Far from the drum-beating noises and the high drama unfolding in the final league matches of the FIFA world cup in Brazil this week, the Ministry of Corporate Affairs (MCA) in India issued a small circular that could change the way how the CSR spends are made for sport development in our country.
In what could be seen as positive signs for those who are working for long-term sport development in India, the MCA has clarified in this circular that one-off events such as marathons/ awards/ charitable contribution/etc would not qualify as part of CSR expenditure anymore.
Given the raising importance of sports in India and the far-reaching visibility it creates, companies are increasingly flirting with the theme of sports in their CSR projects. However, the usual spending has been on one-off events or short-term nature of sport for development projects so far that provides companies with glorifying numbers to show a high social return on investment.
The obsession with numbers has meant that the long-term sport development projects have never received the enormity of funds that short-term ones receive in India. More CSR funds have moved in to the short-term sport for development projects that promote the right to play theme and use sport as a means for creating awareness about other issues such as water, sanitation and health.
I was in Mumbai last month where I met a number of high-profile industry leaders. I was discussing with them where they spend their CSR money and their expectations from CSR spending in sports-related projects. Many of them spoke about how they would like to support the training of young athletes, but stopped short at calculating the return of investment.
Their main concerns being — how to justify big spends on few athletes? What if these athletes don’t win any medals? Through spending on one-off events and short-term sport for development projects, they say it helps them justify the CSR spends to their stakeholders. The budget is less and more youth they are able to reach out to. In short, the social return on investment is great.
Yet, the question India Inc. so far has stopped at asking themselves is — are these short-term projects or one-off events like marathons really transforming lives of youth? Are these projects more an obligation to abide the rules or being taken up as a true responsibility for carrying out sustainable efforts for sport development at the grassroots?
In what has become a trend, the companies nowadays are also coming out to support India’s elite athletes’ training few months before a major competition like Olympics, Asian Games or Commonwealth Games. As such, these companies would sponsor three-four athletes through their CSR budgets, identifying them as potential medal prospects. With at least one or two athletes ending with a podium finish, the companies thus ensure they are maximising their return on investment.
As these winning athletes become sporting heroes of the country for the next few months, companies take them around for their promotional events, reducing the cost of their marketing spend, which they would otherwise spend on a celebrity to launch the product or service.
Athletes don’t complain, as they are always in need of funds, government doesn’t complain, as the industry is stepping in to support athletes, and public doesn’t complain as it sees at least some one is supporting our sporting heroes.
But then is this really a sustainable model for supporting sporting excellence or sport development? Is felicitating such an athlete with an award at a function a justifiable CSR spend? These new rules of the CSR game have come up as rays of sunshine breaking through the dark clouds for long-term sport development in this country.
However, rules are rules, imposing them is one thing, and abiding them is another thing. So it really lies in the hands of India Inc. whether it genuinely wants to take up the onus of sport development as a responsibility and create a long-term value-based process that makes sports a true winner in this country.
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