Call to Action: CSR Amendment to Exclude Societies and Trusts

Call to Action: CSR Amendment to Exclude Societies and Trusts

India’s Ministry of Corporate Affairs has invited public comment on its Draft Companies (Corporate Social Responsibility Policy) Amendment Rules, 2020. Under Rule 4 of the proposed amendment, societies and trusts would be excluded as ‘implementing agencies’ to carry out development activities using CSR funds, thereby limiting this role only to Section 8 companies and entities established under acts of Parliament and states. Many of your organisations may be registered as trusts and would be adversely affected by these changes.

Fearing that this presents a serious setback for India’s vital social impact sector — at a time when we are facing an unprecedented public health crisis that demands significant philanthropic assistance — civil society representatives are urging lawmakers not to approve the proposal as currently written. Feedback on this proposal, an amendment to the Companies (CSR Policy) Rules, 2014, must be submitted online no later than March 28, 2020 April 10, 2020 April 20, 2020.

Based on a March 23 conference call among 10 civil society leaders, CSIP recommends the following immediate actions and long-term next steps on a strong way forward:

Actions to Take Today

  1. Demand an extension to the March 28 deadline for public comments.
  2. Ensure lawmakers have the information they need to oppose amendments that would have negative impacts on civil society.
  3. Request an analysis of the potential impact of this amendment on societies, trusts, nonprofit organisations, foundations, Section 8 companies, and the corporate sector.
    MOST IMPORTANTLY:
  4. Submit your comments on the proposed amendments (http://feedapp.mca.gov.in/csr/), including:
    • Modify Rule 4(1)(a) to include registered societies and registered charitable trusts to undertake CSR implementation.
    • Modify Rule 7(3) to allow CSR assets to be held by Section 8 companies, registered public charitable trusts or societies or autonomous bodies which created these out of CSR funds, or else to be held by a public authority. Additionally, this rule should not be made applicable retroactively for assets created in the past.

Next Steps

  • Reach out to influential individuals and institutions who may be able to help raise awareness and advocate effectively on this matter.
  • Work towards a long-term strategy to give societies, trusts, philanthropic organisations, academic researchers, and CSR foundations/wings a voice in policy-making for the sector.
  • Join a WhatsApp group for leaders interested in knowing more about India’s nonprofit sector regulatory frameworks, by emailing cap.csip@ashoka.edu.in with your name, designation and organisation.