With regular strikes rocking South Africa, important questions have been raised about corporate social responsibility and investment – how and why the private sector gives cash to the communities in which it operates.
“We are moving from philanthropic conceptions of corporate social investment (CSI) towards thoroughly thought-out and planned CSI initiatives that encourage accountability and learning over time,” says Dan Maré, communications manager at Tshikululu, a CSI management agency that implements projects on behalf of clients’ grants and trusts.
“The concept of ‘social return on investment’ is being hotly debated. Monitoring and evaluation of programmes, if intelligently incorporated into funding strategies, leads to increased focus, accountability and an improvement in the ability of the programme to lead to positive impact,” says Maré.
“Individual funders will have their own strategies, which take into account the nature of the parent company’s operations, their geographical location, the expertise of their appointed trustees, their perception of the development sector in which they plan to work, and state and international priorities — such as the United Nations’ Millennium Development Goals,” says Maré.
“There is certainly a widespread desire to work together towards a common cause. That is why we see so much excitement in the CSI sector about the National Development Plan. It is a coherent national vision that encourages more focused, co-ordinated initiatives and co-operation between funders.”
Maré adds that the most common guideline of a company’s CSI budget was 1% of net profit after tax. “Many companies exceed this amount — mining companies, in particular, have requirements relating to social and labour plans which bring their social spending to well in excess of 1%.”
Sello Hatang, CEO of the Nelson Mandela Centre of Memory, says communities are critical of one-off interventions and wanted sustainable, long-term relationships.
“With relationships, communities can access knowledge, skills and connections. Greater capacity is transferred. For the company, staff can get involved and be aware of the needs of their clientele beyond consumption of their goods, and connect with people. Eventually this eliminates dependence.”
Gavin Price, a senior lecturer at the Gordon Institute of Business Science, says that pet projects that were not strategic or integrated ought to be avoided.
“Companies act in society and, from that point of view, CSI becomes enlightened self-interest. Investing today means ensuring demand for products in the future because you’ve contributed to the community’s earning potential. However, companies don’t provide enough of a horizon for a return on their investment.
“Companies should engage more with all their stakeholders on CSI issues, because they get indirect benefits. It’s brave to put these concerns ahead of the demands of shareholders and their desire for performance, but you can go beyond the minimum requirements.
"If you know what you want and you have milestones, and can report on them realistically, then the stakeholders will be more appreciative. But this takes time and understanding, and people in CSI don’t always have strategic insight to make it central to the company. It’s minimised and not given central prominence. It should be the steering wheel, not the fifth wheel,” says Price.
