Corporate Social Investment is an integral part of modern business but choosing the right beneficiaries is crucial. Fundraising experts weigh in
Corporate social investment has undergone considerable change since it was first introduced in the 1950s.
Where before CSI projects were viewed as being largely reactive and sporadic, they are now an integral part of company operations aimed at benefitting both the business and community in which it is based.
As an indication of its growth, in 1998 total estimated nominal CSI spend in South Africa sat at R10.5 billion but swelled to t R11.8-billion according to the latest report by ESG specialist Trialogue.
Last year’s non-cash giving sat at 83%, compared to 77% in 2022, with basic materials (mining, water, forestry, and chemicals); consumer services (retail, media, travel, and tourism), and the financial services sector being the tree-top contributing sectors.
Out of the most supported development sectors, education averaged 48% of CSI spend, with 78% of companies involved. Education (56%) and social and community development (65%).
As CSI initiatives have evolved, the process has become more strategic and formalised. What has become clear is that If companies are to create maximum impact to make their brand known and trusted in the community, they need to ensure their beneficiaries are of the sort which can make a tangible difference in society.
Melanie Jackson, owner of Words that Count, a South African fundraising consultancy, explains that in many of the bigger companies, the process of selecting CSI partners is governed by a selection committee, guided by its CSI team, who will undertake due diligence of each partner before proposing them to this body.
“They might ask for additional information and documentation such as NPO certificates and founding documents like constitutions or Memorandums of Incorporation and financial statements. Candidate organisations are then shortlisted and the committee makes a selection based on which has the greatest potential for impact,” she says.
According to Jackson, many companies stand out for their CSI programmes but the JSE-listed large corporations have the resources to manage their CSI programmes effectively, accepting requests for funding year-round and being in a position to respond to each request, regardless of outcome. “One of our biggest challenges is that once the funding proposal is sent to the prospective donor, we are at their mercy when it comes to feedback. It’s always such a relief to receive communication, even if it is not good news, because it enables us to close the loop on the request.”
She points out that other family-owned businesses have opted to create philanthropic trusts and foundations to drive their projects and, in the Western Cape, in particular, these have become an excellent source of funding.
“This straddles a corporate foundation and an individual philanthropic trust, so this is sometimes difficult to pin down as being corporate giving. But it is certainly a way for donors, especially those deriving income from potentially controversial products like alcohol and tobacco, for example, to distance themselves a little from the product w
hile still being able to support causes they are passionate about.”
Tanya Townshend is the fundraiser for Home from Home, an organisation that provides and supports family-style foster care to orphaned, abused, neglected and vulnerable children in Cape Town.
Home from Home receives funding from corporates to support its four programmes – Education, Therapeutic Intervention, Evelyn Connolly Transitional Support, and Reunification.
By developing a loving and caring environment, where positive relationships with ‘siblings’ and foster parents are created, these programmes can prove effective in remedying other disadvantages the children may have encountered.
Townshend says CSI considerations are typically made in the earlier part of the financial year when companies plan their CSI investment programmes.
“Strategic points in a company’s operation also impact CSI investment. That is always something we need to consider,” Townshend says.
From the NPO’s perspective, Jackson says, there is “no time like the present” to start engaging corporates for funding.
While the last few days of the tax year and the potential for the low-hanging fruit of unspent CSI funding are inviting, the reality is it is becoming increasingly competitive to secure it.
“It also takes time to win over a prospective donor, whether an institution or individual. The average is 18 to 24 months to secure a new grant.”
Jackson adds that corporates are made up of individuals, meaning that the “rules of engagement” also apply: “Look at what they are passionate about, what keeps them up at night and how they like to be acknowledged.
“The sooner you start engaging, the sooner your pipeline will start to work for you.”
