CSR Impact Assessment: When It Is Mandatory and How to Do It Well
Which companies must commission CSR impact assessments, the cost limits, and how to design an assessment that measures outcomes, not just outputs.
The 2021 amendments to the CSR Rules made independent impact assessment mandatory for larger CSR spenders. Done well, an assessment is far more than a compliance exercise. It is how a company learns what its money actually achieved.
Who must do an impact assessment?
A company must commission an impact assessment if:
- its average CSR obligation is ₹10 crore or more over the three immediately preceding financial years; and
- the project has an outlay of ₹1 crore or more and was completed at least one year before the assessment.
The assessment must be done by an independent agency, and the report is placed before the board and annexed to the annual CSR report.
Can the cost be counted as CSR?
Yes, within a limit. Spending on impact assessment can be counted as CSR up to 2% of total CSR spending for that financial year or ₹50 lakh, whichever is higher.
Outputs versus outcomes
Many assessments stop at outputs: how many children attended, how many kits were distributed. Real impact assessment asks what changed:
| Output | Outcome |
|---|---|
| 500 children enrolled in a reading programme | Share of class 3 children who can read a class 2 text, before and after |
| 50 anganwadis equipped | Change in stunting and underweight rates among children under 5 |
| 1,000 youth trained | Share placed in jobs, and their earnings six months later |
Five principles for a good assessment
- Plan it on day one. A baseline taken before the project starts is essential.
- Choose a few meaningful indicators rather than dozens of activity counts.
- Use a comparison where possible, such as similar villages or schools without the programme.
- Listen to communities. Combine numbers with interviews and focus groups.
- Report honestly, including what did not work.
Every Orvys programme is built with a baseline, outcome indicators and an independent endline study. See how we work.
