UNIT 3

ROLE OF CBOs AND NGOs IN DRIVING

CSR INITIATIVES

Structure
3.1 Introduction
3.2 Evolution of the Role of NGOs in CSR Practice
3.3 Corporate – NGO Partnership
3.4 Identifying the Right NGO
3.5 Rating Scales for NGOs
3.6 Successful Case Studies of NGO – Corporate Partnership for CSR
3.7 Importance of Being a Well Rated NGO
3.8 Let Us Sum Up
3.9 Keywords
3.10 Bibliography and Selected Readings
3.11 Check Your Progress – Possible Answers

3.1 INTRODUCTION
In the previous unit, you learnt about the nature and importance of relationship
between agencies that are identified as key stakeholders in the design and
implementation of a CSR program. In the Indian context, inclusion of CSR
in the Companies Act in the year 2013 witnessed a simultaneous rise in the
number of Community Based Organisations (CBOs) and non government
organisations (NGOs) in the country. Ever since, their numbers have been on
the rise. This is because such organisations are seen as having the capacity
as well as the understanding to design and implement development projects
at the grassroots to drive positive change. Thus, as the companies came
under the ambit of being legally bound by the CSR Law, they increasingly
looked at CBOs and NGOs (hereafter referred to as NGOs) to drive their
CSR practice. As you read in the previous units, these organisations are
considered to be a key stakeholder in furthering CSR practice. However,
we need to understand in greater detail as to what role is envisioned for
NGOs in driving CSR initiatives? How can a company ensure that the right
NGO is selected for a project? Are there are any yardsticks or standardised
measures against which NGOs can be rated for quality? Answers to these
questions lie in understanding the modalities of NGO engagement in CSR.
After studying this unit, you will be able to:
●● Explain the role that NGOs play in the practice of CSR
●● Discuss the need for identifying the right NGO for the right project
or domain
●● Describe the yardsticks that can serve as reference points to evaluate
the quality of an NGO.

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 Implementation Partnership
3.2 EVOLUTION OF THE ROLE OF NGOs IN CSR
PRACTICE
The long tradition of Indian businesses to engage in philanthropy/charity
work has been acknowledged for a long time. During the early stages of
industrialization in the country, social responsibility was driven by business
families setting up trusts and institutions such as schools, colleges, hospitals,
etc., along with donations to temples and pilgrim rest houses. The mid to
late 1800s saw Indian industrialists grouping together into associations that
provided the necessary groundwork to what is now popularly called corporate
social responsibility (CSR), (Arora & Puranik, 2004). Many authors also
tend to agree with a general classification of these initiatives into models of
social responsibility as evident in India and elsewhere (Arevalo & Aravind,
2011) (Balasubramanian, David, & Fran, 2005) (Kumar, Murphy, & Balsari,
2001). These models include the following:
1. The ethical (Gandhian) model
2. The statist (Nehruvian) model.
3. The liberal (Friedman) model.
4. The stakeholder (Freeman) model
In all these models of social responsibility, there are several non business
actors such as NGOs which have played an important role. Let us briefly
discuss their role which will also help you in understanding the emerging
role of NGOs in the CSR space.
In the ethical model spearheaded by Gandhi, emphasis was laid on a change
in consciousness to enable redistribution of wealth, based on the principles
of social justice. During this time, nationalistic ideas for a progressive and
modern India drove investments into physical and social infrastructure
including creation of institutes of scientific and technical research and
academic repute.1 The Nehruvian led Socialist Indian government that
formed after Independence reportedly constrained business operations.
During this phase Arora and Puranik note (Arora & Puranik, 2004) that
a high tax regime and declining business accountability led to setting up
of a large number of charitable trusts that were allegedly intended for the
purpose of tax evasion. 1970s saw a revival of corporate interests in social
concerns, in the new form of corporate philanthropy as opposed to family
philanthropy [(Sundar, 2000) cited in (Arora & Puranik, 2004)]. Growing
profitability of Indian businesses transformed them into institutions that run
organized corporate activity and motivated them into a form of corporate
citizenship. This phenomenon has continued in the last four to five decades
during which corporates have started to assist the State in its development
initiatives in a proactive fashion.

1)
Pushpa Sundar in her book (Sundar, 2000) chalks out the history of charity work
conducted in India from pre industrial times to modern times. In her reference to this
time, she says that “Some of the best Indian institutions, such as the Tata Institute for
Fundamental Research, the Birla Institute of Technology and Science, and the Calico
Textile Museum, all owe their existence to the private business generosity of the post-
independence era”.
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 India was one of the first countries to create a space for collaboration Role of CBOs and NGOs in
between the government and NGOs to facilitate development. New types Driving CSR Initiatives
of NGOs appeared, notably the “welfare-oriented” NGOs in the 1960s
and “empowerment-oriented” NGOs in the 1970s. The emergence of both
groups is related to the socioeconomic and political context of India at
that time, including the professionalization of the sector, resulting in viable
employment opportunities for young professionals. The government also
began to see NGOs as implementers or service providers and supported
them through grants, as long as the NGOs in question were not too radical
[(Sen 1993), cited in (Arora & Puranik, 2004)]. Such a politically rooted
history of NGOs is deemed significant in understanding the transition of
corporate responsibility in the forms of liberal and stakeholder models:
wherein, in the former case, the onus of social responsibility is levied on
the shareholders and is proposed to be conducted privately; and in the latter
model (stakeholder model) companies respond to the needs of multiple
stakeholders including customers, employees and communities (Kumar
et al., 2001).
More recent literature that reviewed the model of responsibility being
practiced by Indian corporates reveals stakeholder approach to be the most
dominant approach to CSR today, (Arevalo & Aravind, 2011). This study
surveyed top-level managers of a sample of companies currently engaging
in a CSR initiative, representing a variety of industry sectors. It notes that
contemporary practice also draws from Gandhian values of stewardship
and notes lack of resources to spend on CSR activities is a major obstacle
to move CSR forward in India. The study concludes that, given India’s
mounting social problems, it is much more urgent for Indian firms to find
resources to devote to CSR than for firms in the West in order to address
these social issues. Praveen Raj and Vijaylaxmi (2014) remark that ‘sectoral
stereotypes, a fierce short-term business climate and a capacity deficient
NGO sector are obstacles to greater social impact that can be brought
through CSR’. A Study conducted by Narwal & Singh, (2013) maps the
performance of CSR in 500 top Indian companies and concludes:
●● Very few companies have a clearly defined CSR philosophy. Most
implement their CSR in an ad hoc manner, unconnected with their
business process.
●● Most companies spread their CSR funds thinly across many activities,
thus somewhere losing the purpose of undertaking that activity.
●● Generally speaking, most companies seem either unaware or don’t
monitor their company’s CSR.
However, as CSR practice is evolving in the country, NGOs are also
evolving with respect to streamlining their operations, work protocols and
structures. What is left is effective collaboration between these two entities
to bring greater impact.

3.3 CORPORATE - NGO PARTNERSHIP

You must have read in the previous units that Section 135 of the Companies
Act encourages collaboration wherein the legislation calls for companies
to harp on the expertise of not for profit organisations with a credible
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 Implementation Partnership work record of three years or more. Additionally, provisions in the Act
also encourage corporate- corporate collaboration which can help more
concentrated investment in a particular social issue yielding greater
impact. One such example is the outcome yielded through collaboration
between Bharti Airtel, Star Global Resources and IFFCO Kisan Sanchar
Limited (IKSL). In this inter-agency collaboration, they worked towards
empowering farmers by providing them essential information related to
agricultural practices through voice messages and also a helpline. Reported
outcomes suggest that about 13 lakh farmers benefited from this initiative
(ibid, 2014).
Generally speaking, for a corporate- NGO partnership to last, it is necessary
that it is mutually beneficial. According to the Corporate-NGO Partnerships
Barometer, a corporation’s primary motivation to enter into such a
partnership is to enhance its brand, reputation and credibility. NGOs enter
such partnerships largely to access funds. Long term stability and impact
are other motivations that surface both ways (Caneva, 2014). According
to the C&E Corporate- NGO Partnerships Barometer findings of 2019,
both NGOs and Corporations feel that such partnerships improve the
business understanding of social and environmental issues (C&E, 2019).
Businesses increasingly realise that the social change they aspire to bring
in the communities is achieved faster than they can achieve on their own. It
also brings in transformative changes in the company environment where
employees are more sensitive towards the communities they work in. The
2018 Deloitte Millennial Survey reaffirms this trend as it found that loyalty
of young employees towards their respective employers decreased in the
scenario of a business giving greater priority to the bottom line than to
bring about greater good (Mizar, 2019). At the same time, however, it is
important for a corporation to find the right partner to be able to generate
the intended impact. Wrong partner selection will yield a failed partnership,
consequentially leading to wastage of resources. Why do corporations
need to invest in due diligence of prospective NGO partners? How can a
corporation ensure that the NGO selection process is transparent and valid
enough to yield positive and constructive results in the longer run? Answers
to these questions lie in understanding the need for identifying the right
NGO and what are the validated rating scales or yardsticks that a corporation
can use to identify the right NGO partner.
Activity 1
Review one successful Corporate-NGO partnership and write about any
CSR programme being implemented by that partnership.
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 Check Your Progress - 1 Role of CBOs and NGOs in
Driving CSR Initiatives
Notes: a) Write your answers in about 50 words.
b) Check your answer with possible answers given at the end of
the unit.
1. What are the four models of social responsibility followed in India
and elsewhere?
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2. What is the difference between the stakeholder and the shareholder
model of social responsibility?
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3. Why is a corporate-NGO partnership important?
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3.4 IDENTIFYING THE RIGHT NGO

India has over three million NGOs operational throughout the country
(Anand, 2015). Such organisations can be found in sizes big and small,
working on an array of development issues the country is facing. Since the
past two decades, a slow and steady trend of corporate funding has emerged
for development programmes and activities run by such NGOs and even
partnering with them for sustained impact. This trend saw its escalation
especially after India became the first country to make CSR mandatory
through the amendment of the Companies Act, 2013. For-profit firms and
big corporate giants across the country make efforts to fund programmes
run by NGOs, or partner with them to design and implement new projects
for the development of the society they are a part of. With such a high
number of NGOs working at the grassroots, national and even global level,
corporates need to consistently research and investigate which NGO to
associate with and where to spend their money in order to get maximum
social impact and generate valuable (and measurable) outcomes.
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 Implementation Partnership Choosing the right NGO partner is critical to ensure that the partnership
yields positive social impact and brand positivity for the corporation. The
ratio of NGOs to people (one NGO for 600 people) outnumbers the ratio
of policemen to people (one policeman for 943 people). However, it is this
burgeoning number of NGOs that makes it difficult and more so critical for
a corporation to choose the right implementation partner. While there may
be several credible NGOs in the sector, choosing the right implementation
partner is important and should be based on the following parameters:
a) Credibility: the NGO should have a clear track record on reporting
and adhering to provisions laid out by the government. Financial
transparency is another aspect that adds to the credibility of the NGO.
The corporation should also harp on reviewing the feedback available
about the NGO and should be reflective of these characteristics.
b) Alignment with the Corporate’s CSR Vision: there may be several
NGOs that qualify the credibility dimension. However, they may
not necessarily be experts in the domain that the corporate wants to
invest into. A mismatch of the domain expertise can be harmful as the
project is likely to either fail or not produce the intended impacts.
c) Community Connect: there would be several NGOs that are
credible, transparent and also align with the required domain
expertise. However, they may lack the connect with communities.
Making inroads into communities is of paramount importance as
sustainability of any project has absolute reliance on the communities
taking ownership of the social change a project intends to bring about.
d) Corporate Partnership History: the corporation must obtain a
thorough knowhow of any past corporate partnership of the NGO.
This may not necessarily be present for every organisation but for the
ones that have a history must be reviewed. This gives a peek into how
the NGO managed the relationship and whether it was a lasting one
or didn’t see the light of the day after the initial engagement.
e) NGO Rating on Credible Rating Standards: given the huge number
of NGOs across the country and the growing concerns of corporations
to identify the credible ones for partnerships, the government and
few other agencies have developed rating standards for NGOs which
saves funders from the due diligence process. However, what rating
standard a corporation is using as a reference point for selection also
requires attention.
Activity 2
Visit a CSR project being implemented in partnership with an NGO in the
city of your residence. Discuss with the employees of the CSR department
of the corporate about the parameters considered by them in choosing the
partner NGO
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 In a qualitative analysis of interviews conducted with managers responsible Role of CBOs and NGOs in
for implementing CSR in PSUs in India, Subhasis Ray (2014), notes that Driving CSR Initiatives
managers consider working in social welfare department at PSUs as a non-
significant job. The managers complained of lack of guidelines in selection
of NGOs to partner with, in the absence of which they are forced to use the
existing NGOs inspite of their dubious records. The study also found out
that there was no single database in India, identifying the NGOs working
in the country, their background and specialty. Thereby PSUs were at a
loss to identify NGOs in the communities (Ray, 2014). Similar concerns
have surfaced from representatives of profit making corporations who find
selection of credible NGOs a daunting task. In this backdrop, efforts have
been made by private agencies as well as the government to develop rating
scales, conduct due diligence of NGOs and create databases of credible
NGOs.

3.5 RATING SCALES FOR NGOs

NGO rating scales or a database of credible NGOs can be a useful reference
point for corporations and government PSUs who want to implement CSR
through NGOs. A recent stride in this direction has been the setting up of
NGO Darpan by NITI Aayog, a portal that enables VOs/NGOs to enrol
centrally and facilitates creation of a repository of information about VOs/
NGOs in each sector and state of operation. The portal facilitates VOs/NGOs
to obtain a system generated Unique ID that has been made mandatory
to apply for grants under various schemes of Ministries/Departments/
Governments Bodies. However, the portal clarifies that the database only
enlists information that is self declared by the NGO and the portal does not
do any validation (NGO Darpan, 2019). Another initiative by the Union
Government in this regard has come from the Ministry of Corporate Affairs
(MCA). MCA has come out with a list of NGOS that it calls ‘sanitized’
NGOs – ‘free of any terrorist links or unwanted funds’ – that companies may
choose to partner with for implementing their CSR policy. MCA is listing
these NGOs through the Indian Institute of Corporate Affairs (IICA). The
vision for this exercise is to synergise partnerships between corporations
and NGOs (CAP India, 2015).
CII’s Centre of Excellence for Sustainable Development (CESD) has also
come up with an NGO assessment framework in response to most companies
question “Does the organisation have capacities and capabilities to deliver
my project?”. To respond to these two necessities of the companies, there
are four aspects covered under this framework. These are:
●● Human Resources
●● Projects
●● Risk Management
●● Stakeholder Engagement
Each of these aspects consists of questions. In all there are 12 questions.
This NGO assessment is based on guidance and not on scoring. Assessors
will offer guidance based on their assessment. The guidance will cover both
strength and gap areas of NGOs. The guidance will be specific to the extent
of guiding companies whether the NGO should be engaged or not. CESD
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 Implementation Partnership is available to help companies with on-demand service. Upon receiving
confirmation of assignment, CESD will send out the assessment form to
implementing agencies to be assessed. The filled form will be given to a
team of assessors for Level-1 assessment. Level-2 assessment or on-site
verification will be conditional to outcomes of Level-1. On-site verification
will seek to validate claims made by organisations in the form. Final outcome
will be presented to the company for their action (CII, 2017).
A couple of private institutions have also taken up this task that caters to
resolving the NGO selection issue by rating NGOs for their performance
across various indicators so as to define their credibility. This helps
corporates planning to build on their social responsibility to carefully
partner with NGOs they can trust, not only in terms of delivering the desired
output but also ensure transparency and accountability among stakeholders.
Credibility Alliance (CA) is one such example of an organisation that
provides accreditation to Voluntary Organisations (VOs). They set some
minimum and desirable norms that VOs should be following in order to
get the accreditation, which ensures the quality of the VO is maintained.
A periodic evaluation is conducted that helps in improving the credibility
of the NGOs. HR Policies, appointment letter provided to staff on joining,
salary levels along with gender break up, international travel details and
blood relation among board members are few of the requirements along
with legal documents like registration and FCRA certificate that are to be
submitted to the organisation. After reviewing these documents along with
a report submitted by an assessor who physically visits the organisation
to check its work, the accreditation is approved or rejected by the Central
Accreditation Committee. Their website currently lists around 683 VOs
under Desirable Norms, Minimum Norms and Basic Norms. These norms
look into the overall image of the organisation from its legal status, vision
and objectives to its governance structure, management and transparency.
Such accreditation helps in attracting financial and other forms of support
from prospective donors and helps increase the authenticity and reach of
such non-profit organisations.
Another such firm that claims to prepare India’s largest list of certified
and vetted NGOs is GuideStar India. They are involved in certifying
non-profit organisations primarily based on their transparency and public
accountability. After thorough due diligence by their experts, GuideStar
certifies the NGOs based on their level of compliance. As per the process
mentioned on their website, the certification ranges from GuideStar India
Platinum (Champion Level) to GuideStar India Gold (Advanced Level) and
needs to be renewed annually. The due diligence involves comprehensive
transparency, accountability and good governance practices followed
by the NGOs and exemplary level of such public disclosure of financial
and organisational details leads to the certification. Basic information
disclosures and verification of filing of annual income tax returns and
voluntary disclosure of the same in the public domain by NGOs also leads
to their certification of a Transparency key at the foundation level. Such
kind of certification is based almost entirely on the voluntary disclosure
of organisational details and it helps corporates choose a trustworthy and
honest NGO for a fruitful partnership.
One of India’s leading rating agency CRISIL also ventured into evaluating
NGOs, offering a comprehensive assessment of their profiles. Their
evaluation is much more holistic and focuses on a number of aspects other
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 than just transparency and accountability. The grading done by CRISIL Role of CBOs and NGOs in
looks into the governance structure, management and delivery capabilities, Driving CSR Initiatives
processes, funding profile and cost structure of the NGOs. Document
verification and in-depth analysis of the financial and performance data
helps CRISIL assign grades on the basis of their capacity to deliver. Other
important parameters such as the people driving the NGO, trainings for
field staff, grievance mechanism for beneficiaries and impact evaluation of
NGO’s programmes are thoroughly done before any grades are assigned.
CRISIL came up with five grades for capacity delivery - VO 1A to 5A, while
for financial proficiency, the grades are High, Moderate and Low. Offering
an unbiased assessment of the NGOs, CRISIL also provides customised
screening of such organisations on parameters that are predefined by funders
or corporate donors. Such assessments result in an unbiased and holistic
review of the NGO and help corporates make well informed decisions
regarding disbursement of funds and partnerships.
Private consulting firms have also responded to this need for database
management of NGOs. Tata Strategic Management Group is one such
consulting firm that has listed a project of creating and operating National
CSR Hub on its website. Tata Strategic Management Group has formulated
the strategy for creation and operation of a National CSR Hub that can
provide guidance and direction to PSEs (Public Sector Enterprises) for
carrying out more impactful activities on a larger scale. It conducted a
detailed study on CSR activities of the PSEs and the role a central entity
can assume. IT also studied CSR Hubs in other countries to draw learnings
which can be implemented in the Indian scenario. Various NGOs, PSEs
and United Nations bodies were also consulted during the process. Tata
Strategic defined the roles and activities of CSR Hub including research and
advocacy, managing implementation partners, capacity building of partners,
strategic direction setting for PSEs and monitoring and evaluation of their
activities against plan (TSMG, 2019).
Such accreditations and ratings not only help corporates in identifying
prospective organisations to partner with or fund, but it also proves to be a
great help for NGOs with their visibility and credibility in the development
sector. Organisations that follow low regulatory compliance and lack
credibility affect the donor confidence as well as the inflow of money. It is
widely considered that the IICA listing is expected to have more credibility
among corporations compared to the databases offered by private agencies.
Check Your Progress - 2
Notes: a) Write your answers in about 50 words.
b) Check your answer with possible answers given at the end of
the unit.
1. What guiding parameters should be kept in mind while selecting an
NGO for CSR partnership?
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 Implementation Partnership 2. What are sanitised NGOs and who has given this term and in what
context?
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3. Write about two important rating scales available for rating NGOs.
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3.6 SUCCESSFUL CASE STUDIES OF NGO-

CORPORATE PARTNERSHIP FOR CSR
While there are countless claims of NGOs doing good work with CSR
money, there is no means to verify the validity of impact. A study by
Bala et al, (2014) attempts to capture the differences in the CSR practice
of multinational companies (MNC), private Indian companies (PIC) and
public sector companies (PSCs). The findings conclude that PICs and
MNCs invest more in environment and natural resources protection issues
than social issues. PSCs contrastingly give equal importance to all issues.
MNCs focus more on community welfare and the other two focus more on
community development. Box 3.1 and 3.2 are brief case examples of an
NGO-Corporate CSR partnership where there is evidence of positive impact.
Box 3.1:  Glaxo Smith Kline – Save the Children
In 2013, the multinational pharmaceutical company GSK joined hands
with Save the Children organisation to help reduce the incidence of
preventable deaths among children under the age of five. Combining the
resources and scientific expertise of GSK with on-ground knowledge
and experience of Save the Children has shown some exceptional results
in the five years of its partnership. Their joint partnership led to some
ground-breaking results that focused on improving access to basic
healthcare, developing child friendly medicines, training and equipping
health workers and working towards stronger child health policies at a
local and global level. They also work towards strengthening healthcare
systems across countries and accelerating scientific innovations in global
public health.
IMPACT: The partnership has reached over 5 million people till 2018
which includes 2.8 million children under five years of age in 45 countries.
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 Role of CBOs and NGOs in
They have successfully immunized 97,600 children, treated diarrhoea and Driving CSR Initiatives
malaria of 187,000 children, as well as screened and treated malnutrition
of over a million children. Apart from this, 300,000 children have also
been helped during or after emergencies.
They have renewed their partnership for another 5 years in 2018. The case
is a perfect example of a strong corporate–NGO collaboration that was
able to harp on each other’s assets and expertise to deliver measurable
impacts at a global level.

Box 3.2:  Proctor & Gamble – Pratham Foundation

Proctor & Gamble (P&G) started their own CSR program in 2005 called
P&G Shiksha that worked towards providing holistic education to children
from underprivileged backgrounds. The firm joined hands with various
non-profits along the way to delve deeper into specific areas of early
child education, infrastructure development and improving educational
outcomes. One such partnership was with Pratham Foundation to work
on remedial learning through their Read India program, wherein Pratham
sets up 10-12-day learning camps for students based on their learning
level rather than their age or grade. Another programme they fund is on
early childhood education, focusing on building motor, cognitive, socio-
emotional, language and creative skills in children aged 3-5 years thereby
increasing their readiness for school.
IMPACT: The Read India Program reached out to more than 500
schools and 18,000 children in the states of Rajasthan, Chhattisgarh and
Maharashtra. Only 20% of the children in these schools were able to read
and write as per their curriculum level before the intervention, which
increased to 70% afterwards. A more than two fold increase was seen in
the percentage of children able to do basic arithmetic post intervention
as well. Similarly, the early childhood program has reached more than
1,60,000 children till date across the states of Bihar, Uttar Pradesh,
Rajasthan, Himachal Pradesh and Delhi. Around 85% of these children
in the intervention group were seen to have competent motor skills versus
42% of children in the control group.
Pratham and P&G started this partnership in 2005 and it is still going
strong. P&G was able to achieve such impact by partnering with like-
minded organisations that shared its values and mutual interest in education.
For an NGO-corporate partnership to yield results and make for a lasting
partnership, it is necessary that the corporate invests with the right objective
of bringing in social good and the NGO has the skills and capacity to
transform the objectives to reality. In the light of rating standards developed
by the government and private agencies alike, there is a lot of pressure
and expectations from NGOs to qualify these standards and feature on the
credible databases in order to receive CSR funding.

3.7 IMPORTANCE OF BEING A WELL RATED NGO

As we have discussed in the previous sections, building partnerships between
corporate partners and NGOs is marked with the challenge of the sheer
number of NGOs that function on multiple issues and carry different levels
of expertise (Rajeev & Kalagnanam, 2017). While there are several rating
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 Implementation Partnership scales and databases available, there are some essential tenets by virtue of
which a credible NGO can be identified. The set of guidelines released by
CRISIL to evaluate functioning of Indian NGOs based on performance and
financial proficiency can be largely considered to do an initial assessment of
an NGO partner. The guidelines further elaborate on each dimension to list
down the aspects to investigate before making the partner selection.
In Capacity Delivery mainly three things are focused –
1. Profile – means people driving the NGO, founders, trustees and such
other aspects.
2. Process – means how sound an NGO is in processes, training of field
staff, project implementation process, etc.
3. Program – Impact Analysis of Flagship program of NGO.
To Analyse Financial Proficiency, there has been rigorous procedure to
check –
1. Ability of NGOs to raise funds.
2. How well funds are utilized.
(Source: Mansuri, 2014).
In this era of competition, a well rated NGO is likely to be in the spotlight
of corporations for the purpose of furthering their CSR practice and brings
the following advantages to the gamut of CSR:
1. Makes CSR impactful
2. Brings sustainable social change
3. Establishes ideals for CSR partnerships
4. Promotes cross sector collaborations
Check Your Progress - 3
Notes: a) Write your answers in about 50 words.
b) Check your answer with possible answers given at the end of
the unit.
1. What are the dimensions that CRISIL highlights should be focused
upon while assessing NGO?
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2. How do ratings of NGOs help in the practice of CSR?
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 Role of CBOs and NGOs in
3.8 LET US SUM UP Driving CSR Initiatives
India has witnessed an enormous proliferation of NGOs and CBOs in recent
years especially after the CSR provision in the Companies Act of 2013 bound
all companies earning a profit of more than 5cr to invest 2 per cent of their
net profits on issues of social development. NGOs have taken centre stage
in the implementation of CSR as corporations are likely to fall short of the
skills required to design and execute projects addressing social issues and the
‘connect’ with communities requiring such interventions. The emergence of
NGOs in the CSR space is however ridden with issues of trust, accountability
and impact. The profit driven perspective of corporations adds to the woes
as they expect immediate returns on investments which are likely to not
appear in development projects. The burgeoning population of NGOs is
another dimension which has led several government and private agencies
to come up with rating scales and standards to help create databases that can
be used by corporations to select NGO partners. These rating scales largely
harp on dimensions of legal identity, management, transparency, financial
capability, organisational structure, operations, systems and processes,
human resources and risk management. Being a well rated NGO is important
to be able to further CSR practice in collaboration with corporations.

3.9 KEYWORDS
Non-Governmental Organizations (NGOs): An agency that works
independent of the government and is largely constituted to address a social
issue.
Community Based Organizations (CBOs): A public or private non-profit
organisation that is representative of a community group and is constituted
with the primary objective of addressing social issues of a community group.
Credibility: The aspect of being trusted or believed by others.
Transparency: The aspect of being open, accessible and accountable.
Rating: A classification or ranking of something based on a comparative
assessment.

3.10 BIBLIOGRAPHY AND SELECTED READINGS

Arevalo, J. A., & Aravind, D. (2011). Corporate social responsibility
practices in India: Approach, drivers, and barriers. Corporate Governance,
11(4), 399–414. https://doi.org/10.1108/14720701111159244
Anand, U. (2015). India has 31 lakh NGOs, more than double the number
of schools. Indian Express. Accessed on February 12, 2020. Available at:
https://indianexpress.com/article/india/india-others/india-has-31-lakh-
ngos-twice-the-number-of-schools-almost-twice-number-of-policemen/
Arora, B., & Puranik, R. (2004). A review of corporate social responsibility
in India. Development, 47(3), 93–100. https://doi.org/10.1057/palgrave.
development.1100057
Balasubramanian, N., David, K., & Fran, S. (2005). Emerging Opportunities
or Traditions Reinforced ? The Journal of Corporate Citizenship, (17),
79–92.
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 Implementation Partnership Bala, M. & Singh, N. (2014). Empirical Study of the Components of CSR
Practices in India: A Comparison of Private, Multinational and Public
Sector Companies. Pacific
Business Review International, Volume 7, Issue 1, July 2014, pp. 61-72.
Caneva, L. (2014). Corporate- NGO Partnerships Barometer. Retreived from
https://probonoaustralia.com.au/news/2014/09/corporate-ngo-partnerships-
barometer/
CAP India (2015). Corporate India has Applied Only A Quarter Of The
Estimated CSR Budget. Retrieved from https://capindia.in/corporate-india-
has-applied-only/
C&E (2019). C&E Corporate- NGO Partnerships Barometer 2019. Retreived
from https://www.candeadvisory.com/barometer
CII (2017). NGO Assessment Framework. Retreived from https://
sustainabledevelopment.in/wp-content/uploads/2020/08/CSR-NGO-
Assessment.pdf
GuideStar India Certification Brochure. Retrieved from https://
guidestarindia.org/SiteImages/Certifications/GSICertificationBrochure.
pdf.
Kumar, R., Murphy, D. F., & Balsari, V. (2001). Altered Images. The 2001
state of corporate responsibility in India poll.
Mansuri, J. (2014). Credit Rating of NGOs by CRISIL. Retrieved from
https://kcjmngo.com/credit-rating-of-ngo-crisil/
Meaning and Process of Accreditation. Retrieved from http://www.
credibilityalliance.org/accreditation-meaning-process.html.
Mizar, S. P. (2019). Successful corporate- NGO Partnerships. Retreived
from https://www.fm-magazine.com/issues/2019/apr/successful-corporate-
ngo-partnerships.html
Narwal, M., & Singh, R. (2013). Corporate social responsibility practices
in India: A comparative study of MNCs and Indian companies. Social
Responsibility Journal, 9(3), 465–478. https://doi.org/10.1108/SRJ-11-
2011-0100
NGO Darpan (2019). Retrieved from https://ngodarpan.gov.in.
Praveenraj, D.W. & Vijayalakshmi, R. (2014). Role of NGOs in CSR.
International Research Journal of Business Management, Volume No- VII,
December- 2014, Issue-12, pp. 8-14.
Rajeev, N. & Kalagnanam, S. (2017). The Difficulties In Doing Good: NGO
Preparedness for Implementing Mandatory Corporate Social Responsibility
Projects in India.
Ray, S. (2014). Linking public sector Corporate Social Responsibility
with sustainable development: lessons from India. RAM. Revista de
Administração Mackenzie, 14(6), 112–131. https://doi.org/10.1590/s1678-
69712013000600006
Sundar, P. (2000). Beyond business : from merchant charity to corporate
citizenship : Indian business philanthropy through the ages. New Delhi:
Tata McGraw-Hill Pub. Co.
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 TSMG (2019). (https://www.tsmg.com/case-study/social-sector/869- Role of CBOs and NGOs in
developing-a-national-csr-hub-to-assist-pses-in-csr-activities.html Driving CSR Initiatives
Accessed on 27.2.2019).
Voluntary Organisation Grading. Retrieved from https://www.crisil.com/
en/home/our-businesses/sme-solutions/corporate-responsibility/voluntary-
organisation.html#.

3.11 CHECK YOUR PROGRESS - POSSIBLE ANSWERS

Check Your Progress - 1
Answer 1: The four models of social responsibility that are largely followed
in India and elsewhere are:
1. The ethical (Gandhian) model
2. The statist (Nehruvian) model.
3. The liberal (Friedman) model.
4. The stakeholder (Freeman) model
In all these models of social responsibility, there are several non business
actors such as NGOs which have played an important role.
Answer 2: In the shareholder model, the onus of social responsibility is
levied on the shareholders and is proposed to be conducted privately;
and in the stakeholder model, companies respond to the needs of multiple
stakeholders including customers, employees and communities.
Answer 3: Corporate- NGO partnership is important as both stakeholders
feel that such partnerships improve the business understanding of social
and environmental issues. Businesses increasingly realise that the social
change they aspire to bring in the communities is achieved faster than they
can achieve on their own. It also brings in transformative changes in the
company environment where employees are more sensitive towards the
communities they work in.
Check Your Progress - 2
Answer 1: Important parameters to be kept in mind while selecting an
NGO for a CSR partnership are: credibility, alignment with the corporate’s
CSR vision, community connect, partnership history with corporates, NGO
rating on credible rating standards. Alongside, financial transparency,
human resources, organisational structure should also be considered.
Answer 2: Ministry of Corporate Affairs has come out with a list of NGOs
that it calls ‘sanitized’ NGOs – ‘free of any terrorist links or unwanted funds’
– that companies may choose to partner with for implementing their CSR
policy. MCA is listing these NGOs through the Indian Institute of Corporate
Affairs (IICA).
Answer 3: Credibility Alliance (CA) provides accreditation to Voluntary
Organizations (VO). They set some minimum and desirable norms that VOs
should be following in order to get the accreditation, which ensures the
quality of the VO is maintained. A periodic evaluation is conducted that
helps in improving the credibility of the NGOs. HR Policies, appointment
letter provided to staff on joining, salary levels along with gender break up,
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 Implementation Partnership international travel details and blood relation among board members are few
of the requirements along with legal documents like registration and FCRA
certificate that are to be submitted to the organisation. After reviewing these
documents along with a report submitted by an assessor who physically
visits the organisation to check its work, the accreditation is approved or
rejected by the Central Accreditation Committee. One of India’s leading
rating agency CRISIL also ventured into evaluating NGOs, offering a
comprehensive assessment of their profiles. Their evaluation is much more
holistic and focuses on a number of aspects other than just transparency
and accountability. The grading done by CRISIL looks with detail into the
governance structure, management and delivery capabilities, processes,
funding profile and cost structure of the NGOs. Document verification and
in depth analysis of the financial and performance data helps CRISIL assign
grades on the basis of their capacity to deliver. Other important parameters
such as the people driving the NGO, trainings for field staff, grievance
mechanism for beneficiaries and impact evaluation of NGO’s programmes
are thoroughly done before any grades are assigned.
Check Your Progress - 3
Answer 1: CRISIL divides the rating proficiency guidelines into two parts:
capacity delivery and financial proficiency. In capacity delivery, it suggests
to focus on the following:
●● Profile – means people driving the NGO, founders, trustees and such
other aspects
●● Process – means how sound an NGO is in processes, training of field
staff, project implementation process, etc.
●● Program – Impact Analysis of Flagship program of NGO.
To analyse financial proficiency, the following parameters have been
highlighted:
●● Ability of NGOs to raise funds.
●● How well funds are utilized.
Answer 2: Selecting a well rated NGO can help
●● Make CSR more impactful
●● Bring sustainable social change
●● Establish ideals for CSR partnerships
●● Promote cross sector collaborations

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