How can companies plan for CSR impact assessment in India as per the CSR Rules?

The Ministry of Corporate Affairs, Govt. of India issued the Amended CSR Rules in the beginning of the year 2021 and it brought in many changes in terms of CSR fund usage, CSR project implementation and CSR projects’ impact assessment.

If you are a company in India and the mandatory CSR provision is applicable to you, then you must be thinking about ‘CSR impact assessment’ for your CSR projects, CSR activities and/or CSR programs (applicable to certain set of companies).

Let’s first understand: What does the CSR Amendments 2021 say about the impact assessment?

The CSR amendment has thrown a focus on the need for companies to define and measure the impact of their larger CSR programs. Here are the most important points you must know:

  • Impact assessment is only mandatory for companies with the mandatory CSR fund of INR 10 crore, and specific CSR project or program with INR 1 Crore or above.
  • Companies can set aside a maximum of 5% of the CSR spent or INR 50 Lakh, whichever is lesser, for the impact assessment.
  • Impact assessment needs to be done after the completion of one year since the end of the project. For example, if your CSR project was completed in April 2020, your impact assessment process for the same should begin in May 2021.
  • The assessment report which will be produced at the end of the process will be annexed to the company’s annual report on CSR.
  • The impact assessments must be undertaken by an independent agency (third party agency).

The updated CSR mandate clearly outlines the onus of measuring impact of CSR projects on companies. While there are many advantages of getting impact assessment done for your CSR activities/programs, many companies struggle to define the objectives of impact assessment and set the processes right from the beginning to leverage the impact assessment for better and meaningful use of the CSR fund.

Advantages of CSR Impact Assessment for Companies:

CSR impact assessment by a 3rd party, having domain and program expertise can add a lot of value for the organization, a few of the pointers are listed below:

  • Understand the output, outcome and impact of the CSR program from a neutral lens
  • Assess the effectiveness of the program in-line with the set objectives
  • Understand the delivery of the program by the implementation partner from all the stakeholders and find out the right status
  • In large program, with multiple activities, you can gauge which component worked better and which component could have been better planned and delivered
  • An exhaustive assessment will help you to find and define future course of the program with critical inputs by the assessment agency
  • A few good agencies deliver benchmarking of the CSR project which helps you to understand how does you CSR program perform when compared to similar program by other organisations, your peers in similar demographic conditions and at the same scale
  • Additionally, if you get the Social Return on Investment (SROI) done for your projects, you will get a good understanding of how much social return each of your rupee generating

Planning for the CSR Impact Assessment

Now as a company, if you are planning for CSR impact assessment of your CSR activities or will be requiring this in coming years, ideally, you should plan for the impact assessment along with the CSR project design itself.

Here we are enlisting a few key pointers that you can follow at the each stage of your CSR project design and execution:

  • CSR Need Assessment: (Pre-Project) If you are entering into a new geography and want to fund CSR projects that has maximum social return on investment (SROI) and better value for your communities, plan for community need assessment to get the clear data and insights on priorities in short term, mid term and long term to respond through CSR interventions.
  • Baseline Before the Beginning of the Intervention: (Pre-Project) (Pre-project) Once you have identified a priority area for project curation, plan for the baseline data collection so that you are able to compare the baseline data with your project outcome and impact data post completion of the project. In fact, baseline data will also be useful in concurrent monitoring and periodic review of the project. Ideally, baseline studies should be done through an independent agency.
  • Project Design and the Theory of Change: (Pre-Project) (Pre-project) When you are finalising your CSR project design with the implementation partner, please include the Theory of Change in the detailed proposal. The Theory of Change will help you to clearly outline the inputs, output, key performance indicators, outcome and impacts of the project. The more detailed the Theory of Change is, the better it is to monitor and measure impacts of the program.
  • Essential Components of the CSR Project Design: (Pre-Project) The nature of CSR project design will differ project to project, but there are a few essential components that should be a part of your CSR project design document: Project Objectives, Key Performance Indicators, Milestones (at least quarterly milestones), Roles and Responsibilities of different parties, Key stakeholders, assumptions and dependencies of the project outcome.
  • Project Database Management: (During Project) From project monitoring and impact assessment perspective, the robust data of project beneficiaries, intervention done with each type of beneficiaries along with any assets created during the program.
  • Periodic Review and Progress Report: (During Project) Make periodic review (at least six monthly) and quarterly progress report a part of deliverable from the implementation partner. These documents will help in impact assessment
  • Full Project Report: (Post-Project) Annual project report with all the components of the Theory of Change, documentation and analysis of intervention should be a part of the project report

Essential Components of the CSR Impact Assessment

While there are multiple frameworks of CSR impact assessment, the basics and essentials remain the same for CSR impact assessment design. Here are a few of the essentials that CSRBOX delivers under its CSR impact assessment framework:

  • Impact assessment using five pillar frameworks of IRECS: Inclusiveness, Relevance, Expectation, Convergence, Service Delivery
  • Robust sampling design along with pre-post evaluation
  • Inclusion of COVID19 impacts on project deliverable by sensitivity analysis and scenario-mapping
  • Stakeholder-wise impact analysis
  • Critical analysis of the project in terms of need, approach, deliverables etc.
  • Recommendations to improvise the program in future
  • Benchmarking of the program with similar program in other areas
  • Social Return on Investment (SROI)-mapping
  • Executive summary deck for the Board-level presentation

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