Is your impact audited?

We all remember preparing for exams as students; it was at the last minute on numerous occasions. For some of us, burning the midnight oil or studying just a few days (even hours) ahead was the best strategy. In such cases, the adrenaline of making it to the other side would ensure good outcomes. 

This analogy makes a wonderful case to explain the efforts taken to reign in the chaos near the end of the Financial Year, and the sustainability arms of corporate organizations grappling to get their houses in order.

To remind us all, the Government of India enacted a ruling in 2013 under the Companies Act where certain companies are required to spend at least 2% of their average net profit from the preceding three years on CSR activities. 

The Act as of 2022 stands revised, implying a few things and more.

  • Companies must have CSR committees.
  • Unspent monies must be put aside in their “Unspent CSR account.”
  • Impact Assessments can be considered CSR spending and cannot be greater than 2% of CSR spending or Rs 50 lakh, whichever is higher. 

Why is this good news?

It now allows for more significant Impact Assessment expense, which implies better programming, planning, and execution by corporate social responsibility folks. 

I categorize these clients or partners into four subsets below. 

Early risers
The rush begins around December, right before the West starts to go into holiday mode for Christmas and New Year. Mind you, these are the “Early Risers” or partners who realize well before the D-date that compliance requirements mandate that they get their third-party Impact Assessments done. They may have some older datasets for comparison, have a good sense of what needs to be done, and want to be ready for their board meetings at the end of March or April with numbers indicative of the ‘good work’ done. Typically, showcasing project stories via dashboards and case studies to bolster the numbers as a part of their strategic request. 

New Year, New Gear

The second category is “New Year, New Gear”. These are partners who realize that the last quarter is upon us. We are twelve weeks away from March 31st, and for them to have a new strategic plan for the subsequent financial year, they must be able to measure and prove that work done so far was impactful, or even better – worth it. They take about two weeks to find the right partner, get the research done via them, have the third party collect data, put down the right indicators, showcase improvement, and be ready for what the Board(s) may have to say. 

Fishing in February

The third category is those “Fishing in February”. It is now do or die to find a third-party assessor somehow. There is just enough time to combine and pair some reports with data. They can only partner with organizations willing to get things started simultaneously in multiple states to evaluate multiple programs and write short briefs of succinct reports. Piecing together short video stories may still be possible, but collecting qualitative data and analyzing it across multiple stakeholders or states is largely impossible.

Mayhem in March

The fourth and the one with the highest risk threshold is the one I like to categorize as “Mayhem in March”. This is perhaps just a namesake category to get some numbers out in the public domain or to push through weekends to get something worthy for April. This puts much pressure on the evaluation partner and compromises the sanctity of the report and the program itself. As far as possible, this is a bad idea! These team members may be part of multiple teams, and CSR evaluation as a task somehow got derailed from its original January deadline.

Historically, evaluations were looked at from a judgmental lens, i.e., why should I pay a third party to tell me whether my money was spent right or whether my program had any impact at all? 

It had a counterintuitive ring to it. The development sector has come a long way since. The third-party end-of-year evaluations are now looking at report cards to help figure out what went right, what can be improved, and which partner did good and therefore deserves more funding. It’s incentivizing the social sector ecosystem by bringing in the merits of competition and performance. 

The social sector is the underdog in our meritocracy race. If the sector does well, the superset of people do well. It means our policies are good, and our government, philanthropists, and CSRs are on the right track. The underdog is the answer to creating a WIN-WIN for all.  



Views expressed above are the author’s own.


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