Tata Groups' chief ethics officer Mukund Rajan-led task force proposes CSR math for corporates

NEW DELHI: A joint task force of representatives of industry and non-profits led by the Tata group's chief ethics officer and brand custodian Mukund Rajan has proposed a formula to put a monetary value to the time devoted by corporate executives, managers and CEOs volunteering for social causes.

The formula, which has been submitted to the government, values the voluntary work by an executive or junior manager with less than five years of experience at Rs 252 per hour. The rates go up for senior managers and are pegged at Rs 2,711 per hour for directors, vice-presidents and CXOs. The 'Rajan formula', according to industry representatives, could break an impasse that has arisen over how to value pro bono work done by corporate executives.
This June, the government included "volunteering activities by corporate employees" as a permissible activity under the mandatory corporate social responsibility or CSR spending norms prescribed by the Companies Act of 2013. But the corporate affairs ministry is yet to decide on how such pro bono work should be valued, as there are differences between the government and the industry on this.

Industry associations want the government to value the time spent on such work on the basis of employees’ cost to company or CTC. The government, however, believes that this approach could be misused to overstate expenditure as CTC can be calculated in many different ways, and is of the view that basic pay would be a better metric. The Rajan-led task force, which has been set up under the aegis of the India@75 trust, has proposed a middle path.

According to Rajan Navani, chairman of the India@ 75's national committee, the task force has taken the average of salaries across from a representative sample of consumer, manufacturing and IT/ITeS firms and discounted it to 25 per cent, while computing the hourly rates for pro bono work.

"We hope the valuation issue is settled soon so that there is more traction among companies and their employees to foster a culture of volunteering on company time," Navani said. This formula is part of a larger framework to synergise the development efforts of non-profit organisations with corporate India and assign hourly rates to the voluntary work done by junior, middle and senior managers as well as vice-presidents/CXOs.

"It is critical that NGOs' perceived value of the work done by corporate executives is factored into the valuation to help foster a more fair and sustainable ecosystem for pro bono work in India," Navani said. The taskforce formed by the India@75 Trust included nearly four dozen senior executives from India Inc and non-governmental organisations (NGOs) such as Pratham and Give India.

Top managers from Google India, General Electric, Godrej group, GVK, Bain and Co and Boston Consulting Group were also part of the taskforce that identified eight functional areas --such as legal, financial, marketing, analytics and technology -- in which corporate bosses could assist non-profits on 180 different types of projects.

India has more than 3.3 million NGOs working on different developmental goals, and 81% of them are keen on getting skilled volunteers to improve their operations, according to a study. Pro bono work was valued at $187 billion in 2010 in the US.

"We can match professionals' core skills and corporations’ core competencies with non-profits for a high-impact volunteering programme that has the potential to bring industry and civil society together for India's development," the Rajan taskforce has said about the importance of an effective pro-bono programme.