The CSR landscape in India is evolving rapidly, various social programs undertaken by Corporates have expanded both in impact as well as geographies. Since it is important that such social projects are implemented effectively and sustainably, many companies are increasingly choosing to execute CSR programs through (external) implementation agencies to ensure better and more effective management. While the preferred partners are mostly NGOs 1 , the question is do they ‘always’ provide the most effective and sustainable solution?
Partnership with an NGO is attractive for corporates because of income tax exemption under the 80G certification. Apart from this, NGOs possess better area specific knowledge including the understanding of the social and environmental issues and thus offer a more comprehensive and responsive approach to address such social programs; they also act as a ‘bridge’ between the corporate and local stakeholders.
While working with NGOs undoubtedly has its benefits, many NGOs have limited project management and execution skills. Also many NGOs do not adopt a self-sustainable approach i.e. their projects depend on external funding. Besides India has a significant number of registered NGOs i.e. about 31 lakh 2 many of which are regional (are limited to a certain territory) and not very credible.
All of this has resulted in a major gap wherein Corporates have limited options to partner with a credible execution cum sustainability partner in the social sector. This gap is being addressed by the budding ‘Social Entrepreneurs’ in the social segment, the social entrepreneurs run an enterprise i.e. a for profit business that provides products and services to the ‘bottom of the pyramid’ customer at affordable prices.
The key difference between a social enterprise and an NGO is sustainability and scalability. A social enterprise (like any other company) ensures that operations are sustainable financially, operationally, socially, environmentally and institutionally while NGOs generally try to confine to (and excel in) doing social good.
The social enterprise adopts a more ‘business-like’ approach to operations, projects and growth through professional and competent management; also such companies have strong execution focus. NGOs on the other hand generally focus far more on impact (regardless of its scale) instead of execution.
In summary, there are certain practices and processes that social enterprises can learn and imbibe from NGOs and vice versa, therefore a collaborative approach between these two categories of institutions maybe the preferred way to implement a successful CSR program; more so because they complement each other. Overtime i.e. in the long term there is a possibility that these lines (between NGOs and Social Enterprises) may become blurred and some of these institutions may acquire the hybrid traits of each other. However, in the short term the corporates may have to be prudent and pragmatic in choosing their implementation partners without being biased by conventional blinkers (of working only with NGOs).