Going Beyond Cheque Book Philanthropy Five Things to Consider to Drive Measurable Social Impact.

India's social sector spending has been on a tear. Growing at 13% annually since 2018, it had reached about USD 280 Bn, last year, says 贝恩公司 in its India Philanthropy Report 2024. However, despite this impressive growth, India still falls short of meeting the spending targets set by NITI Aayog , leaving a significant gap in achieving the UN's Sustainable Development Goals (SDGs) by 2030. This shortfall can be attributed to several factors, but it begs the question: Where is the disconnect between spending and impact?

Despite a massive 95% share of social spending coming from the public sector, India struggles to meet SDG targets as laid out by Niti Aayog. Reputation risks and complex regulations further the need for customized strategy for impactful social initiatives. Simply throwing money at problems won't suffice - navigating this intersection is crucial for maximizing social impact.

We have learned a lot from our hands-on experience. Here are 5 key takeaways that can help you navigate social impact initiatives in India.

#1. Impact starts with the right intent

While regulatory changes have improved compliance and tax breaks incentivize individual donations, the focus on spending goals often overlooks a critical element - the quality of the impact. This quality, and ultimately the commitment to achieving transformative outcomes, stems from the very intent behind social sector spending. Our proprietary research reveals a concerning trend: a significant portion of such spending is not driven by a desire for long-term change. Instead, it is motivated by Compliance Needs, Quick fixes for Reputational Issues, and even Employee Engagement.

There are, however, exceptional organizations leading the way with groundbreaking work. The question remains: What is the true purpose behind social sector spending? Companies with a well-defined and demonstrably delivered social purpose consistently rank among the most respected brands - Tata Group , 联合利华 , ITC Limited , Hero Group , and 宝洁 are prime examples that feature regularly on top of any rankings for India’s most respected companies.

#2. Social impact is more than just a trendy thing to do

Social sector spending has been predominantly in areas of education, health, women empowerment, skilling, livelihoods and more recently environment and sustainability. While there is no denying that some organisations have done focused work, there are others that?jump from one focus area to another to keep up with the ‘latest’ trend. The question arises “Are you committed enough to a specific cause to see it through?” and “Will you give a project enough time and resources to actually yield measurable results.”

A recent conversation with a leader from a leading Indian NGO shed light on a concerning phenomenon: ‘Cause Fatigue.' Social sector spenders, it seems, are growing tired of long-term commitments, leading them to jump from cause to cause. According to him, companies get tired of being associated with one cause and look for the next interesting area. However, the question is “what problem did they help resolve for the communities they served and what happens to the programme as the initiatives get abandoned.”

#3. Not what you want to do but what the communities need

?Social sector spending decisions often stem from a well-meaning desire to contribute to a cause that resonates with the donor or company, aligns with the business's strengths, or offers reputational benefits. However, initiatives driven solely by these internal factors, without a deep understanding of community needs, often fall short. They tend to be tactical, one-off efforts and fail to address the root causes of social problems.

?The crucial question becomes: How many social sector spenders truly invest in understanding the communities they aim to serve? Here is where the industry of the social sector spender becomes a critical factor. Think of it as the difference between offering a band-aid to a gunshot wound. Understanding community needs requires investment in research, community consultations, and collaboration with local NGOs. This ensures that social impact initiatives are not simply well-intentioned gestures, but rather targeted solutions that address the underlying challenges faced by the communities themselves.

?#4. Teach fishing, not just providing the catch

?True impact hinges on empowering communities to become self-sufficient. The critical question becomes: Are communities equipped to function independently after NGO support ceases? Imagine offering a crutch to someone who needs to learn to walk – the crutch provides temporary support, but it does not teach them the necessary skills.

?The focus should shift towards capacity building, especially in context of 17 SDGs by 2030. This involves investing in initiatives that equip communities with the knowledge, resources, and skills to solve their own problems. By empowering communities, social impact efforts can create a lasting and transformative difference.