Paper short abstract:

We investigate the process by which Corporate Social Responsibility Foundations (CSRFs) allocate funds to non-governmental organisations (NGOs) and their own projects, the rationales and metrics used by CSRFs to monitor projects, and their external accountability mechanisms.

Paper long abstract:

Globally, concerns have gradually shifted from whether companies ought to engage in CSR or sustainability projects to a debate focused on the effectiveness and impact of the projects in delivering substantive social change. Although in-depth research has been gradually emerging in respect of the internal operations and logics of CSR practices and/or from a developing country context, the research seeks to contribute to the scant empirical evidence by examining how non-profit foundations select, monitor, fund and provide accountability for, CSR projects in developing countries;

This study is motivated by the decision of the Mauritius government to implement a rather unusual policy of compelling companies to pay a Corporate Social Responsibility (CSR) 'levy', thereby committing them to spend a minimum amount on CSR projects or otherwise pay the funds in the form of general taxation. This policy largely contributed to the creation or expansion of local CSR Foundations, as separate non-profit entities which would implement CSR projects using the proceeds of the levy on behalf of the donor companies.

Overall, our data reveals that CSRFs demonstrated a strategic and structured approach to the selection of projects in line with the expectations of the CSR levy. Yet, the management control and monitoring process by CSRFs is relatively unsophisticated and is to a large extent driven by (narrow) concerns about financial accountability and probity. External accountability and transparency are relatively minimal in nature and this is quite surprising in light of the significant funds invested over the last 5 years.