Sports CSR not a priority for Indian corporate

Indian corporate has spent Rs 8,185 on their CSR activities. Sports gets a mere Rs 57 crore, less than 1% of the total fund.

A Confederation of India Industries (CII) report reveals that sports is placed at the bottom of the eight major sectors where Indian corporate spends its CSR funds.

Three years ago, the government of India, via the Companies Act, 2013, had made it mandatory for companies with a net worth of Rs 500 crore, or revenue of Rs 1,000 crore, or net profit of Rs 5 crore, to spend 2% of their average profit in the last three years on social development-related activities. The Companies Act lists various activities as CSR. The list includes sanitation, gender equality, education and skill development, rural development and also sports development.

When the Act was first passed, CSR in sports only included ‘training to promote rural sports, nationally recognised sports, paralympic sports and Olympic sports. In 2015, the ambit of permissible CSR activities was extended to ‘construction, renovation, maintenance of stadiums, gymnasiums and rehabilitation centres.

However, sports still remains far down the priority list for companies for CSR activities. In the 2015-’16 financial year, 1,270 companies collectively spent Rs 8,185 crore on CSR activities, according to the Annual CSR Tracker report by the Confederation of Indian Industry and the Centre of Excellence for Sustainable Development. However, only Rs 57 crore, or 0.69% of the Rs 8,185 crore, was spent on sports development.

In fact, the percentage of CSR spend on sports has decreased compared with the 2014-’15 financial year, when 0.73% of Rs 6,400 crore, or Rs 47 crore, was allotted to sports. Experts said that this was because sport still does not connect with private companies compared with popular CSR activities such as health, education and rural development.

A major reason for this disinterest is that the companies don’t consider sports as an area for CSR. “Traditionally most corporate don’t consider sports as a CSR opportunity and therein lies the biggest challenge,” Maneesh Bahuguna, CEO of Anglian Medal Hunt, has told Jaideep Vaidya, sports desk editor for scroll.in. “It’s still very much a branding thing – what will I get out of it? Health, education, gender empowerment, writing a cheque to the Prime Minister’s Office is easy. But you really need to have a decent pitch to convince the corporate that sports is also worth investing in as CSR.”

Another reason could be that companies are still figuring out CSR and what they can do with it considering it’s been just three years since it became a mandate. “It took a while for companies to understand what the obligations were, how to go about things,” said Nandan Kamath, principal lawyer at LawNK, a sports and intellectual property law firm.

“Companies are required to create a committee of their own to evaluate CSR proposals,” he added. “CSR is not like textbook philanthropy. It’s not like giving a cheque. CSR has to be a programme, with objectives, a starting point, an ending point, clarity of funding, quarterly reports. It’s not just about selecting 10 athletes and giving them cheques. It involves moving them from X to Y year-on-year. It’s a full-fledged athlete management programme.”

Companies hardly explore the depths of what they can do with CSR in sports, and this is their own loss considering the marketing values that they can gain from it. “Sports, unlike other ​areas of CSR, ​provides companies far greater​ visibility,” said Aman Dhall, a former athlete who is now a marketing, communications and CSR specialist.

“Sports has an instant ​and emotional ​connect with society, and it helps companies with enhanced social reputation in the​ eyes of the public and the ​media,” he added​​​. “Companies look at it ​for achieving wider marketing goals on the smallest of budgets possible. It ​also ​makes them look​ good in ​documentation, as it show​s them as angels of sport and human development in annual reports.”

Kamath quoted the example of shuttler K Srikanth, who has leapfrogged into the world’s top 10 after back-to-back Superseries title wins this year. Srikanth is supported by the non-profit GoSports Foundation, of which Kamath is a managing trustee. “Our clients who have supported Srikanth right from the start, the excitement level in them for having been part of that journey is very apparent,” he said. “They are so happy that they took this risk.”