Why spending on CSR can be good for your startup?

This guest column is by Mahesh Nair, Co-Founder PicsDream

Over the years, CSR activities have been a vital component of the business strategy for large companies that spend millions of dollars every year on it. But now, startups too are realizing the advantages of associating themselves with the right social or environmental causes to boost their own prospects.

While startups undertake a slew of measures to get noticed in the market, it’s only now that they have started looking at CSR activities as not just another mandatory spend stipulated by the government, but more as a great way to build a brand for themselves. As a result, they now look at CSR initiatives as an investment in the company’s brand and not an expense.

Microsoft invests billions of dollars in CSR activities every year. The software giant has backed many non-profit organisations and even asks its employees to spend a certain number of hours each month on volunteering for activities that are close to their heart. Google’s Green program is another powerful initiative that is aimed at companies becoming more reliant on renewable sources of energy.

Indian companies are also coming forward and adopting CSR initiatives within their organisations. A recent report by Crisil revealed that young startups are investing more than large cap companies in CSR activities in order to build their brand value. In the Chennai floods last year, Ola provided boats to people stranded in the waterlogged areas to reach safe zones while Zomato distributed free food. These companies have no problems in giving back to the people and their efforts helped them gain better visibility and goodwill in the market.

ola boat

(Source: Economic Times)

Given below are some key benefits that startups can derive by investing CSR:

Brand building

Corporate social responsibility can help startups in building their brand awareness and equity. It also gives them an opportunity to get good media coverage from the otherwise elusive media and come into the limelight.

Helps boost sales

Customers are now becoming increasingly aware about whether businesses are following ethical work practices, and their buying decisions are greatly influenced by such companies. Customers have now started to prefer those companies who are willing to work on global, social and environmental issues.

A recent study had revealed that 45% of customers are willing to spend more on companies that have proved to be significantly active in corporate social responsibility.

Makes the company more attractive to investors

Startups, which make CSR activities a part of their culture, become more attractive to investors. It helps in building confidence in the company from investors, customers as well as other major stakeholders.

Can provide more value to employees

Many Indian startups have reaped benefits with their CSR initiatives, for e.g. Cab sharing service Ola that has been trying to outpace Uber in India, has launched a special initiative for its drivers and provides them with education in partnership with Avanti learning centres. This initiative will provide value to the company’s drivers and will lead them to partner with Ola instead of Uber.

Another startup, BookMyShow, has announced a new CSR initiative under which it will give an opportunity to the underprivileged youth to work as an intern with the organisation and get organisational experience.


Corporate social responsibility is good for all businesses, across countries. Cash crunched startups don’t have to invest a lot in CSR activities. They can simply volunteer time for social and environmentally secure activities, which are relevant for the business. This way the startup is giving back to the society while opening up new avenues for itself.

Moreover, it is a great way to get publicity without having to spend an exorbitant amount and gain the trust of customers, employees, investors and other stakeholders in the ecosystem.

While the returns may not be visible immediately, an investment in CSR will add immense value to the company in the long run.

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