Could the CSR donation money given by a co. to be used for legal needs of an Ngo?
When a company donates money to an NGO under its CSR activity, can this money be used by the NGO for its legal needs?
Corporate Social Responsibility (CSR) is a concept wherein the companies decide voluntarily to contribute to a better society and a cleaner environment. Corporate Social Responsibility is represented by the contributions undertaken by companies to society through its business activities and its social investment. This is also to connect the Concept of sustainable development from the point of view of a company.
Over the last few years an increasing number of companies worldwide have started promoting their Corporate Social Responsibility strategies because the customers, the public and the investors expect them to act sustainable as well as responsible. CSR also give/donate money to NGO’s.
NGO accountability is a complex issue and organizations need to be accountable to many different sets of stakeholders which, separately and collectively, play an integral part in their operations hence it depends on the policy of the company as to where and for what purpose it is donating the money. If a company has stringent policy towards environment preservation and for this it donates money, then it becomes mandatory for that particular NGO to utilise that money only in that regard (It can use the money for legal matters concerning environment). But in case a company does not specify as to what purpose it is donating the money then it is for the NGO to decide how the money is to be utilised. But in this case also, it is mandatory for that NGO to show how the money/ donation was utilised.
CSR generally refers to a range of initiatives adopted by Companies, business associations, and so called multi-stockholder entities that aim to promote ethical corporate behaviour and negatives impacts of business activity on society and environment.
With growing resources being channeled into the sector, it has become imperative that NGOs, regardless of the sector or country in which they work, are able to demonstrate to whom and for what they are accountable.
All the income of the NGOs is required to be utilized only in furtherance of the aims and objectives of the society. An NGO is obligated to spend the monies raised, received, accumulated only on furthering the objects of its mission. Further charity fund raisers face accountability for ensuring that funds were used for the purpose stated. It is totally up to the NGOs for using their resources in any manner in furtherance of achieving their goal unless and until specifically required by concerned company to use the resources for any particular purpose. But in all cases object of NGOs must be lawful for which money is being spent. NGOs cannot use such money for any illegal purpose i.e. communal disharmony, armed robbery, prostitution etc.
Book a phone consultation with a top-rated lawyer on Lawfarm.