Factors influencing Corporate Social Responsibility spending in Kenya a case study of NSE 20- share index companies

Abstract

Discussions revolving CSR have been on the rise, due to the increased need of business entities to be mindful of the environment in which they operate. This research was therefore conducted with an aim to determine whether the existence of tax incentives, and profitability of a company, influence a company's willingness to spend its funds on CSR projects. It also aimed to investigate the challenges faced by companies willing to invest their funds in CSR projects. The research utilized a descriptive analysis research design, where the data collected was analyzed using value such as mean and standard deviation, and a test for reliability was also done using Microsoft Excel. The study found that tax incentives and profitability of a company, are drivers of CSR. It also proved that creating a balance between the expectations of shareholders and those of the society, financial inadequacy, the value system of managers and owners of companies, pose as challenges to companies willing to take up CSR projects. The study recommended that the government should investigate the economic value of CSR incentives, not only tax incentives, since the research has established that companies would more likely spend funds on CSR projects if CSR was incentivized, rather than regulated. Research should be done on measures which companies can take, to manage the expectations of the shareholders and those of the society, to create a balance. Companies should also find alternative ways of being socially responsible, that are not financial, such that even profits are low, the companies still fulfil their duties to the society.