What is a CSR fund? Know types, benefits and CSR funding companies etc.

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What does it truly mean for a business to be socially responsible? CSR isn’t just a buzzword—it’s a key idea that shapes how corporations interact with society and the environment. Businesses over a particular financial threshold in India must practice CSR as a legal requirement. We’ll discuss how Indian companies are adopting these ideas, CSR financing, and the many benefits of responsible business practices for companies and communities.

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What is a CSR fund?

Corporate Social Responsibility (CSR) refers to the concept that businesses have a responsibility to positively contribute to society and the environment. CSR is a legal requirement for firms over a particular financial threshold in India. 

The Companies Act 2013 requires Indian enterprises having a net value of INR 500 crore, a turnover of INR 1000 crore, or a net profit of INR 5 crore to spend at least 2% of their average annual earnings over the last three years on CSR efforts. 

The Indian Ministry of Corporate Affairs oversees these operations. Indian companies can meet their environmental, ethical, charitable, and economic obligations through CSR, helping their business and communities.

Type of CSR

Environmental Responsibility

CSR companies must be eco-friendly. Business environmental responsibility extends beyond regulatory compliance to reduce harm and promote sustainability.

Corporations can reduce greenhouse gas emissions, pollution, waste, and resource depletion. Businesses can reduce their environmental impact by being environmentally responsible.

Environmental responsibility varies by firm size and industry. Some companies use renewable energy and sustainable materials. Some do so by developing a company-wide recycling program or supporting local environmental groups.

Ethical Responsibility

Businesses need ethical duties to maintain fair procedures from the supply chain to the boardroom. Companies must treat employees, stakeholders, and consumers ethically, fairly, and respectfully. 

CSR can be approached in several ways. Organizations can practice numerous ethical duties. They include raising the minimum wage, ethically sourcing products, competitive pay, full benefits, and courteous treatment of all employees.

Philanthropic Responsibility

Today’s socially responsible enterprises serve their communities rather than merely make money. Businesses should give back to their communities and support their objectives. Such actions meet firms’ philanthropic responsibilities. From sponsoring a local nonprofit’s yearly fundraiser to donating a portion of a business’s annual earnings, philanthropy can take various forms.

Economic Responsibility

A business that values economic responsibility makes financial decisions that benefit society over profit. This suggests that corporate economic responsibility is linked to the others. This could mean that socially responsible corporations work with suppliers who value sustainable materials, even if they cost more. 

Another way corporations can show their economic responsibility is by creating a transparent salary system that assures equal compensation for all employees and resolves previous gender and racial pay inequities.

CSR funding companies

1. HDFC Bank 

HDFC Bank maintains its position in the 500 Crore CSR club, allocating ₹820.89 crore towards initiatives spanning livelihood, skill development, education, health, and natural resource management. Its ‘Parivartan’ program focuses on fostering self-sufficiency and community integration, with notable efforts in rural development, education, and financial literacy.

2. Reliance Industrial Limited

RIL secures the top spot for its diverse CSR initiatives in 2023. Its CSR policy, guided by the Companies Act 2013, focuses on education, healthcare, environment, and social welfare. Key programs include rural transformation, vision care, nutrition gardens, and disaster management, demonstrating RIL’s commitment to community development.

3. State Bank of India

SBI secured the second spot for its robust CSR initiatives in 2023. In healthcare, the bank partnered to establish a hospital, supported TB patients, and donated for eye care. For the environment, SBI contributed to lake rejuvenation and electric vehicle infrastructure. 

In livelihood development, the bank supported rural skill training, startups, and flood relief. SBI also empowered women, backed the armed forces, preserved heritage, and promoted cleanliness, demonstrating a comprehensive approach to corporate social responsibility.

4. ITC 

ITC secured the third position for its strategic CSR efforts in 2023. The company’s programs addressed key development challenges, empowering women, benefiting marginalized communities, and enhancing human development. 

Interventions focused on livelihoods, water stewardship, biodiversity, climate-smart agriculture, livestock, education, skilling, sanitation, and health, demonstrating ITC’s commitment to holistic community development.

5. JSW Steel 

JSW Steel secured the fifth position for its strategic CSR efforts in 2023. The company, through the JSW Foundation, undertook comprehensive programs across education, health, water, sanitation, skills, agriculture, and heritage preservation. JSW’s interventions focused on community well-being, leveraging stakeholder engagement to create a self-sustaining ecosystem. The company consistently increased its CSR expenditure, demonstrating a long-term commitment to sustainable development.

NOTE: Get the information about the complete list of companies visit

How to Apply for CSR Funding?

1. Determine your Focus

Find out where the company wants to make a difference before applying for a CSR project. It could be education, healthcare, environmental sustainability, or another field that matches the company’s values and goals. After identifying the focus area, the company may more easily identify its project.

2. Researching thoroughly

Let’s examine the focus area’s CSR projects. This helps the organization identify gaps and possible contributions. Do your homework on the projects’ eligibility and application processes.

3. Pick an Exciting Project and Partner

After extensive investigation, the company can choose its CSR project. Choosing a project that fits the company’s beliefs and goals and improves society is vital. We seek a partner organization that is active in the field and has experience with comparable projects.

4. Apply Online

The company can easily apply for the CSR project online after identifying the project and partner. Many companies allow candidates to submit a form online. The application form may ask questions about the project, partner organization, impact, and budget.

5. Evaluation

After receiving the application, the organization evaluates it based on its fit with its target areas, impact, feasibility, and budget. The organization may visit the partner organization’s site to assess its legitimacy and project viability.

6. Executing Your Vision

Once the proposal is approved, the company and partner can start the project. Project progress and impact must be monitored and evaluated regularly.

Online CSR project applications allow companies to improve society easily and effectively. Identifying the focus area, studying current projects, choosing a suitable project and partner, applying online, and executing the project efficiently are all important tasks. Companies can fulfil their moral commitment to society and improve their communities by following these procedures.

How to Start a CSR Fund?

Starting a CSR fund involves setting up a structured way for a company to manage and disburse its Corporate Social Responsibility contributions. Here’s how to do it:

Assess Company Size

  • CSR is mandatory in India for companies with net worth ≥₹500 crore, turnover ≥₹1000 crore, or net profit ≥₹5 crore.
  • Smaller companies can voluntarily start CSR initiatives.

Read also: Get the information about the CSR Registration for NGOs here.

Form a CSR Committee

  • For qualifying companies, this is required by law.
  • Include board members and at least one independent director.

Develop a CSR Policy

  • Define focus areas (e.g., education, healthcare, environment).
  • Set guidelines for project selection and fund allocation.

Choose implementation method

  • Direct implementation by the company
  • Through a registered trust or society
  • Collaborating with other companies or NGOs

Allocate funds

  • Set aside at least 2% of average net profits from the last three years.

Plan projects

  • Identify specific initiatives aligned with your policy.
  • Consider both short-term and long-term projects.

Monitor and report

  • Track progress and impact of funded projects.
  • Publish annual reports on CSR activities.

Ensure compliance

  • Follow all legal requirements under Section 135 of the Companies Act.

Remember, while starting a CSR fund fulfils legal obligations, it’s also an opportunity to create meaningful social impact and enhance corporate reputation.

The benefit of CSR funding

Corporate Social Responsibility financing benefits include:

1. Improved Reputation and Brand Image

CSR programs show a company’s commitment to social and environmental sustainability, which boosts its reputation. This can boost customer loyalty, media coverage, and stakeholder perceptions.

2. Increased Employee Engagement and Morale

Companies that support social and environmental causes frequently motivate and engage their workers. In this way, you can enjoy higher job satisfaction, lower turnover, and increased productivity.

3. Competitive Advantage

As consumers and investors value ethical and socially responsible business practices, investing in CSR can give a company a market advantage.

4. Risk Mitigation

Proactive CSR can help organizations detect and reduce risks, including environmental difficulties, labour disputes, and regulatory changes, which can affect operations and profitability.

5. New Markets and Opportunities

CSR programs can help companies establish their social and environmental commitment in disadvantaged or developing regions, opening them to new markets.

6. Better Financial Performance

While the direct financial benefit of CSR is not always quantifiable, studies have shown that organizations with excellent CSR practices generally outperform their rivals in financial metrics like return on equity and return on assets.

7. Alignment with Sustainable Development Goals (SDGs)

Companies can promote global sustainability and corporate citizenship by linking their CSR efforts with the UN SDGs.

CSR investment can boost a company’s brand, engage employees, and improve society and the environment.


Corporate social responsibility funding has many advantages. Businesses can boost reputation, employee engagement, competitiveness, risk mitigation, and financial performance by engaging in socially responsible activities. CSR actions that support global sustainable development goals allow corporations to contribute to the greater good and be decent corporate citizens. CSR investment offers firms a strategic opportunity to build shared value with their communities.

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