CSR funds have become a critical tool for driving sustainable development through business contributions. But what is CSR funding, really? In simple terms, a CSR fund refers to the financial resources allocated by companies to support social, environmental, or community development initiatives.
In India, CSR funding became more structured after the introduction of the CSR law in India under the Companies Act, 2013. The law made it mandatory for eligible companies to spend a minimum percentage of their profits on CSR activities.
Whether you’re an NGO, a social enterprise, or a corporate entity, understanding CSR funds is key to designing programs that create measurable change. From healthcare and education to climate action and rural development, CSR funds serve as a bridge between corporate resources and societal needs.
At 4th Wheel, we understand the necessity of knowing how CSR funds work. This guide breaks down the different types of CSR responsibilities, how companies and nonprofits can engage with CSR funding, and what it takes to make these partnerships successful.
Types of CSR Responsibilities
Corporate social responsibility is not just about writing cheques and moving on. It’s a layered commitment that reflects in how a company operates, what it supports, and what social impact it makes. Broadly, CSR responsibilities fall into four categories:
- Environmental Responsibility: Initiatives aimed at reducing ecological impact—waste management, carbon footprint reduction, clean energy, and water conservation.
- Ethical Responsibility: Doing business fairly and transparently—this includes human rights, anti-corruption, and labour practices.
- Philanthropic Responsibility: Direct financial contributions to causes, nonprofits, or community efforts. This is the most visible use of CSR funds.
- Economic Responsibility: Supporting inclusive economic growth, such as fair wages, local sourcing, and rural development initiatives.
Understanding these CSR types helps companies align their CSR fund with causes that match their core values and business model while also enabling NGOS to design more relevant proposals for CSR grants.
Benefits of CSR Funding (For Both Companies and NGOS)
CSR funding creates a shared value model where both businesses and implementing organisations benefit. Here’s how:
Benefits of CSR Funding For Companies
- Builds brand trust and stakeholder goodwill.
- Helps meet regulatory requirements under Indian law (mandatory 2% spend for eligible companies).
- Allows alignment between social causes and business strategy.
- Generates long-term ROI through stronger communities and ecosystems.
- Enables meaningful impact evaluation and public reporting.
Benefits of CSR Funding For NGOS and Social Enterprises:
- Access to sustained financial support for programs and infrastructure.
- Opportunity to collaborate with corporations on long-term missions.
- Potential for technical support, mentoring, and capacity development.
- Increased visibility through partnerships with large brands.
- Better program outcomes through joint monitoring & evaluation mechanisms.
Whether you’re looking to invest CSR funds strategically or seeking CSR fund for NGO initiatives, a well-structured collaboration increases the likelihood of sustainable outcomes.
How to Start a CSR Fund (For Companies)
For companies eligible under India’s CSR regulations, setting up a CSR fund goes beyond just allocating a budget. It’s about creating a focused, compliant, and outcome-driven framework.
Here’s how to get started:
1. Understand Legal Requirements
As per the Companies Act, 2013, companies with a net worth of ₹500 crore, a turnover of ₹1,000 crore, or a net profit of ₹5 crore or more are required to spend at least 2% of their average net profits over the last three years on CSR. This is the basis of the CSR fund percentage requirement.
2. Define Focus Areas
Choose themes aligned with Schedule VII of the Act—education, healthcare, environment, gender equality, and rural development are common focus areas. Linking these to business values provides consistency and long-term commitment.
3. Set Up Internal Governance
Create a CSR committee at the board level to oversee CSR strategy and compliance. This group is responsible for approving budgets, reviewing proposals, and ascertaining alignment with the law and company ethics.
4. Develop a CSR Policy
Draft a clear policy that defines objectives, geographies, eligible partners, and funding guidelines. This becomes the reference point for all CSR fund disbursements. Your CSR policy should be a solid blueprint for your CSR initiatives.
5. Identify Implementation Partners
Work with NGOS, foundations, or social enterprises with proven credibility and the right expertise. Make sure your chosen implementation partners reflect the values of your company. Partnerships built on trust and shared vision lead to better outcomes.
Also Read: The Role of NGOS in CSR
6. Integrate Monitoring
Incorporate reliable monitoring & evaluation processes from the start. Define success metrics, reporting frequency, and feedback loops to track effectiveness and ensure accountability.
7. Disclose and Report
Companies must disclose CSR spending and project outcomes in their annual reports. Transparency in how you invest CSR funds builds trust and regulatory compliance in your CSR activities.
Leading CSR Funding Companies in India
Many Indian companies have mastered strategic and impactful CSR spending. These CSR funding companies in India are known for their scale, consistency, and transparent practices:
Tata Group
With a legacy of social commitment, the Tata Group channels CSR funding across education, healthcare, skill development, and sustainability. The Tata Trusts and Tata Sustainability Group coordinate efforts across its companies.
HDFC Bank
Through its various initiatives, HDFC focuses its CSR fund on financial literacy, livelihood improvement, and education. Their programs often integrate capacity development and community ownership.
Infosys
The corporate social responsibility Infosys model focuses on healthcare, education, and rural development through its Infosys Foundation. It’s one of the earliest adopters of structured CSR in India.
Mahindra & Mahindra
Mahindra & Mahindra, as one of the leading CSR funding companies, invests in girl child education, vocational training, and environmental sustainability. Their “Nanhi Kali” program is a widely cited example of long-term CSR commitment.
Reliance Industries
The Reliance Foundation works at scale across multiple verticals, including disaster response, healthcare access, and rural transformation, with robust systems for impact evaluation.
How to Apply for CSR Funding (For NGOs, Startups, and Social Enterprises)
Securing CSR funding requires a structured approach. Below are the key steps to guide NGOs, startups, and social enterprises through the application process:
1. Ensure Legal and Regulatory Compliance
To be eligible for CSR funds, organisations must:
- Register as a Section 8 company, trust, or society.
- Obtain 12a and 80G certifications under the Income Tax Act.
- File Form CSR-1 with the Ministry of Corporate Affairs to receive a unique CSR registration number.
These steps are essential for meeting the eligibility for receiving CSR funds.
2. Align with Corporate CSR Objectives
Identify companies whose CSR initiatives align with your organisation’s mission. Understanding a company’s CSR focus areas increases the likelihood of a successful partnership.
3. Develop a Comprehensive Proposal
Your proposal should include:
- The problem you’re solving
- Proposed intervention
- Geographic coverage
- Estimated budget and timeline
- Expected impact and how it will be measured (integrate social impact management or impact evaluation frameworks)
A well-structured proposal demonstrates your organisation’s capacity for effective social impact management.
4. Leverage Incubators and Accelerators
Engaging with incubators can provide additional support. For instance, the Bharat Impact Incubator offers the Impact Quest (IQ) Program, which provides CSR grants to innovative startups and nonprofits aiming to scale their solutions.
5. Submit and Follow Up
After submission:
- Maintain communication with the corporate CSR team.
- Be prepared to provide additional information or clarifications.
- Demonstrate transparency and responsiveness throughout the process.
Real-World Impact: Examples of CSR Funding in Action
CSR funding, when aligned with strong implementation and local ownership, creates lasting change. Here are a few examples of how CSR funds have translated into tangible outcomes, drawn from 4th Wheel’s work across India:
1. Women’s Livelihoods in Jharkhand & Odisha
In partnership with Tata Communications, 4th Wheel supported a multi-state program focused on skilling and financial inclusion for rural women. The initiative went beyond training by building support systems and measuring long-term outcomes through structured impact evaluation.
2. One Home One Toilet (OHOT) Program in Maharashtra
The 4th Wheel conducted an impact evaluation of the OHOT program by HT Parekh Foundation, which aimed to address open defecation issues in slums like Pimpri Chinchwad and Kolhapur. The evaluation highlighted significant improvements in access, privacy, and convenience for residents following the construction of household toilets.
3. Waste Management and Urban Hygiene in Bengaluru
Under Tesco’s ReWare project, 4th Wheel conducted M&E for the waste management program. The comprehensive program engaged local authorities as well as informal waste workers. Standardised awareness materials, training, and performance indicators helped reduce 15 black spots across five wards.
4. Maternal & Child Health in Mumbai
4th Wheel partnered with Ekam Foundation to improve healthcare access for mothers and children in underserved districts. The CSR fund supported efforts to strengthen public health delivery and address critical system gaps using data-driven insights
These examples underscore how thoughtful design, community involvement, and data-backed approaches can maximise the value of CSR grants to benefit both funders and communities.
Read Next
- What Is Corporate Social Responsibility (CSR)? Understanding Its Meaning & Benefits for Businesses
- 10 Key Elements of a Strong CSR Strategy Every Business Should Follow
- What are the Benefits of Corporate Social Investments?
Final Thoughts
CSR funds may be a compliance requirement, but they’re also one of the most effective ways for businesses to create lasting, meaningful social impact. When used well, CSR funding can address systemic challenges, build resilient communities, and create a shared sense of accountability between companies and civil society.
For NGOs and social enterprises, accessing corporate social responsibility grants opens doors to resources, partnerships, and scale. For companies, it’s an opportunity to move beyond transactional giving and toward sustained, strategic impact that’s measurable and meaningful.
But to get it right, you need more than good intentions; you need strong program design, rigorous impact evaluation, continuous monitoring & evaluation, and smart social impact management. That’s where 4th Wheel comes in.
We partner with companies and changemakers to build data-driven, inclusive, and accountable CSR programs. Whether you’re looking to start a CSR fund, design an effective strategy, or assess the real-world impact of your work, our team brings the tools, experience, and insight to make it happen.
Looking to strengthen your CSR strategy or apply for funding? Connect with 4th Wheel today.
