Why CSR Professionals Should Engage Their Legal, Finance, and Tax Teams Early!

While the process of developing, and executing CSR strategy is often focused on identifying the right partners, ensuring employee engagement, and measuring impact, through this post we would like to discuss the importance of engaging your legal, finance, and tax teams as a critical part of this process.

Involving legal, finance, and tax teams in the process may be seen as time consuming or even unnecessary to many CSR managers, but by engaging these teams from the very beginning, you are likely to avoid a number of complications.

Complications that may delay your program.

For example, does your tax team requires a tax-deductible receipt from the NGO partner?  Does the legal team require signed copies of photo wavers before you can produce press release or social media post?

These are just two examples we have recently encountered when working with our clients, and through this post we will share more examples of why engaging your legal, finance, and tax teams early will help to ensure the smooth execution of your programs.

Legal Team

Background Check

For firms that are concerned with the risks associated with supporting a non-profit in China, one of the earliest steps in the process should be to seek your legal team’s support in reviewing the organization’s legal documents and to conduct a proper background check to help identify any risks, previous scandals or other legal issues that the partner may currently be facing.

In our experience, we had come cross partners with problems at this stage.  When this happens, it is always best to first speak with them to find out more.  Sometimes the problems had already been resolved years ago, sometimes it is simply misunderstandings, and sometimes there are problems that could be resolved.

By investigating early on, it allows the company to have a better picture of the situation, and determine if this  organization is the right partner to move forward with.

Partnership Agreement

A second area where your legal team can play a critical role is in supporting the drafting and review of the partnership agreement.

Other than providing standard legal templates, which will help speed up the process, the legal team will be able to ensure that all parties can fully understand the terms, and help amend areas of common concerns.

A process that will not only be of great help to both sides to formalize the partnership, and help clarify the legal obligation for all parties, but also create efficiency by setting standards for similar programs in the future.

Media Right and Photo Waiver

Finally, to ensure your ability to tell the CSR stories properly in a timely manner, your legal team can help you to obtain the legal rights to use event images, partner logos, or testimonials from beneficiaries which you would like to include as part of any press releases or social media posts.

In our experience, it is usually an easy request if done early, and more than likely the legal team already have a template for you to leverage, but without it, you might realize later that none of the great photo you captured during the event could be used.

Recently, we had an incident that the CSR manager had already gained the approval of a migrant school to take a group photo of the students, which intended to be used in a press release.  However, it turned out that this company’s legal team requires each guardian to also sign a waiver, so at the end the photo of the children could not be released.

Finance and Tax Teams

When working to engage your finance and tax teams, you will be relieved to know that the support you need to ask from them is far less complicated than your legal team, but it is equally as important.

Budget Review and Cost Control 

Given their role is to help review, and approve budgets for daily business activities, one of the most important ways they could help you is to ensure that the program budget is right-sized, and to help you identify areas of potential risk.

Certainly, a CSR program budget may look very different from typically business activities, however they will still be in the best position to help you work through any areas of potential concerns, develop processes to reduce risk, help structure year-end assessments and create needed templates to ensure that program costs are fully accounted for.

Payment Process

With many NGOs struggling to manage corporate procurement processes, to better support your NGO partners, we recommend you speaking with your finance team early on to fully understand the process.

By identifying all the documents that they will need to complete the process, working with your partners so that they can successfully complete the required forms, this will ensure that fundings can be received without impacting the program progress.

Donation Receipts

While not all companies require a tax-deductible donation receipt for CSR programs, it is still best to speak with your tax team early to understand your company’s needs.

If a tax-deduction receipt is required, then you will need to check the website of your local tax bureau to see if the NGO partner has been approved for producing such a receipt.  If there are any problems, or if your NGO partner do not understand the process, you can discuss with your finance and tax colleagues to see what should be done.

In Conclusion

After you sign the partnership agreement and transfer the funding, it is important to remember that this is just the beginning of your partnership.

You will need to maintain a regular working relationship with your NGO partner to make sure all the funding will be used for your designated project with the committed timeline and impact.

One of the best ways to do this is to attend related activities, as well as to ask for monthly, mid-term, and final reports including the financial reports.  You should also make sure to share updates with the teams that supported your program.

Keeping your colleagues engaged throughout the program not only can ensure their ongoing support, but more importantly, they will take pride in knowing that their collective efforts had helped support the community in need, and that makes all their hard work meaningful!


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