India has emerged as one of the few countries in the world to make Corporate Social Responsibility (CSR) a legal mandate. Since the introduction of the Companies Act of 2013, corporations meeting certain financial thresholds are required to contribute 2% of their three-year average net profits toward socially beneficial projects.¹ Every company having an office, branch office or project office in India (including a holding company, subsidiary, or foreign company) must comply with CSR provisions. This landmark legislation has reshaped how the corporate ecosystem and community development intersect in India.  

The Companies Act defines the range of CSR activities that companies can undertake, including initiatives that promote social welfare, sustainability, and national development across several key areas such as poverty, health and sanitation, education, gender equality and vulnerable groups, and rural and slum development.² Between 2018 and 2023, corporate entities collectively spent INR 1.27 lakh crore (around USD 15.47 billion) on CSR activities,³ with funding directed to projects in education, healthcare, poverty alleviation, environmental sustainability, and community development.⁴ The petroleum, banking and finance, and information technology industries remain the leading contributors to CSR in India.⁵

CSR as a strategic business consideration 

Companies in India regard CSR as more than a legal requirement, as they’ve come to realize the competitive advantage of incorporating CSR initiatives into their operations. The integration of CSR into a company’s core operations not only strengthens its brand recognition but also builds trust and goodwill within communities. Thoughtful CSR initiatives attract socially conscious investors and customers, boost employee morale and engagement, and help mitigate business risks. Ultimately, CSR serves as a catalyst for creating sustainable, long-term value for both companies and society.

While companies generally do not receive a direct tax deduction for mandatory CSR expenditure, some types of contributions may qualify for deductions under other sections of the Income Tax Act, such as Section 80G or Section 35. In addition, Indian companies with any foreign ownership may be subject to foreign contribution laws.

The role of NGOs in advancing CSR 

CSR is a Board-driven process, as the Board of a company is empowered to plan, execute, and monitor its CSR activities based on the recommendation of its CSR Committee. CSR Committees most often rely on the expertise of Non-Governmental Organizations (NGO) and Civil Society Organizations (CSO).

This intersection of corporate incentives and social responsibility creates a unique opportunity for NGOs and CSOs to leverage CSR funding to increase impact, as most CSR initiatives are carried out through NGOs and CSOs. NGOs often have established networks of trust within vulnerable groups, as well as technical knowledge in areas sought out for CSR activities, such as healthcare, education, and gender empowerment. By partnering with a company contributing financial resources, management skills, and technological capabilities, NGOs can ensure that these resources are implemented effectively and ethically, reaching those who need them most.  These organizations act as “implementing agencies” regulated by the CSR Policy Rules, and 71% of companies have expressed a preference for working with such implementing agencies.⁶ In 2023-2024, 65% of CSR expenditure was channeled through external agencies, reflecting the significance of external expertise in CSR project execution⁷.

How NGOs can position themselves for CSR funding

CSR thus presents a powerful opportunity for NGOs and CSOs to secure funding, enhance their programmatic impact, and collaborate with businesses for positive social change. By aligning their activities to CSR priority areas, NGOs can leverage financial and other resources to implement effective CSR projects. NGOs should ensure transparency, financial accountability, and strategic alignment with corporate CSR goals to attract funding, as corporations prefer working with NGOs that demonstrate good governance and accountability. NGOs can further strengthen their profile by:

• Publishing annual reports and impact stories;
• Maintaining audited financial statements;
• Obtaining third-party evaluations of its programs; and
• Securing certifications or accreditations (e.g., GuideStar India, Credibility Alliance).

Technology also plays a crucial role in helping NGOs maximize CSR funding opportunities, as the integration of digital tools and platforms into NGO operations can open new avenues for engagement and support. Such tools enable NGOs to track impact, streamline reporting, and present data-driven proposals that appeal to corporations seeking implementing agencies with a history of accountability and measurable outcomes.  Additionally, leveraging social media allows NGOs to amplify their impact, build public trust and increase visibility among potential CSR funders and collaborators. In a competitive funding environment, digital fluency can be the difference between a compelling pitch and a missed opportunity.

For guidance or recommendations in understanding how your nonprofit can leverage CSR to maximize its mission, please contact Jeanny Lee at jlee@devsourcing.com. 

1. Section 135(5), Indian Companies Act, 2013. CSR rules apply to every company fulfilling any of the following conditions in the preceding financial year: 
   Net worth of more than Rs.500 crore (about USD 56M) 
   Turnover of more than Rs.1000 crore (about USD 112M) 
   Net profit of more than Rs.5 crore (about USD 563,000)  ↩︎
2. Schedule VII, Indian Companies Act, 2013. ↩︎
3. Bharat CSR Performance Report, 2018 – 2023, Fulcrum(2024) https://fulcrum.vision/wp-content/uploads/2024/08/Bharat-CSR-Performance-Report-2018-2023.pdf ↩︎
4. Ten years of CSR in India: What do organizations need today, KPMG (2024), https://kpmg.com/in/en/blogs/2024/08/ten-years-of-csr-in-india-what-do-organisations-need-today.html ↩︎
5. 13th Annual Report on Corporate Social Responsibility and Employee Engagement Trends, Blackbaud (2025). ↩︎
6.  India CSR Outlook Report, 2024 CRBox, https://csrboximpact.in/storage/publications/India-CSR-Outlook-Report-2024.pdf ↩︎
7. Companies (Corporate Social Responsibility Policy) Amendment Rules, 2025. ↩︎

Disclaimer: This material is provided for informational purposes and does not constitute legal advice. Access to or use of this information is not intended to create, and does not constitute, a lawyer-client relationship. No portion should be acted upon without first seeking legal counsel about your specific legal situation.