In CSR, the fundamental aspect is ‘giving back’ to society, however what remains to be decided is the scope and reach of this social responsibility, whether it should apply merely to one’s ‘backyard’ and/or employees or should it endeavor to resolve the many systemic ills plaguing society?

In line with the view that CSR is borne out of the fundamental need to return the value of the resources and services provided by the communities in the vicinity of a business unit, many industries, specifically manufacturing units, breweries, cement and tobacco companies opt for CSR projects in the immediate neighbourhood of their units. It may be argued that this is because of the need for such units to create good will around the setup, to ‘make up’ for the adversity caused in the immediate environment and their dependence on communities for a consistent supply of labour giving the impression of a modicum of self-interest in the exercise. While this is perfectly in tune with the role of creating ‘shared value’ for its shareholders as well for society, it is increasingly being felt that CSR needs to have much wider connotations; it needs to be driven by social conviction and make a significant and sustainable difference to society rather than be what may be seen as a ‘cosmetic’ exercise.

Undoubtedly, what is interpreted as ‘backyard philanthropy’, has its points, it leads to the development of under-developed regions, allows greater degree of focus due to scale and offers better control and monitoring because of proximity. Indeed there is a view that businesses must be responsible for ‘backyard’ communities first, this holds true especially for SMEs or localized businesses that may face the issues of poor reach, scalability and replicability. ‘Within the fence’ CSR can also be a starting point for larger (national level) corporates that contribute meaningfully to nearby communities and then scale up, as in the case of Bharat Petroleum’s flagship BOOND, a water conservation project which began with four (4) villages but eventually caters to 140 villages across six (6) states.

While there are instances of successful CSR activities for neighbouring communities the burning question is does it not restrict the scope and vision for CSR, especially in countries like India that are afflicted with multiple social ills related to poverty, illiteracy, health, unemployment, water stress? Should not these systemic problems be addressed as a whole rather than being taken up on a piecemeal basis?

Apart from territorial constriction, some CSR exercises catering to proximate communities or employees suffer from diminishing marginal returns over a period of time as they serve specific areas and specific needs. Moreover, the presence of more than one (1) corporate in a particular (resource rich) belt will lead to over concentration on a single region while other underdeveloped areas remain deprived. Other than this, backyard communities are also vulnerable to the risk of a business unit moving away from a region or shutting down.

A CSR activity or the idea of ‘giving back’ to society achieves limited purpose without first determining whether it has overall significant and long-lasting impact on society and there is a call for more robust and strategically designed CSR initiatives which have real ‘meat’.

It is true that this strategic approach of addressing inherent ills may not reveal immediate impact but it creates an important solution to a social or environmental problem while at the same time promising long-term gains by significantly changing the overall business environment.

It is encouraging that the CSR trend in India over the past few years has evolved and many corporates are focusing on strategic CSR initiatives that contribute toward nation building. Gradually, companies are moving towards need-based initiatives aligned with the social development goals or national priorities such as health, water, education, livelihoods and natural resource management.

Having said that, it is not as if the two (2) domains are mutually exclusive, indeed larger and more matured CSR organizations, cater to both ends of the spectrum (target audience and needy mass) by selecting projects that are varied and suited to the requisite audience.  They opt for a mix of backyard option where they have their setup and also cater to places where there are genuine concerns.