Social Responsibility as Marketing: Opportunities and Pitfalls

When I met with Ajay, the current director and CEO of Sahayata Microfinance, about how he envisioned the future of Sahayata Livelihoods (the nonprofit that I have been working for), the first thing he told me was, “I want to retain my customers.” This fell in line with the spiel that my supervisor gave me on my first day at Sahayata Livelihoods about the reasons why Sahayata created a nonprofit entity. “As Sahayata Microfinance grows, it will attract more attention from the media, and Sahayata Microfinance will be expected to have given back to society. We have to show people that we aren’t just taking money but are also doing something for society.” Microfinance has become a competitive industry, and potential customers now have a variety of options to choose from when taking out a loan. Sahayata Livelihoods is meant to set Sahayata apart from the rest.

If there is no intrinsic motivation to give to society, at least the idea of “social responsibility” seems to have become enough of a norm that for-profit companies feel the need to engage in activities that benefit society. Furthermore, for-profit companies like Sahayata view “doing good” as potentially profitable because it can create goodwill with their customers. Perhaps the government incentives for social enterprises that I alluded to in my last post can be replaced by societal expectation?

The danger of using a nonprofit as a public relations mechanism, however, is that the incentive is to only create programs that look good and can provide quick results and to avoid spending money and time on conducting proper assessments to test the efficacy of the programs and revise the programs accordingly. Last week, Sahayata Livelihoods held a preventative dental checkup for women and children in one of the slum areas in Udaipur. Four dental students from the local dental college arrived in a yellow bus as Suresh, the Sahayata Livelihoods employee responsible for organizing the event, pulled out chairs from locals’ houses and transformed the area of the slum that usually served as the children’s unofficial playground into a hastily-made dental clinic. A large Sahayata Livelihoods banner hung in the background; where the banner should be placed generated much more attention than other important administrative matters that day. There was very little documentation of which patients underwent checkups and what the diagnosis and follow up for them were. Sahayata Livelihoods wants to expand this preventative health program to 10,000 women within the next twelve months. Similarly, it plans to expand its financial literacy program (which our team is working to assess and reform) to reach more than 15,000 women across Rajasthan within the next year without having conducted any systematic assessment of its pilot financial literacy program. Sahayata Livelihoods has an ambitious plan, but as of now, it only has three employees, only one of whom is employed full-time.

I do not mind if we are working for a nonprofit that was meant to provide good PR to its parent company, as long as that nonprofit is doing good work. However, if PR is the only reason for Sahayata Livelihoods’ existence, then it seems like the incentive to create programs that look good on paper but whose efficacy is questionable at best is almost unavoidable. Their efforts can begin to mirror those of organizations like the Rotary Club, which often make a lot more fuss over taking pictures and publicizing their good deeds than understanding and creating sustainable programs within communities.

Rotary Club's Mewar Chapter President hands a child in the village school that my host mom teaches at some notebooks donated by one of the Rotary Club's members.