On 18 February at the World Corporate Social Responsibility (CSR) Congress in Mumbai, Soumitro Chakraborty, CEO of Innovative Financial Advisors Pvt Ltd (Fiinovation), was the toast of the town. The Congress focused on companies helping implement sustainable development goals in health, education and the social sector. That night, Chakraborty won the ‘CEO of the year’ award for Fiinovation’s work in the social development sector.
This was hardly a coming-out party for Chakraborty. Indeed, the bespectacled CEO and his Delhi-based organisation have frequently been conferred with a number of CSR-related awards. Already a decade-old, Fiinovation calls itself a fundraising consultant firm—helping non-profits raise CSR funds from corporates.
Fiinovation’s rise to prominence in the CSR space coincides with the government’s 2014 mandate that companies spend 2% of their three-year average annual net profit on CSR activities each financial year. This is applicable to firms with at least Rs 5 crore ($730,000) net profit or Rs 1,000 crore ($146 million) turnover or Rs 500 crore ($73 million) net worth, starting in the year ended March 2015.
Ever since then, CSR funding has snowballed. According to estimates by ratings agency CRISIL, CSR spends by Indian corporates in the four years since the government mandate crossed the Rs 50,000 ($7.3 billion) crore mark earlier this year.
And as this pot of CSR gold grows larger, it presents an opportunity for shrewd firms like Fiinovation looking to be the go-between in these interactions between the worlds of commerce and social work. Fiinovation’s revenue grew by 13% in the year ended March 2018, clocking in at Rs 9 crore ($1.31 million).
But even as revenues grow and accolades come thick and fast, there is a rising tide of accusations against Fiinovation. Small, disparate organisations across the country claim that Fiinovation signed agreements with them to raise CSR funding, but never came through. The upfront payments—the company charges a 10% commission, of which 4% is paid in advance—made to Fiinovation were, in many cases, never returned.
According to a list accessed by The Ken, somewhere around 5,000 organisations have faced similar issues. The list was shared by a former company insider who requested anonymity. The Ken could not independently reach out to each one of them, but of the thirteen we reached out to, all told a similar story—Memorandum of Understanding (MoU) signed, no funds raised. Only two of them got a refund of commission.
The Ken also has a copy of the police complaint filed against Fiinovation by one of the organisations—Samekit Jan Vikas Kendra, a Christian non-profit based in Jharkhand. In addition, The Ken has accessed a letter sent by 35-year-old NERD (Non-conventional Energy and Rural Development) Society, Coimbatore, as well as a copy of the MoU and receipt issued by Fiinovation to Tarapur Social Development Society (TSDS), West Bengal.