CSI gains momentum
Has also become more focused on achieving developmental ‘impact’
AS MORE AND MORE COMPANIES make corporate social investment (CSI) a corporate and strategic priority and approaches to CSI become more professional, structured and performance driven, CSI in South Africa is slowly but surely gaining momentum, says CSI Handbook editor Heather de Wet.
Overall CSI funding has grown steadily in the last 10 years, with an estimated R2,88bn allocated to CSI budgets in the 2005/06 year.
Says De Wet: “Not only has corporate giving increased, but it has also become more focused on achieving developmental ‘impact’, and funders are far more strategic about how and where they apply funding.”
With regard to the latest CSI trends, De Wet believes that the business operating context in contemporary SA is one where large companies are expected to contribute to socioeconomic transformation and to be part of the solution in addressing the challenges associated with poverty, unemployment and skills shortages. The BEE Codes, gazetted in February, make it mandatory for large companies to spend 1% of NPAT on socio-economic development (SED).
“As CSI has become more of a corporate priority, the sector has become more professional, structured and performance driven. It has definitely become more strategic, with companies expecting a return for their rand both for beneficiaries and for the company itself. Companies are also recognising the value of aligning their CSI programmes with core business to achieve maximum return.”
Strategic CSI programmes are more formal
in their approach and are guided by a CSI strategy that’s aligned with core business and has buy-in from top management and the board. These programmes tend to be run by a dedicat- ed department or Foundation, with professional CSI staff members and have a clearly defined budget. A successful programme is likely to have well-defined focus areas, guidelines for best practice and indicators for measuring effect, she explains. “However, we must be careful not to conflate ‘successful’ – in terms of a well-run and managed CSI department – with effective,” she cautions, noting that one of the big weaknesses in the CSI sector at the moment is the lack of rigorous measurement of development outcomes, especially over a period. In other words, a programme may be spending money and running well, but its actual effects are not recorded or evaluated. Another issue is that notions of what’s effective may also vary.
De Wet believes that companies that select a few flagship programmes, where they concentrate resources and expertise and consolidate relationships with service providers and beneficiaries over time, are more likely to get a return on their developmental spend. If companies support causes that are in some way aligned to their business, it’s also easier to maximise non- financial inputs, for example time spent mentoring.
“One of the biggest challenges ahead is measuring outcomes and for this companies need to engage in developing more effective measurement tools. The CSI sector as a whole also needs to become more cohesive, finding mechanisms to communicate, collaborate and to share developmental knowledge and replicate successful models,” says De Wet. An overwhelming majority (86%) of corporate CSI departments would like to collaborate with other corporates, yet in practice corporate collaboration in the CSI sector is weak, says De Wet.
Though there’s no doubt that the CSI community is doing innovative and ground-breaking work in some areas, it’s hard to compare it to other countries because our context is so different, she adds. It’s the only country in the world where CSI or aspects of CSI are codified and this brings a different imperative and dynamic into the sector.
“At the moment, it’s unclear exactly how the SED element of the BEE Scorecard intersects with CSI. This needs to be clarified. It would be a great pity if excellent work in areas such as health or education was sacrificed in pursuit of point-scoring activities,” says De Wet.
One of the biggest challenges is measuring outcomes. Heather de Wet