Changing Dimensions of Laws on Economic Support to non-profit Voluntary Organizations from Land Grants, Donations and Dharmada to Corporate Social Responsibility


The contribution made by Non-Profit Voluntary Organizations (NPVOs) towards the cultural and socio- economic life of any country, is substantial. They (NPVOs) consist of charities, public trusts, temples, mathas, waqfs, churches, viharas, registered societies, cooperatives, non-profit companies and such other foundations and organizations involved in social services. The objectives promoted by them include better access of the vulnerable sections to food, health, education, shelter and better facilities in places of worship. In a multicultural country with pervading historical experiences for several millenniums, the socio- cultural significance of NPVOs is immense.

For the effective functioning of the NPVOs, economic support is the life blood. Great changes have occurred in India over the years in terms of the types, methods and extent of such support. From the ancient to the modern times, support in the form of gift of land and finance has enabled the NPVOs to get involved in varieties of social service activities including religious, cultural, educational, and medical services for the devotees, the poor and the needy. The NPVOs have relied on grant of land not only for their establishment and functioning, but also for the continuous income accruing from land and building. With the decline in land grants or emergence of land reforms, divesting tenancy or bringing expropriation of land in excess of ceiling limits,donation of money and movables formed a major economic source. A share in the business transaction borne by the customer, called dharmada, was another source.

With the emergence of corporate social responsibility (CSR), systematic application of a certain portion of corporate income shall be channelled to recognised social welfare objectives. CSR being a new tool of connecting the corporate world to the ethics of charity, has been experienced to be complex because of the possibility of sidelining the NPVO through their direct action whereas social expectations about proper coordination of corporate body, NPVO and the beneficiaries remain unfulfilled. It is also not certain whether the most required charitable heads and traditional objectives are properly addressed by the list of permissible CSR contributions, and whether the NPVO dynamism is adequately supported.

The shift from donation of land to donation of money or movables, and from the microscopic practice of dharmada to large scale CSR, is not a simple shift. It is a seismic shift of legal concepts: it is a shift from the system of individual donations to collective donations. It involves a shift in mindset as well. Turbulence arises in situations of imbalances when collectivism is at loggerheads with individual rights or competes with traditional collective rights. The implementation of constitutionally enshrined goals of distributive justice and agrarian reforms has an inevitable impact of stimulating such shifts. But lack of clarity in coordinating and streamlining the efforts has produced practical problems. Recognition of minority educational institutions’ right to exclude non-minority disadvantaged sections from benefits of charity is another source of turbulence.

Diversity of charity law and haphazardness in their operations even in the face of uniform standards of human rights and welfare policy, have added to the complexity. The great promises and expectations revolving around CSR need to be examined from functional perspectives, socio-economic justice, community’s preparedness and pragmatism.

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