COVID-19 impact is massive, but other social causes need CSR funding too, say NGOs

With a major chunk of CSR funding having gone towards the PM-CARES Fund, there are few resources left with corporate organisations to fund new initiatives

101 India August 05, 2020 11:08:45 IST
COVID-19 impact is massive, but other social causes need CSR funding too, say NGOs

The COVID-19 pandemic and the attention to providing relief for those affected by it has thrown non-governmental organisations' (NGOs) functioning and philanthropy into disarray. Relief for the pandemic-hit has become the focus to such an extent that other causes — like health, education, women empowerment, employment, nutrition, forest rights and climate change among a host of others — have been thrown onto the back-burner.

One of the fallouts of the pandemic has been the growing rates of crime against women. The National Commission for Women (NCW) reported a 94 percent rise in complaint cases. In June alone, 2,043 complaints of crimes committed against women were reported — the highest in the past eight months. Yet there isn't much being done to address this issue as COVID-19 relief has taken centre stage.

The pandemic has unleashed an unprecedented triple crisis viz health, economic, and social, that has affected NGO operations, staff, and finances. In March 2020, thousands of nonprofit organisations (NPOs) that engage with low income and vulnerable communities on critical issues like health, education, women’s empowerment, livelihood creation, and more had to halt their programmes due to the nationwide lockdown, according to a study by the Centre for Social Impact and Philanthropy at Ashoka University.

It conducted 50 interviews with nonprofit leaders in April and May 2020, to assess their engagement in relief work, operational and financial status, and coping strategies during the pandemic.

Around 54 percent of NPOs said they had funds to cover fixed costs for a year while 16 percent said they had funds to cover costs for even longer. Worryingly, 30 percent said they had funds to cover only six months or less.

Organisations reported considering drastic measures including suspension of core programmes and trimming down team strength if funding was not forthcoming. As most philanthropic funding is being channelled towards immediate relief work and healthcare needs, conversations with funders on core programmatic funding of these NPOs have stalled, the study revealed.

CSR funding focussed on COVID-19 relief

RPG Enterprises' RPG Foundation, for instance, is currently focusing on causes that are aligned towards COVID-19 relief. The foundation's initiatives are in the domain of eye care, women empowerment, education and local community development besides carrying out the group companies' social outreach programmes.

Radha Goenka, director, RPG Foundation, said for the current year they are 'comfortably placed' as the foundation has received last year's profit for this year's action plan.

"We are not facing a fund crunch and have been able to give money towards COVID-19 relief, and have collaborated with NGOs working on the pandemic-centric projects. We know funds are drying up for many NGOs. However, we are not taking up any new initiatives as we do not know how much funding will be available to us next year," Goenka said.

Since the outbreak of the pandemic, a majority of the Corporate Social Responsibility (CSR) funding has been channelled towards COVID-19 relief. CRISIL drew up two lists of top 100 companies by revenue and CSR spending, and found that 70 firms appeared on both lists, while 60 figured in only one. Of this total of 130 companies, 113 spent on pandemic-related mitigation. In less than two months through 15 March, 2020, 84 of these companies (including support through the corporate group) had spent Rs 7,537 crore on causes that can be classified as CSR spend.

Maya Vengurlekar, chief operating officer, CRISIL Foundation, said, "Interestingly, the 130 companies analysed by CRISIL accounted for nearly 80 percent of the total CSR spend by all listed companies in fiscal 2019. Assuming other companies would have followed a similar path, India Inc has already allocated over 80 percent of the annual CSR budget to address the pandemic. This could impact spending on other areas this fiscal."

FSG, a social action nonprofit, said funding for traditional CSR activities could be reduced by 30 to 60 percent after it conducted in-depth interviews with 22 NGOs and 18 CSR heads and CEOs. Many NGOs said in instances where a long-term CSR funder has made an informal commitment or verbal agreement, there is a possibility that funding may not come through.

PM-CARES Fund, a major benefactor

The Prime Minister's Citizen Assistance and Relief in Emergency Situations Fund (PM-CARES Fund) for COVID-19 relief, announced by Narendra Modi on 28 March, has received donations from corporates and other donors across the country. The annual average CSR budget in India is estimated to be Rs 15,000 crore and according to news reports, the PM-CARES fund has received over a third of it.

"Around 60 percent to 70 percent of corporate spend has gone into this fund or some other COVID-19 related projects. What about other projects?" asked Chachra of ActionAid India that works for child rights, women’s rights and emergency responses. "Another way of doing this would be to give funds to civil society for disbursal," he said.

"What was the need for the new fund in the first place when there are many others for natural disasters and calamities?" asked Ingrid Srinath, director, Centre for Social Impact and Philanthropy at Ashoka University. "I have heard that there has been overt pressure on corporates to donate money to the fund as everyone wants to be on the right side of the government. There is no data yet on how much money has been collected, except that Rs 3,000 crore was given towards buying ventilators," Srinath said.

With a major chunk of CSR funding having gone towards the PM-CARES Fund (donations made to the Fund enables donors to get 80G benefits for 100 percent exemption under the Income Tax Act, 1961 and also qualifies to be counted as CSR expenditure under the Companies Act, 2013), there are few resources left with corporate organisations to fund new initiatives. Amitabh Behar, CEO, Oxfam India that combats inequality, poverty and injustice, said a significant chunk of resources that would have been available to address other issues by civil society has gone to the PM-CARES Fund.

"Funds are available to NGOs, but only if they are COVID-19-related. It is true that we have a humanitarian issue with the pandemic but going ahead, it will be difficult years for NGOs to get funding," Behar said. Concurring with him, Harsh Jaitli, CEO, Voluntary Action Network India (VANI) — an apex body of Indian voluntary organisations said CSR funds cannot go into the PM-CARES Fund as it is a public charitable trust. "According to the new CSR rules, trusts and foundations cannot carry out CSR activities," he stated.

What can be done

Govt should increase healthcare spend: All governments that come to power commit to providing two to three percent of GDP to healthcare, but contribute just over a percent and less than two percent, said Behar, adding, "If this wasn't the case, there would not be a situation like the migrant crisis during COVID-19."

Provide financial relief package to NGO sector: "Britain announced an extra £750 million ($930 million) of funding for frontline charities, so they could continue their work during the coronavirus outbreak. Some months ago, our government announced a Rs 20 lakh crore economic stimulus package across sectors. How about announcing one for the NPOs too?" asked Sandeep Chachra, executive director, ActionAid India and Co-chair, World Urban Campaign, UN-HABITAT.

Government-NPO collaboration needed: The new normal of working from home, social distancing etc has changed everything, said Jaitli of VANI. The government, CSR arms and NPOs have to work together as this crisis continues and also for future causes. It is important funding is provided and ongoing projects are not starved of funds.

Industry should take care of contract workers: Everyone is talking about a supply chain crisis, but why does the corporate industry not take care of its workers that it sources on a contractual basis, asked Behar. "For instance, if an industry is procuring sugar from sugarcane fields supplied by a contractor, it is responsible for what is happening in the sector. It cannot wash its hands of it all by saying it is only concerned with procurement," he added.

Support from PM-CARES Fund for NGOs: At least Rs 9,677.9 crore ($1.27 billion) has been collected in the PM-CARES fund for COVID-19 relief, according to an analysis by IndiaSpend. These donations have been made in the 52 days since the fund was announced on 28 March. A small portion of this fund would help save the jobs of employees at NGOs and support other important causes, said Ashoka University's Srinath

The author tweets @SulekhaNair8

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