Funding India's sport transformation
Indian Prime Minister Narendra Modi has clearly articulated that Corporate India has to contribute aggressively towards building a nation of the future. Obviously, he worries that close to 40% of India’s population is under the age of 20 years and therefore there is a need to channelize youthful energy to creative pursuits.
While the Sports Ministry in India has initiated a few policy changes and launched the ambitious Khelo India Program, much more needs to be done. If India has to build itself into a sporting nation and institutionalize the outdoor habit, India needs an innovative approach towards funding this movement.
Government's role in sports development is limited
In 2017, India spent roughly INR 3,200 Crores (USD 500 million) on sports infrastructure & training through its annual Union & State Budgets. Compare this to the United Kingdom’s (UK) spend of INR 9,000 Crores (USD 1.5 billion) and one will appreciate why UK won 67 medals at the Rio Olympics & India won only 2 medals.
With the Finance Minister, stretched between the many priorities of a developing economy, the Indian Government can only spare so much money towards sports development. And this is where Corporate India needs to step in.
Corporate role in sports development needs to evolve further
Over the last decade, Corporate India has seen merit in leveraging sports through association. And this association has today moved beyond cricket to other sports such as Badminton, Wrestling, Hockey, Football & Kabaddi. In 2017, Sports advertising spend was 12% of the total advertising expenditure of INR 61, 233 Crores. Sports sponsorship rose to INR 7,300 Crores in 2017, a growth of 14% over the previous year.
The spend was categorized across 5 broad categories including - Ground Sponsorship, Team Sponsorship, Franchise Fee, Athlete Development, Media Spend. While this meets the commercial interests of sports development, it only benefits a few. Corporate India has to deliver a bigger and more significant impact.
Grassroots sports development focus is severely limited
However, the point to be noted here is that not even a minuscule component of this spend is going towards grassroots sports development, be it building awareness, promotion, participation, infrastructure, competitive platforms, services, programs, athlete & sports ecosystem development.
If we have to emerge as a dominant sporting nation, we have to start supporting Sports through Corporate CSR funds.
Sports delivers strategic benefits to all stakeholders
Corporate India will soon realize that “Purpose alongside Profit” delivers a lasting corporate legacy, tangible social benefits, patronage & reputation and deeper community engagement.
Increasing consumers are becoming averse to buying products and services from companies that display a narrow profit-centric orientation.
Research available in the public domain indicates that Corporate India spent about INR 9,500 crores on fulfilling their Corporate Social Responsibility (CSR) Objectives, of which only about 1% was allocated to Sports Development across 4 categories - Olympics/ Paralympics, Rural Sports, Youth Development & Sports Infrastructure.
Barriers that prevent the deployment of CSR funds in sports
Corporates I speak to are keen to support this direction but stop short of calculating the financial return on investment. Committed organizations, on the other hand, view this as a way of transforming lives and sustainable community development and measure the social returns on investment.
In addition, limited understanding of the impact through sport, access to professionals to guide and advise on sports, lack of a unified agenda on sports and the fact that no one internally championing the case for sports are other factors that prevent corporates from exploring this direction.
Building a sporting nation
This may sound radical to some ears, but it's one way to fund sports development in India and meet many social objectives in order to drive in one unified direction towards building a sporting nation.
Broaden the policy definition for greater social impact
#1 Encourage corporates to combine themes with sports such as Education, Skill Development, and Women’s Empowerment. This will ensure leverage across themes and drive a balanced focus
#2 Promote corporate interest by broadening the definition of sports under CSR to include new categories such as sports manufacturing, import of sports equipment, sports technology, broadcasting, incubating iconic sports platforms in India or hosting global sports platforms in India, sports education and sports conferences
#3 Incentivize corporates by providing slab-based tax holidays, incentives and rebates for sports categories and spend amounts above a certain amount in one calendar year and/ or over a defined time period.
#4 Incubate the national sports development fund (NSDF) - This would include a ten point agenda:
(1): Initiate a policy diktat that stipulates that all companies in India that fall within the ‘2% average profit rule’ have to allocate X% of their CSR spend to Sports ensuring that the average contribution over a 10-year horizon is at least 10% of the total budget over the same time period.
As per estimates, Corporate India’s CSR outlay is scheduled to rise to about INR 15,000 Crores by 2022. Assuming 10% contribution towards sports would mean an additional INR 1,500 Crores available for sports promotion & development.
(2): Each year, the Indian Government through its union & state budgets will also be required to contribute 10% of the total kitty, to this fund.
(3): This would constitute the ‘National Sports Development Fund’.
(4): A percentage of the total NSDF will be specifically allocated towards campaigns aimed at building awareness about sports and towards generic sports promotion
(5): A five-member fund management team will be constituted to manage this fund and guide distribution of funds as per the framed fund charter and long-term sports development plan.
(6): The sports development plan will be built around objectives & impact, themes of development, sports coverage, time periods, regional coverage, athlete support, services & ecosystem support. Corporates will be allowed to choose a combination that delivers their objectives of the association. This will ensure consolidated monies across corporates aligned to big themes and a structured plan towards implementation.
(7) Members will include prominent sportsmen eminent business professionals and one government ministry representative. This team will be autonomous and work independently with full public accountability. Each team member will have a three-year team but can be rotated out based on fund performance.
(8): The money contributed by each corporate to this fund will be converted to credit points as per some conversion measure. In lieu of these credit points accumulated by the corporate over a 5 year period, central and state benefits will accrue. In addition, these credit points could be bartered between any two corporates to exchange goods and services.
(9): All money contributed by a corporate to the NSDF against a theme, say athlete development will be spent along the same theme with branding benefit and credit aligned to the corporate.
(10): A awards platform will be created and called Purpose & Sports to recognize the varied contribution under different categories to encourage the 'giving momentum' in Corporate India.
Significant and sustainable impact on sports development
Ensure alignment between sports development priorities, a structured and planned approach towards both design and implementation, unify action and efforts across different groups, national accountability and deliver a ‘bang for the buck’ in both the short & the long term.