While the full form of CSR stands for Corporate Social Responsibility, it can come in many different forms, including philanthropy, volunteering, ethical business practices, environmental sustainability, and social initiatives. CSR involves corporate companies going beyond their traditional business objectives of profit-making and actively engaging in activities that benefit society, such as reducing their carbon footprint, supporting charitable causes, or implementing ethical labour practices. While CSR involvement in the sports sector is officially recognised by the government of India, the contribution towards the sector from companies has been very minimalist over the years. In this article, we are going to take a look at how CSR has evolved in the country, its contribution towards sports sector development, why more companies need to come forward to contribute, and how CSR can make a difference in India’s Sports for Development (S4D) movement.
History of CSR in India
Corporate Social Responsibility in India has a long history that dates back to the early 20th century. In 1948, the Indian Companies Act was enacted, which required companies to disclose their profits and the amount of money they had spent on CSR activities. However, it was not until the 1990s that CSR began to gain widespread attention in India.
In 2013, the Indian government passed the Companies Act, which made it mandatory for companies having a net worth of ₹500 crore or more, a turnover of ₹1000 crore or more, or a net profit of ₹5 crores or more, to spend at least 2% of their average net profits over the previous three years on CSR activities. This marked a significant milestone in the history of CSR in India, as it made CSR spending a legal requirement for companies.
Since then, CSR has become an integral part of the business landscape in India. Companies across sectors are now investing in CSR initiatives, including education, healthcare, poverty alleviation, environmental sustainability, sports and community development.
Overall, the history of CSR in India has been marked by a gradual evolution, with a growing recognition of the role of businesses in creating positive social and environmental impact.
CSR in sports
The Indian Companies Act 2013 includes “training to promote rural sports, nationally recognised sports, Paralympic sports and Olympic sports” as activities that can be included by companies in their CSR policies. In 2016, the obligations under CSR for sports were expanded to include “construction, renovation, maintenance of stadiums, gymnasiums and sports science support including rehabilitation centers” as permissible CSR activities.
The total CSR spend towards sports for FY 2020-21 was 249.49 Cr, with contributions from 583 companies with the state of Karnataka being the largest contributor. The amount is significantly less when compared to the overall CSR spending of 25714.65 Cr, which is not even 1%!
Let’s take a look at the trend of the last 5 years' available data on CSR spendings by corporates -
Let’s take a look at some of the major contributors towards sports CSR in the country -
It's worth noting that the COVID-19 pandemic has had a significant impact on CSR spending in India in general, with some companies redirecting their CSR funds towards pandemic relief efforts. It remains to be seen how this has affected CSR spending in sports in India in 2021-22.
How can CSR help the development or promotion of sports in India?
CSR can play an important role in developing and promoting sports in India. Here are a few ways in which CSR can help:
Infrastructure Development: Many companies can contribute towards the development of sports infrastructure in India by building new stadiums, sports complexes, and training centers. These facilities can help provide better training opportunities to athletes and also attract more sporting events to the country.
Sponsorship and Funding: Companies can also provide sponsorship and funding for various sports events and teams, and individual athletes which can help in promoting sports by improving the quality of training, quality equipment and helping participate in competitions.
Skill Development: CSR initiatives can be launched to help promote skill development in sports. This could include training programs for coaches, sports science research, and the development of training modules for athletes.
Grassroots Development: Companies can also focus on grassroots development, targeting schools and colleges to promote sports and encourage participation. This can be done by sponsoring local sports teams, providing sports equipment and coaching, and organizing sports events and tournaments.
Promoting Diversity and Inclusion: Companies can also use their CSR initiatives to promote diversity and inclusion in sports by providing opportunities and support for underrepresented groups, such as women and persons with disabilities.
Sports Science: CSR can help in the provision of quality sports science access to teams and athletes, helping them be better competition ready.
Overall, CSR initiatives can play a critical role in developing and promoting sports in India by providing funding, infrastructure, and support for athletes and promoting sports as a healthy and rewarding activity for all.
Barriers to CSR in sports
One of the barriers to CSR in sports is the perception that sports is more of a glamorous showcase and seen through the lens of only winning and profitability, and that social and environmental responsibilities come second.
Another barrier is the limited information or research available to corporates on how they can contribute to sports. Corporate decision-makers don’t see sports falling in the same category as other issues. As seen from the earlier data, not many companies have shown interest in channeling their CSR efforts toward sports.
Additionally, sports organizations may face challenges in identifying appropriate CSR initiatives and finding partners to collaborate with. There may also be differing opinions within the organization on the importance of CSR, which can make it difficult to gain consensus on which initiatives to pursue.
Finally, some stakeholders may be skeptical of sports organizations' CSR initiatives, viewing them as mere publicity stunts rather than genuine efforts to make a positive impact. This can make it challenging for sports organizations to build trust with stakeholders and gain support for their initiatives.
How can Sports NGOs accept CSR funds?
If you are a Sports based NGO or a foundation, here’s a quick guide on how you can be eligible to accept CSR grants in India.
Registration: The entity must be registered under the Societies Registration Act, 1860 or Indian Trusts Act, 1882, or Section 8 of the Companies Act, 2013, to be eligible for receiving CSR funding from companies.
Form CSR 1: The implementation entity must get registered in form CSR-1 and get a unique CSR registration number.
Eligibility: The entity must meet the eligibility criteria laid out by the company to be eligible for receiving CSR funding. The eligibility criteria may vary from company to company and may include factors such as track record, area of work, and financial stability.
Reporting: The entity receiving CSR funds must provide regular reports to the company on the progress and impact of its CSR activities. The reports must be in the format specified by the company and should be submitted at regular intervals.
Monitoring and Evaluation: The entity must have proper monitoring and evaluation systems in place to track the progress and impact of its CSR activities. The systems should be able to provide data on the outcomes achieved, beneficiaries served, and challenges faced.
Audit and Compliance: The entity receiving CSR funds must undergo regular audits to ensure compliance with the CSR regulations. The audits should be conducted by a qualified and independent auditor and should cover all aspects of operations, including financial management and governance.
Utilization of Funds: The entity must utilize the CSR funds received for the designated CSR activities only and not for any other purpose. They must also ensure that the funds are used efficiently and effectively to achieve the desired outcomes.
Documentation: The entity must maintain proper documentation of its CSR activities, including the funds received, expenditures incurred, and outcomes achieved. The documentation must be transparent and easily accessible to stakeholders.
In summary, NGOs in India must comply with various regulations related to CSR to be eligible for receiving funding from companies. The entity must ensure that they meet the eligibility criteria, provide regular reports on their progress and impact, have proper monitoring and evaluation systems in place, undergo regular audits to ensure compliance, utilize the funds received for the designated CSR activities only, maintain proper documentation, and be transparent in their operations
If the corporate sector responds positively to these appeals and recognizes the potential opportunity, it could provide essential financial and logistical support to Indian athletes and sports infrastructure, which could be a significant step toward India becoming a major player in the sporting world.