Using market based approaches to CSR

Using Market-Based Approach

to CSR

- Harsh Shrivastava

- Centre for Civil Society

January 21, 2014

Presentation to IIM, Udaipur

CSR | Centre for Civil Society | www.ccs.in 1

Emphasize the Corporate in CSR

2/18CSR | Centre for Civil Society | www.ccs.in

o Individuals can give charities of their choice.

Often, can choose to give to temples

o Governments must focus on development and social

infrastructure

Government has much more resources; can compel

o Corporate should focus on the Corporate or

business side of social responsibility.

But, in all focus on the marginalized

Who are the marginalized


o Dalits

o Muslims

o Naxal-affected area residents

o North-East residents

o Women

o Youth

o Transgenders

… fourteen disadvantaged groups defined by the

Planning Commission!

Who are not the marginalized


o Artists—painter, sculptors, etc.

o Sportsmen

o Middle-class parents of your own schools.

o Traffic islands and gardens near your offices

o Planting more trees—good in the long run, but the

poor are here today.

… all of these categories should be targeted through

you marketing and brand-building budgets.

Capabilities + Opportunities = Growth


o Both are needed to promote growth, especially

inclusive growth.

o Capabilities without opportunities cannot create

growth.

o Opportunities without capabilities cannot sustain

growth.


Focus so far is on the Capabilities side of the

equation

o Education

o Skills

o Health

o Hunger

o Power

o Banking



Not enough on the Opportunities side

o Opportunity to start a business

o Opportunity to grow a business

o Opportunity to exit a business

Even a street-vendor is a capitalist; she survives by

competing in the market every day; not by subsisting on

doles.



CSR guidelines of the government want companies

to focus on the capabilities.

Why replicate the government, which has far more

resources and legitimacy.

Big problem is that government outlays is not

resulting in outcomes. Because of lack of staff, inter-

agency issues, poor procedures, etc.

Capabilities is the government’s job


o You understand business and profit best.

o You realize that it is in your long-term interest to

increase the earnings of your future customers.

o In this, you steer clear of government

entanglements.

Focus on the opportunities side

Creating more opportunities: Business


• Outsourcingo Tata-DICCI collaboration

• Mentoringo BYST is a good model

• Financingo No moneylenders by 2017!

• Technologyo Mobiles for Muslims to make more money

• Support grow-upso Not just start-ups

Creating more opportunities: Government


Create physical infrastructure

o Offices, markets, haats, parking lots

Make it easy to do business

o Arun Maira committee for states

o Need equivalent for cities and panchayats

Remove KYC norms

o Currently make it impossible to get regular loans

Reduce petty corruption

o Street-sellers’ business limited by the reach of their hands

Creating more opportunities—direct 1/


o Offer stalls in your offices for small businesses to

sell to your employees.

o Give your boardroom when not needed for NGOs to

host fund-raisers.

o Provide hardware—including old mobile phones to

small businesses

o Get your main bank to provide easier loans to small

businesses

o If possible, commit to buying some products and

services—even if slightly costlier.

Creating more opportunities—direct 2/


o Get and give details of relevant government

schemes, subsidies, and programs that those you

work with can use.

o Mentor them in applying for such grants.

o Connect these local entrepreneurs to your suppliers

and, if possible, your customers too!

o Teach the basics of marketing, finance, accounting,

to these entrepreneuers.

o Invite the children of such people to your offices to

show them how businesses work—and inspire them.

Time more than money


o All these points require a bigger investment in time

of individuals and businesses, rather than money.

o But your time is your most valuable resource—so

you will use it well.

o Also, this is of higher marginal value to your CSR

“customer” than money that she or he can get from

some other source.

o When you give time, you give it to another

individual—not to some agency.

So where should we spend 2 percent?


o Some of it will be spent by your chairman’s wife—

but not more than 5 percent of the total.

o Some will be spent on local beautifications—

another 5 percent

o Some will be spent on providing improvements to

schools and other facilities from local communities,

as part of being a good citizen—perhaps 10 percent.

o Another 10 percent will be to satisfy political

requests—5 percent at the national and 5 percent at

the local level.

So where should we spend 2 percent?


o But spend balance on improving physical markets

(pay for more shop—collectively);

access to markets (including vans and other

vehicles—like Nitish’s cycles to girls);

on mobile phones with apps that can help;

on running a business bootcamp for Dalits;

on buying group health insurance.

How to organize your CSR


o Partly by helping other NGOs—space, mentoring.

o Partly by creating your own corporate foundation,

which can channel the work, hire people (at lower

salaries).

o Partly by your HR department—to coordinate

volunteering and payroll giving

o Partly by your regional and local heads who need to

respond to local pressures.

Companies focus on opportunities;

Government on capabilities

More capabilities

Plus

More opportunities

Equals

Inclusive growth

CSR | Centre for Civil Society | www.ccs.in 18

Government & Nonprofit

Using market based approaches to CSR