The notion that philanthropy or charity helps humanity is found to have gone ineffective without making significant larger impacts on the reduction or improvement in any of the human development indicators. The sustainable human development cannot be achieved through populist welfare programs alone. In the context of corporate social responsibility, CSR initiatives being executed by a majority of the companies in India are mainly charity and welfare centric. Although companies have been spending on CSR, barring creating social infrastructure, the welfare or charity model of CSR has miserably failed in making deeper qualitative impacts on human development indicators. There are not enough evidences available which indicate CSR programs by companies have supplemented the government efforts in achieving the country’s development goals in India. While taking cognizance of it, the new Companies Act of India has prescribed a CSR framework in which at least three board members including an independent member will constitute a CSR committee which will be responsible for developing a CSR policy and action plans. CSR rules specify the indicative areas of social interventions around which companies are guided to design & develop ‘project-based’ CSR policy and action plan. The ‘Act’ rules out the charity or donations based CSR activities. The new ‘Act’ objectively wants CSR projects to deliver the measurable ‘outputs’.
Theory of underlying effects:
But, the success and failure of human development should not be assessed from the outputs of the project alone. There are some ‘underlying effects’ of every social action or project. Such underlying effects are actually outcomes which are different from the outputs. In the context of human development, outcomes determine the impact. Therefore, it’s very important for the human development strategists/planners to understand and anticipate underlying effects of every project while doing the planning exercise, and then to decide whether or not the project/program is worth doing. The following case study, although old, and its analysis is presented to make companies understand the criticality and importance of the underlying effects in the context of CSR in the present.
The Tata experience:
Under its social development program, Tata Steel had been trying to reduce the malnourishment among the tribal children in villages around its mines in Orissa. To do so, the social arm of the Company, Tata steel Rural Development Society (TSRDS) was running a nutrition program under which it was distributing sprouted Chana (Black gram), milk and jaggery to children once a week in the villages there. What I witnessed during my field visit under the induction program was the birth of my theory of underlying effects.
The moment the vehicle of TSRDS which was carrying food material entered a village, children who had been waiting for hours simply ran with ‘Katora’ (aluminum bowl) to the vehicle. More than fifty children apparently below the age of 12 yrs finally stood in a queue which would always follow the initial quarrels among children for standing in the front. The fight for standing ahead in the line would get sorted out in the order of mightier to the weak, and boys to girls. The entire process would be witnessed by their parents and also by their neighbours. Mothers, too, holding infants in their laps would approach in the last for the same. Children would finally have a social feast; a scene that could look great and satisfying to many who believe in philanthropy/charity. But, to me, it was thought provoking.
The flaws: unnoticed underlying effects
What goes behind the story? The ‘intent’ of the organization was ‘good’. The ’cause’ i.e. reduction in malnourishment was noble. The ‘art of giving’ was appealing. Then, what was wrong? The answer: the program design, the approach, the execution and most importantly the underlying effects of the project were found to have gone wrong. Why? Because, firstly, malnourishment among children, between 1-3 yrs and 4-6 yrs who need 1300 and 1800 Calories intake per day respectively, cannot be reduced by supplementing with one meal a week-such a model is absolutely flawed. Secondly but very importantly, such a model of philanthropy, as a consequence, deepens people’s belief that they are poor, dependent and have to remain dependent on external assistance. Thirdly, it’s instilling the ‘psyche of dependency’ in the tender minds of children, the future of tomorrow. In fact, self-respect and dignity of people are always compromised.
The right approach is critical to human development. The nutrition project therefore had failed to recognize those underlying effects. Although the ‘art of giving’ was very strong and appealing, the ‘science of giving’ in terms of knowing the consequences and impact was missing. When presented to the management of Tata Steel, who took cognizance of the stated underlying effects, the project was stopped immediately.
One may critically look at the logic of the underlying effects for getting a program stopped which was feeding poor tribal children once a week, at the least. One may ask if it was wrong then what would be the right solution(s) to do in such conditions which could be sustainable. The answer lies in a popular adage, ‘Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime’. The right solution to deal with the problems of malnourishment goes into the education of people about the availability and nutritional richness of local food resources they have around. They simply need to learn and use them. But, changing their economic status is a more sustainable solution. Therefore, addressing the root cause problems of poverty is the critical solution.
THE SCIENCE OF GIVING: AN EMERGED LESSON
The major lesson emerged from the story that CSR was all about the ‘science of giving’. Traditionally and very popularly, CSR for human development has always been perceived as ‘art of giving’; it has always remained attached to the large hearts of the ‘Givers’ community. Givers community has been making generous donations or doing philanthropy with their ‘perceived needs’ for the communities without making considerations whether those needs are ‘felt needs’ and what would ‘outcomes’ be, if executed. Perhaps, this is the reason why the corporate philanthropy executed under CSR failed to make the desired positive and sustainable impacts; rather, sometimes consequences of programs have shown some ‘adverse impact’ on the ‘people’.
The art and science of giving is needed for sustainable human development. ‘CSR Committees’ of companies are therefore required to be judicious while planning their CSR. ‘The Committees’ are suggested to fill up the position of an ‘independent director’ by inducting a senior person with development background who will bring along the critical knowledge. They further need to plan it in consultation with development experts – internal or external. Companies own CSR professionals have greater role in helping the CSR committee with the preparation of bottom-up action plans. But, above all, CSR Committee has to remain open to going against its emotional inclination for the ‘art of giving’ by giving significance to the ‘science of giving’.