Ever since the Indian Companies Act made Corporate Social Responsibility (CSR) spend mandatory [at 2% of average of net profits of the preceding three (3) years] there has been a significant increase in the number of social entrepreneurs and development agencies in India, many of whom have set up Non-Government Organizations (NGOs) to leverage this opportunity. Currently there are about 31 lakh NGOs in the country i.e. one (1) NGO for about 400 people.

Therefore the Corporates in India ‘appear’ to have a ‘problem of plenty’ when it comes to selecting a suitable implementation partner/NGO for their CSR programs. However, given the many tall claims made by such NGOs (most of which are unverified), many Corporates end up making a wrong choice, leading to overall skepticism with regard to social enterprises. So, the question is how should a Company identify the most effective and suitable implementation partner?

On the face of it there are certain discernable and non-discernable aspects of successful social enterprises, it requires a comprehensive due diligence and deep understanding of how to identify such traits.

 

  1. Discernable Traits: These are the ones which can be identified through a detailed due diligence process and by asking the right set of questions to potential players.
  • Execution Excellence: This includes a culture of project management which is strongly supported by task orientation. Most people in an execution driven environment carry ‘to do lists’, would have a strong mechanism of reviewing and revising the project plan from periodically (in order to stay on course to the stated milestones). While the escalation process would be well laid out, the on-ground teams would also be empowered to improvise and take quick on field decisions.
  • Compliance Processes: Given the nature of the industry in which Social Enterprises operate, receiving timely regulatory and legal approvals supported by a strong internal auditing framework is mandatory. While these processes are generally not publicized to the outside world, to a seasoned eye it wouldn’t take long to figure out how robust is a given compliance framework of a social enterprise?
  • Developing Ecosystem: Given the small size and nascence of the Social Sector, it does not have a robust, reliable or a large ecosystem (note that ecosystem here refers to the supporting infrastructure comprising of suppliers, vendors and partners to offer various non-core and sundry services to a social enterprise). Therefore, one would observe that most successful social enterprises spend and devote considerable amount of time, effort and money in developing this network (of partners, vendors and suppliers) across their entire value chain; this can also be easily discernable.

 

  1. Non-discernable Traits: These are subtle cultural and organizational wide behaviours demonstrated by the Company almost in a ubiquitous fashion.
  • Laser Focus: Successful social enterprises pursue their goal with an unflinching single-minded focus. Their employees carry their vision and mission statement like a badge of honour (there is a sense of extreme pride in what they do), they have the fortitude to walk away from any lucrative partnership or business opportunity if it does not fall within their value or belief system. In short strong social enterprises not only like what they do but they also excel and improve in that area continuously.
  • Celebrating Failures: It is impossible to be successful perpetually and not fail in the journey (multiple times) to a certain goal, however very few organizations have the gumption to first admit (let alone celebrate) their failures and then learn from it. However, successful social enterprises know that in their quest to chase difficult and audacious targets they will falter and make mistakes (along the way) therefore they create an organizational environment where people are encouraged to take risks, celebrate failures and learn from it, consequently the organization builds on its knowledge of failures and uses that to create robust fail safe processes and models.

 

While every Company would have to figure out what is the concoction that works for it for selecting a suitable implementation partner, the points discussed above are not from any text book or secondary research but first hand experiences of sector practitioners. The journey to developing a reliable social enterprise is a difficult one and regardless of the selection process or the traits listed above, only a handful of enterprises will acquire a coveted stature, so it would be the proverbial search for a ‘needle in a haystack’.

 

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