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Main Hoon Na - CSR is not street charity?

Sundharesan Jayamoorthi 
on 24 February 2015

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Street Charity chant, “please do charity in the name of almighty”, reaction to this may be impulsive, we donate but without knowing the cause. This impulsive charity does not require the caregiver to look back on who the beneficiary is and the alms seeker is not turning back to acknowledge the good deed. It is also amusing to note that some promoters of listed entities liquidate their holding and issue a press release that reads “promoter sold shares in the name of charity”, why do these promoters feel shy to disclose that they need money, why liquidate in the name of charity? The promoter of a NGO who is raising funds, appeals “please donate in the name of charity”. These tunes and tone of realizing and raising money for charity is becoming an act of street charity?

CSR in the guise of street charity

The term charity has no clarity from the regulators but the Company, NGO, promoters of company want to sing the tune of “street charity”. If the person who donates does not know why he is giving and the person who takes does not know why he is taking, where is CSR? With the current requirement of a mandatory CSR spend there suddenly seems to be lot of money with corporates to spare but are finding it difficult to comprehend the few areas or avenues to give the money coupled with lack of trusted NGO’s in this business. This opens a window of a breed of entrepreneurs who may want to do something out of nothing and trying to fund something for nothing.

Why take charity to do good?

The underlying principle of CSR is to do good, if you are not raising money from stakeholders and you are cleaning the street without charging, this act can be CSR and if someone is going to fund this activity to clean the same streets - it may not be CSR? Is CSR trying to give a commercial angle to the concept of street charity and trying to term it as Art of Charity? There are instances like Aravind eye hospital in Madurai, which render free eye operations to the poor, and they have not raised any external borrowing and have survived tough times. If this is real CSR, then why does CSR need funding, why are the existing NGO’s in CSR becoming a little greedy in asking for extra funding. By taking donations are they not answerable for their work, they cannot be in a state of nothingness, they have to be in a state of somethingness and have to do something to show that they are also working for the money that they raise from corporates. Thus starts the business of corporatizing the act of street charity with a fund flow statement.

In the name of Charity

Why should a promoter sell shares realizing the million from the sale quoting charity as a reason, in the past no one has given an account of the quantum of money that was realised from the sale of stock in the name of Charity and what was actually deployed into charitable activity. Why do people want to act holy but realize their fortunes in the name of charity? This is street charity of raising and realizing money in the name of charity. Till date there is no published document or accountability on the amount that is realized by the governance and conscience keepers and what was spent on charity or CSR activity.

Street Charity cannot identify the beneficiary

The promoter who sells his shares in the name of charity OR the NGO who raises money in the name of charity OR the care seeker who is the ultimate beneficiary who does not even know what CSR is all about are all involved in the act of street charity without a real cause. Let corporates and NGO not convert this CSR as a street charity where the last person who is benefitted with the shareholders money is not identified. Every corporate is accountable to its shareholders for the activity of CSR and will have to be responsible to list out the beneficiaries and the change that these CSR initiatives has bought to the underprivileged. The NGO’s who raise money will have to be answerable by publishing information for all the collections as against the spend, since there is no regulation to regulate NGO’s and this act of street charity can go terribly wrong with NGO. In conclusion, CSR spend will not be treated as a street charity only if every beneficiary of CSR can be identified by the corporate and NGO. 


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Category Corporate Law
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Sundharesan Jayamoorthi 

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