On 18th, December 2012, the Indian Legislature passed the Companies Bill 2012. One of the key changes in the new bill is the introduction of a Corporate Social Responsibility clause making India the first country to mandate CSR through a statutory provision. While a company is not subject to liability for failing to spend on CSR under the 2 Percent Formula, a company and its officers are subject to liability for not explaining such a failure in the report of the board of directors.
Pratik Kumar, Magic Bus CEO, answers questions on the Corporate Social Responsibility (CSR) Clause in the Companies Bill 2012.
Keeping in view the areas mandated as part of Corporate Social Responsibility (CSR), how does it impact your organisation's focus and investment?
Our focus has been on building viable collaborations with Corporations who want to create real impact. Our investment will continue to be on children and youth, two crucial population segments on which our country's future depends. The hope, for me, is that since giving in India as a percentage of GDP is very low compared to global standards, this quantum jump in Corporate giving, will, to an extent, bring Indian philanthropy closer to global standards. Whether or not it will make a real dent on the nation's development issues, however, depends on several other factors.
The first set of challenge we foresee would be in the Corporate sector's interpretation of what constitutes real-impact investments. There is a strong welfare-orientation in India, perhaps driven by the fact that traditionally, giving has been associated with religious traditions. Thankfully, this understanding is now changing. The world over, investments in charity are being preceded by needs assessments and informed decisions being taken to channelise funding to those causes that need it the most. The young CSR specialisation needs to gather the best practices in order to choose highest, long-term on-ground impact over short-term gains.
The second set of challenge is with the government sector, in learning how best to leverage Corporate Social Responsibility to meet the nation's foremost development goals.
What will be the impact, if any, on the NGOs or social enterprises (you engage with) and the communities/causes they support?
NGOs and social enterprises can look forward to sharing the values they have upheld so far on the crucial concerns of the country today — concerns like poverty alleviation, gender equity, on children's development. This is a unique opportunity for all three players in development – Corporations, NGOs and the GOvernment, to create a working collaboration that makes a real dent on the Nation's standing in development.
As a sector, we would need to upgrade our professionalism and skills to match the new demands that such a large leap in funding would mean for all of us. At Magic Bus, given that our Founder is himself from the Corporate Sector, we had foreseen the impact of increasing CSR by starting a process of professionalising with a increased focus on transparency and measures to systematise operations with the help of a set of Standard Operating Procedures that today oversees everything from Finance to Communications.
Are the projects currently implemented by your organisation 'sustainable'? To the extent possible, do elaborate upon the complexities.
Sustainability was a major concern for Magic Bus from Day One. We knew that the country is replete with innovations, the true test is not in the generation of the innovation, but in the replicability of it. Deliberately, we defined our model in terms of its adaptability across contexts. In a crucial strategic choice, we decided to use local, community-based volunteers to deliver programme on the ground, who use our training to not just deliver the work but also build on their own skills and achieve their life goals. I would say this was a crucial choice that enabled us to go from being a small island of success to a demonstrable model of development, one that has traction with policymakers and Governments.
Please share the journey of one project implemented by your organisation, with focus on its impact at the grassroots.
Our flagship work, in Mumbai, is one that is a fairly emblematic of the Magic Bus journey. Our Founder, Matthew Spacie, started work as a weekend volunteer activity with just 30 street boys he was coaching to play rugby. Over years, he noticed that his coaching was leading to some fairly revolutionary changes in the lives of the children he was coaching – they were getting interested in formal education, adopting healthy behaviours and imbibing crucial life skills such as how to work better in teams. Over the next few years, Matthew and his team of volunteers expanded his work to cover a few hundred more children. More importantly, the team worked on using classical learning theories to build the coaching sessions into what we now call the Magic Bus Sport for Development curriculum. Off the playing field, the team started working intensively with the local communities, building consensus on children's issues and rights, and advocating for a more child-friendly family and community.
By 2007, we were ready to test the waters in new geographies to see whether this — the Magic Bus model — was scalable. The Mumbai project remained our fist and most important learning ground, a learning that is today being replicated across 2000 communities from 12 States of India.
One insightful thought, experience or learning that you will like to share with your counterparts as well as other individuals in the causes domain.
Collective wisdom points at the right way to end poverty. We know we need empowerment in the areas of education, health and gender rights; we need equal access to markets; and lastly, we need robust social and political systems. We also know that no one entity (Corporations, the GOvernment,can act in isolation to or NGOs) can solve mega issues like this that are impacting India. But across sectors, we are tuned to not collaborate. Consider NGOs alone: each operates in a limited geography and/or scope of work, a territory defended vehemently. It has become a highly fragmented effort, where many of the actors are doing great work, but without consolidating services are limiting large scale impact. I think the lesson learnt from 24 years of working in India — both in the Government and Non-Governmental sectors — is that collaboration, Without collaboration, or a shared value system, a common purpose, we as a country will continue to remain fragmented and ineffective.