Building effective and efficient CSR

The corporate social responsibility law that came into force in April 2014 mandates companies subject to the provisions of the Act to invest 2% of their net profit in CSR projects. The focus for corporates who see the law more as “compliance” has been on project “deliverables” than measuring social impact.

While CSR projects have defined aims, they are often planned and measured only in terms of their budgets. But financial measurement alone is a poor indicator of the overall return of the company’s resources. To support a strategic shift towards impactful results, organizations need a strong and coherent monitoring and evaluation (M&E) framework that is simple and user-friendly and provides information to project managers and company management alike to improve efficiency and effectiveness of CSR programmes. Having a robust M&E design integrated into the programme also provides a company with a better means of seeking feedback from stakeholders, improving the service delivery systems, planning and optimizing resource allocation and most importantly demonstrate ground-level impact.

It’s critical for programme managers to understand the difference between outputs and outcomes. An output is a result of a set of activities conducted, while an outcome is the ideally desired state of the output that could eventually lead to impact. For e.g., let’s say that the expected impact of a CSR programme is increased coverage of primary education in a certain geography. The company is hoping for this impact through building better school infrastructure and providing teacher training. However, if the outcome of students attending schools regularly and clearing their exams on time is not achieved, the expected impact of ensuring primary education cannot be achieved (or measured).

And how should a company go about it? A logic model could be used to build the M&E framework. It is a credible tool used by funders, managers and evaluators of social programmes worldwide to evaluate a programme’s effectiveness. Logic models are usually a graphical depiction of the logical relationships between the resources, activities, outputs and outcomes of a programme leading to measurable impact. The framework also provides for indicators at each stage measuring which implementers can gauge the programme’s course and quality.

Ideally, an M&E process needs to be developed right at the beginning and incorporated in the overall implementation plan. However, even for programmes where implementation has been initiated, the M&E framework can be worked upon and integrated. This may call for a minor (or major) change in the overall programme design. Also, evaluations do not need to be carried out by a third party always. The most efficient and effective programmes are those where the programme managers collect data at regular intervals to analyse based on the M&E framework.

Different indicators demand different frequencies of measurement. Typically, skill outcomes, awareness building results, etc. can be measured in the short term (monthly, quarterly, etc.); action-based outcomes like policy change, behaviour changes need to be evaluated in the long-term window. Impact indicators necessarily have a long measuring cycle. For example, an eventual change in environmental landscape or socioeconomic conditions can only be confirmed over a long period of time. When required, the results can be confirmed by an external agency.

The implementation partners have to be involved completely in the M&E process since it has a bearing on the programme design and also how they allocate resources and plan activities. They have the best understanding of grassroots realities and should be primarily responsible for data collection.

Once the M&E framework, including performance indicators, are signed off with the implementation partners, they should ideally support the monitoring and evaluation process by creating simple tools and processes for data collection and analysis and set up a process for two-way feedback. One key thing: there is no set formula for determining the budget for building an M&E framework. However, an industry standard is that between 3% and 10% of the CSR programme’s budget be allocated to M&E.

Unless companies bring in the rigour of monitoring and evaluation into their CSR programmes, they can neither ensure sustainability of their programmes nor can they draw linkages between their programme and any real social change on ground. 

Meena Vaidyanathan is the founder-director of niiti consulting, a company that provides solutions for scalable social impact.