSC to aid 50,000 women to create thriving livelihood pathways

The REVIVE Alliance was set up with the mission of creating economic opportunities for vulnerable communities disproportionately impacted by the COVID-19 pandemic.

One of the Alliance’s mission, REVIVE Women@Work is to collectively drive economic recovery and resilience for low-income working women (small women-entrepreneurs and workers) through financial and digital inclusion, access to social security, skilling, and market linkages. Through these interventions, we aim to create sustainable and impactful livelihood opportunities for women to enter, sustain, and grow at their workplaces.

As part of this mission, we are happy to announce that Samhita – Collective Good Foundation (Samhita – CGF) has partnered with Apparel Made-Ups and Home Furnishings Sector Skill Council (AMHSSC) to complement the Government of India’s skilling mandate and augment the journey of 50,000 women to grow beyond gainful employment and create thriving livelihood pathways.

“Economically empowered women can be powerful catalysts for change. They tend to invest more of their income into the well-being of their families, have greater control over their reproductive health, and can significantly drive economic growth. Samhita’s partnership with AMHSSC aims to serve as a model to increase meaningful participation of women in the workforce and enhance their journey through skill building, adoption of positive health practices, and eventually become an agent of change in her community”

Priya Naik, Founder & CEO, Samhita Social Ventures.

Through this partnership, Samhita – CGF will enable livelihood linkages of 50,000 women to manufacturing units of large corporate houses, and support AMHSSC in offering customised and relevant services across 4 key areas critical to thrive in the workforce:

  • Worker health & well-being education and services
  • Awareness and Protection from Violence and harassment in the workplace
  • Economic Empowerment and Professional development
  • Encouraging Entrepreneurship

 “In today’s world, one not only needs to be skilled in a Particular sector but must also be aware of his/her rights, especially for women to know their gender related rights. AMHSSC along with CGF is committed to provide such insights to the concerned stake holders, and support their journey into meaningful employment opportunities”

Dr Roopak Vasishtha, CEO, AMHSSC

Through Revive Women@Work, we envisage a better normal where more women are gainfully employed and acquire the necessary skills to take control of their own lives.

A coalition to create a Better Normal for India’s Working Women and Entrepreneurs

Women@Work is a coalition — of businesses, philanthropies, social organisations and other stakeholders — to drive economic recovery and resilience of low-income women workers and micro entrepreneurs, and enable them to grow and thrive. The goals of Women@Work are aligned to Samhita-CGF’s REVIVE Alliance, a $15 million blended finance platform, supported by United States Agency for International Development (USAID), Michael & Susan Dell Foundation (MSDF), Omidyar Network India, British High Commission New Delhi and United Nations Development Programme (UNDP). The Alliance is dedicated to the revival, resilience and growth of India’s informal economy. It is also a part of the U.S.-India Alliance for Women’s Economic Empowerment.

Enabling the Recovery, Resilience and Growth of Women Workers and Micro Entrepreneurs

By bridging the gender gap in the workforce and providing more income opportunities for women, India’s GDP can be increased by a whopping $2.9 trillion. There is ample evidence to prove that enabling the growth and productivity of women has a multiplier effect on the socio-economic outcomes of families, communities and economies. We have also witnessed the same through our work over the years.

The challenges to achieving this increase in female labour force participation are immense, especially due to the limitations brought on by the COVID-19 pandemic, but the gains have the potential to push India to the next stage of growth. 

This mission cannot be achieved by any one company or government or stakeholder group. REVIVE Women@Work is a call-to-action for a joint effort to spur the Recovery, Resilience and Growth of Women Workers and Micro Entrepreneurs.

How are we going to create a better normal for working women and microentrepreneurs?

With Women@Work, companies, foundations, social organisations, bilateral and multilateral agencies, through business and CSR channels, will:

To impact India’s women by facilitating their:

Range of Interventions

The Women@Work coalition will leverage technology to maximise opportunities for women at two levels:

  1. Creating a tracking system that will provide evidence on the value of the interventions for the beneficiary. This will enable better decision-making and evidence-backed program design.
  2. Creating a digital profile of the woman, to understand the social products and services required to create a continuum of support. This will enable us to maximise the support available through her life cycle.

Alignment with the REVIVE Alliance and U.S.-India Alliance for Women’s Economic Empowerment

We launched REVIVE to create a pathway to prosperity for the restoration of worker and micro entrepreneur livelihoods. Aspects of Women@Work are supported by the USAID-funded REVIVE Alliance, which launched in October 2020 to focus on economic recovery, predominantly for women and youth.

Women@Work is also a part of the U.S.-India Alliance for Women’s Economic Empowerment, a public-private partnership between USAID, the U.S Department of State, USISPF, and George Washington University, launched by USAID Administrator Samantha Power in September 2021.

Samhita’s Collection of Stories of Change

Imagine a day when women in our country will have absolute agency to take decisions in their personal life and to flourish professionally. Imagine a day when access to quality medical-facilities will not be a luxury reserved for the elite. Imagine a day when India’s populace will be so educated and skilled that it will not need to worry about rotikapdamakaan: Instead it will be able to climb to the higher rungs of Maslow’s pyramid. We, at Samhita, work to see that day.

Gandhiji said: “Be the change you wish to see in the world.” In that spirit, we strive for the day to arrive sooner. We agree that the above scenario constitutes a remarkable change. It’s more like a metamorphosis reflected on the cover of this book. Nevertheless, we are committed to help solve wicked socio-economic problems in our little ways.

Often, change is not fully grasped through numbers given the colossal issues we face. Here, stories of change serve as a beacon which spotlight the real lives impacted.

This is a collection of stories of change representative of the year gone by. These stories are divided into four segments:

  1. Change in People: These accounts of transformation in our beneficiaries’ lives, is what keeps us going.
  2. Change in Places: A corollary to the above segment, these stories give a sense of varied geographies reached.
  3. Change in Partners: This section chronicles the symbiotic relationship we share with our partners.
  4. Change in Processes: This part documents our efforts to bring about systemic shift to impact the entire ecosystem such that change sustains for a period beyond our intervention.

We hope that in the following pages, you meet someone whose perseverance inspires you, you travel to a place which is unlike any place you’ve travelled to, you partner with someone to support a cause area close to your heart, and you recognize the beauty in the interconnectedness of an ecosystem.

CSR Trends & Opportunities in India: 2021

Samhita has conducted a CSR research study in collaboration with the Japan International Cooperation Agency (JICA), which coordinates Official Development Assistance for the government of Japan. JICA assists economic and social growth in developing countries, along with promoting international cooperation.

This research report on ‘CSR trends and opportunities in India’ maps the CSR landscape in India, as experienced by Japanese, Indian and MNC companies, as well as implementation partners (NGOs and Social Enterprises). The report achieves this by taking an in-depth look at the following:

  • National macro-level CSR trends on compliance, spending by cause areas, geographies and modes of implementation,
  • Findings surrounding the CSR approaches, types of approaches to CSR and challenges as reported during surveys and quantitative interviews conducted with Japanese companies, Indian companies and MNC companies operating in India,
  • Insights from qualitative interviews with implementation partners regarding their approaches to funding and CSR partnerships, benefits they see in engaging with CSR and challenges they face while building and maintaining CSR partnerships,
  • Defining features of an ideal CSR program and CSR trends in the near future,
  • CSR recommendations for Japanese companies operating in India and recommendations for JICA for creating a more enabling CSR ecosystem.

5 post-COVID trends from Indian entrepreneurs

India’s MSME sector contributes to nearly one-third of its GDP. However, the sector is particularly vulnerable to crises like the COVID-19 pandemic because they typically have fewer resources than large businesses.

The World Economic Forum conducted a study with 107 Indian entrepreneurs to understand how they have navigated the pandemic and found five prominent trends in their businesses.

Among these trends is a significant rise in social entrepreneurship in India and an emergence of support structures for small businesses. Samhita-CGF’s REVIVE Alliance is one such facility that is utilising blended and grant-based financing models to support informal sector entrepreneurs during the pandemic.

Bringing humanity to the boardroom

In 2014, India became the first country in the world to mandate corporate social responsibility (CSR) spending. CSR in India isn’t about making one-time charitable donations – it has a higher purpose of giving back to the community and creating positive social change. The mandate has made Indian corporates think more proactively about social issues in India and focus their ideas of business responsibility and purpose.

In this article, ADP Rethink traces the evolution of CSR in India as it goes from being a regulation to redefining corporate citizenship.

FAQs On The CSR Law Amendments 2021

The Ministry of Corporate Affairs, on 22nd January 2021, updated the Companies Corporate Social Responsibility Rules. These CSR law amendments bring several significant changes to the national CSR policy including an increased focus on impact assessment, decriminalisation of non-compliance, greater inclusion of international organizations, and provisions altering the guidelines for management of excess funds and surplus expenditures. 

Here are the answers to some frequently asked questions (FAQ) about the CSR Amendment Rules 2021:

What activities qualify as CSR activities?

According to the latest amendment, the following expenditure will now be included in the list of CSR activities:

  1. Research & development of new vaccines, medication, and medical devices related to COVID-19 in the firm’s normal course of business
  2. Overseas training of Indian sports personnel representing any State or Union territory at national level or India at international level.

According to the latest amendment, the following expenditure will NOT be included in the list of CSR activities:

  1. Contribution of any amount directly or indirectly to any political party
  2. Activities benefiting employees of the company
  3. Activities on sponsorship basis for deriving marketing benefits for its products or services

What all must a company’s CSR Policy mandatorily include?

A company’s CSR Policy needs to mandatorily include:

  1. List of CSR projects that are approved to be undertaken
  2. The manner of execution of such projects
  3. The details of utilization of funds for the projects
  4. Implementation schedules for the projects
  5. Monitoring and reporting mechanism for the projects
  6. Details of impact assessment, if any, for the projects undertaken by the company

What are “Administrative Overheads” and what does the definition include?

Under the new rules, “Administrative Overheads” will only include expenses directly incurred by the company on “ general management & administration” of CSR functions. 

Therefore, the expenses incurred by the company on designing, implementation, monitoring, and evaluation of a particular Corporate Social Responsibility project will not be included as part of the administrative overheads but as a CSR expenditure.

Also, the board shall ensure that the administrative overheads shall not exceed five percent of total CSR expenditure of the company for the financial year.

What is the penalty for non-compliance to CSR rules and obligations?

A significant departure from the erstwhile CSR policy, non-compliance to the CSR rules and obligations will no longer be treated as a criminal offence. These will now be treated as civil wrongs.

What CSR related information does a company have to disclose publicly:

The 2021 CSR amendment mandates that every company must disclose the following:

  1. Composition of the CSR Committee
  2. The CSR Policy
  3. Projects approved by the Board 

Has impact assessment of a company’s CSR projects made mandatory in the new CSR law amendments?

Impact assessment is only mandatory for companies with CSR obligations of INR10 crore or more of any and all projects with outlays of INR1 crore or more. These Impact assessments must be undertaken by an independent agency.

What is an international organization and what CSR functions can it fulfill?

A company may engage International Organisations for designing, monitoring and evaluation of the CSR projects and for capacity building of their own personnel for CSR.

“International organization” means an organisation notified by the Central Government as an international organization under section 3 of the United Nations (Privileges and Immunities) Act, 1947.

What is to be done with additional income being generated through a company’s CSR projects?

Any surplus income being generated through a company’s CSR activities can not form part of the company’s profit. The surplus shall be reinvested into the same project or shall be transferred to the Unspent CSR Account.

What happens if a company spends more than its required CSR expenditure?

Any CSR expenditure that exceeds the required amount can be carried forward to the next three years.

Can the company create or acquire any capital assets using its CSR expenditure? 

CSR funds may be spent on creating or acquiring capital assets. Although, these capital assets can not be held by the company. They must be held by any one of the following entities:

  1. A Section 8 company
  2. A registered public Trust or Society having charitable objects 
  3. Beneficiaries of said projects
  4. Public authorities

Is there any provision for projects that go on for longer than one year in the new CSR Law Amendments?

A new concept of an “ongoing project” has been added to the rules. ‘Ongoing Project’ means a multi-year project undertaken by a Company in fulfilment of its CSR obligation having timelines not exceeding three years. These can include projects that were initially not multi-year projects but were extended based on reasonable justification.

What is a Utilization Certificate?

A Utilization Certificate must now be presented by the CFO to the Board, certifying that all the funds allocated by the Board have been utilized in a manner approved by the board.

Impact Assessments are top priority – What do the new CSR rules say

On January 22, 2021, the Ministry of Corporate Affairs amended the earlier CSR Rules of 2014 and notified the Companies (Corporate Social Responsibility Policy) Amendment Rules 2021, to make impact assessment mandatory for companies undertaking CSR activities and CSR expenditure above a specified threshold. The move aims to create accurate parameters in assessing the impact of CSR activities by shifting the focus from expenditure alone to impact assessment, and improve the quality of CSR projects while enhancing accountability and transparency.

This FAQ is a result of collaboration between Samhita & Centre For Advancement of Philanthropy. It has been written with the guidance of Noshir Dadrawala

Following are the answers to some of the most frequently asked questions (FAQs) about impact assessment:

Q1. What is the need for impact assessment?

Impact assessments help funders, grant-makers and companies to understand and evaluate the impact of their social investments in programmes and projects on their target beneficiaries or society. The findings of an assessment also help funders and companies to make evidence-based decisions in implementation and identify hurdles, allowing for programme continuity, scale, sustainability, efficiency, etc.

Q2. Do all companies need to conduct impact assessments?

According to the January 2021 amendment, impact assessment is mandatory for companies with a CSR budget of INR 10 crore or more in any fiscal year and all projects with outlays of INR 1 crore or more. These impact assessments must be undertaken by an independent agency.

However, it is suggested as best practise that impact assessment be undertaken for all projects as standard procedure,. Especially long term projects.

Q3. According to the new amendment, when must companies undertake impact assessments?

At least one year after programme implementation is complete.

Q4. If a company has a multi-year project, should the impact assessment be carried out after completion of the project?

Yes. As per Rule No. 8, if companies have multi-year programmes (say 3 years), impact assessment needs to be conducted after completion of three years of the programme. Additionally, a follow up assessment needs to be conducted one year after the completion of the programme to better understand the programme’s after effects.

However, if programmes are renewed or scaled up after each financial year, they would be treated as individual single year programmes, and separate impact assessments should be taken up every year.

Q5. Who can conduct an impact assessment?

Companies or their CSR initiatives cannot conduct impact assessments (selfassessment) on their own. An independent agency must be engaged for the assessment.

Q6. Is there a limit on the expense for undertaking impact assessment?

Yes, impact assessment related expenditure may be booked as a CSR expense as long as it does not exceed 5% of the total CSR spending or INR 50,00,000, whichever is less.

Q7. Is the limit applicable on the entire CSR budget or per project?

The limit is applicable on the total CSR budget of the financial year.

Q8. Will the cost for researchers/consultants/agencies be counted as part of the INR 50 lakh or 5% limit or can the spending be accounted for outside that?

Under the amended rules, “Administrative overheads” will now mean expenses incurred by the company for ‘general management and administration’ of Corporate Social Responsibility functions in the company but shall not include the expenses directly incurred for the designing, implementation, monitoring, and evaluation of a particular Corporate Social Responsibility project or programme.

Further, a Company undertaking impact assessment may book the expenditure towards Corporate Social Responsibility for that financial year, which shall not exceed five percent of the total CSR expenditure for that financial year or fifty lakh rupees, whichever is less.

Thus, in our opinion, cost for researchers/consulting is neither part of the INR 50 lakh cap, nor the 5% cap on Admin expenditure

Q9. Can a project conduct impact assessment prior to completion of one year (short duration project) or should it wait for one year? If done earlier, would it be counted as part of the compliance?

The project should have completed at least one year. If it is an on-going project of three years, it would make sense to study impact only on completion of three years.

If you have any queries, want to know how to undertake an impact assessment or connect with the Samhita Impact Assessment team, feel free to reach out to us at csr@dev.samhita.org

To know more about the other 2021 CSR Amendments check out Samhita’s detailed FAQ.