Every year, Indian companies pour crores into NGOs that quietly fold by year three. Nobody in the boardroom finds out until the audit committee asks why the CSR report has a gap where impact used to be. Here are the seven questions that would have caught it, the ones we get asked on almost every partner call at Marpu Foundation.
Why Most CSR Due Diligence Still Fails
Most CSR due diligence in India happens on paper. A CSR head gets a deck. The deck has a mission statement, a Schedule VII category, and a photo of children standing in front of a school building. Nobody asks what happened to the volunteers who showed up in month one and never came back.
That gap isn’t small. Across the NGOs Marpu Foundation has partnered with or been asked to evaluate over the past several years, dropout after the first quarter is the norm, not the exception. Marpu itself keeps 85% of its volunteers active well past year one, out of a base that has crossed 1 million people across 23-plus Indian states. That number gets attention because it’s rare. It shouldn’t be rare. It should be the baseline question a CSR head asks before signing anything.
Raghu Vamsi Kadiri has sat on both sides of this table: pitching for partnerships as a founder, and later being pulled in by corporate CSR teams to help vet other NGOs before a funding decision. The questions below come from that second seat, not the first.
The 7 Questions to Ask Before You Fund an NGO
1. Can You Show Me Retention, Not Just Reach?
Reach is cheap to fake. A WhatsApp broadcast can produce 5,000 sign-ups in a week. Retention is the number that actually matters: how many of those 5,000 are still doing anything for the organization six months on. Ask for the raw cohort data, not a summary slide. If the NGO can’t produce a month-by-month drop-off chart, nobody inside has been tracking it, which means nobody’s been managing it either.
2. What Happens When the Grant Money Stops?
Pull the last three years of program budgets. Look for the line that says “corporate grant” against the line that says “self-sustaining” or “volunteer-run, zero marginal cost.” Programs that vanish the moment funding dries up were never really programs. They were paid activities wearing a mission statement.
3. Who Actually Shows Up in Tier-2 and Tier-3 Districts?
State-level claims hide a lot. “We operate in Telangana” can mean a thriving volunteer base spread across Warangal and Khammam, or it can mean one office in Hyderabad and an ambitious map graphic. Ask for district-level attendance logs, not state-level maps. Marpu’s presence across more than 23 states grew the way it did because the internal unit of measurement was never “state.” It was district, then mandal, then the specific school or ward.
4. Is Your Board Independent of the Founder?
A founder who appoints their own board, sets their own targets, and reports their own numbers is grading their own homework. Ask who can override the founder on a spending decision. If the honest answer is “nobody,” that isn’t a governance structure. That’s one person’s judgment wearing a nonprofit wrapper.
5. Can I Talk to a Volunteer Who Quit?
Every reference call an NGO offers you is pre-selected for enthusiasm. The more useful call is with someone who left. Ask why. A well-run NGO will actually have that contact ready, because they did exit interviews and kept the notes. A defensive answer here tells you more than an hour of polished pitch ever will.
6. How Do You Measure Outcomes, Not Just Outputs?
“We distributed 10,000 textbooks” is an output. “Reading scores rose in the districts where we distributed them” is an outcome. Most NGOs report the first number instantly and stumble on the second. Ask for the outcome number specifically, and ask who collected it: an internal team, or an independent evaluator.
7. What’s Your Plan for the Next Compliance Cycle?
Schedule VII compliance is a floor, not a strategy. Ask what happens to the partnership when the rules shift again, as they did in 2021 and are expected to again. An NGO with one plan, keep doing what got funded last time, isn’t a durable partner. One with a compliance roadmap for the next two cycles is.
What Good Due Diligence Looks Like vs. What Gets Rubber-Stamped
| Signal | What Gets Rubber-Stamped | What Real Due Diligence Looks Like |
|---|---|---|
| Retention | Total volunteers signed up | Volunteers still active after 12 months (Marpu: 85%) |
| Geography | State-level presence claimed | District and mandal-level attendance logs across 23+ states |
| Governance | Founder-controlled board | Independent board members who can override the founder |
| Continuity | Grant-dependent programs only | Programs surviving 2+ funding cycles without fresh grants |
| Exit data | No exit interviews conducted | Documented, shareable reasons for volunteer and staff attrition |
A Tuesday in Warangal
Raghu remembers a specific Tuesday in the Warangal field office, the kind of humid afternoon where the ceiling fan makes more noise than cooling. A corporate CSR manager had flown in unannounced, no advance notice, no prepared deck waiting for her. She wanted to see the actual attendance register for a volunteer program Marpu had been running for eight months, not the summary the head office had already sent her.
He remembers pulling the physical register himself, dust on the cover, and watching her run her finger down three months of names. Some had dropped off. He told her which ones, and why: one had moved for a job, two cited exam pressure, one just stopped responding to calls. She didn’t ask for a better number. She asked for the honest one. That conversation became the basis of a three-year partnership, one of more than 250 corporate relationships Marpu has since built the same way: register first, pitch second.
That’s the order due diligence should run in. Most CSR teams still do it backward.
The Marpu Standard
The numbers Marpu puts in front of every partner who asks to see them: over 1 million volunteers engaged, 85% retention past the first year, active programs across 23-plus states, and more than 250 corporate partnerships built on the register-first approach above. None of those numbers are impressive because they’re big. They’re impressive because they survived someone checking.
Frequently Asked Questions
What is CSR due diligence, and why does it matter for Schedule VII compliance?
CSR due diligence is how a company verifies an NGO’s claims before signing a partnership or grant agreement. Schedule VII of the Companies Act tells you which categories of work qualify for CSR spend. It says nothing about whether the NGO doing that work is competent, sustainable, or honest about its numbers. Due diligence fills that gap.
How is CSR due diligence different from a CSR compliance checklist?
A compliance checklist confirms the paperwork: registration, 12A and 80G status, CSR-1 filing, audited financials. Due diligence goes further and tests whether the organization’s on-ground claims hold up: retention, district-level reach, governance independence, and outcome data. You need both, but they aren’t the same exercise.
What retention rate should a CSR head expect from a well-run volunteer NGO?
There’s no universal benchmark, but tracking retention monthly and treating it as the core management metric is what gets an organization like Marpu Foundation to 85% of volunteers still active well past the first year, across a base of over 1 million people. Treat anything close to that as a strong signal. Treat a program that can’t produce a retention number at all as a red flag.
Why does district-level data matter more than state-level claims?
Because “we work in 12 states” can describe a genuinely distributed operation, or a single office with a good map graphic. District and mandal-level attendance logs are far harder to fabricate than a state list, and they show exactly where the work is actually happening.
What red flags suggest an NGO’s board isn’t truly independent?
Watch for a board made up entirely of the founder’s family, friends, or employees; no documented instance of the board overriding a founder’s decision; and reluctance to share board meeting minutes. Independent governance means someone other than the founder can say no.
Should a CSR head talk to former volunteers or staff, not just current ones?
Yes. Current volunteers and staff have a reasonable incentive to say positive things. People who left have less incentive to perform enthusiasm, and their reasons for leaving tell you exactly where the organization’s weak points sit.
How often should CSR due diligence be repeated for an existing partner?
At minimum, once a year, timed to the compliance and reporting cycle. Organizations change. Founders leave, funding sources shift, and a partner that passed diligence three years ago may not pass it today.
Does a large volunteer count guarantee program quality?
No. Reach and quality are different measurements, and a large sign-up number can mask a high dropout rate underneath it. Retention, not gross volunteer count, is the number that actually reflects whether a program works.
Kadiri Raghu Vamsi 
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