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LOCAL AND GLOBAL PERSPECTIVES

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Celebrating strategic CSI For CSI to be strategic, it must have positive developmental impact that is aligned with and contributes to the priorities of the business, beyond reputational impact. The Trialogue Strategic CSI Award recognises projects that exemplify best practice. It aims to encourage CSI practitioners to think more strategically when planning and implementing their initiatives. Learn more about what constitutes strategic CSI and find out about the recipient of the 2017 Award – Clover Mama Afrika.

Beneficial Beneficial outcomes impact Visible outputs No visible benefit

TRIALOGUE’S CSI POSITIONING MATRIX

SOCIAL BENEFIT

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s can be seen in Trialogue’s CSI Positioning Matrix below, strategic CSI projects deliver a high combination of positive social and business outcomes. While developmental CSI offers beneficial social outcomes, it does not always have significant corporate benefits. Similarly, commercial grantmaking prioritises corporate benefit over social return.

Developmental CSI

Strategic CSI

Charitable grantmaking

Commercial grantmaking

No visible benefit

Stakeholder benefit

Recognition of contribution

CORPORATE BENEFIT

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THE BUSINESS IN SOCIETY HANDBOOK 2017

Competitive benefit

About the judges CELEBRATING STRATEGIC CSI

Dr Stan Hardman is an educator, academic, researcher and consultant. In his position as programme designer at The Leadership Dialogue, he develops and manages specialist programmes in leadership development. His work focuses on situations of human complexity that require holistic solutions. His particular interest is in social partnerships involving communities, business and government that create social capital while finding practical solutions to embedded problems. Anthony Wilson-Prangley lectures in the area of leading social change, with emphasis on the dynamics of leadership, human behaviour and diversity. He has experience in the areas of business in society, social entrepreneurship and public leadership and helped to build the Centre for Leadership and Dialogue at The Gordon Institute of Business Science. The centre focuses on the context and capacities required for leading complex societies. His professional interests include the study of democracy in countries in transition, social change in the contemporary era and active citizenship.

Judging criteria Each entry is judged against objectives, social benefits and corporate benefits, as set out below.

Objectives Targets need to be practical and realistic. Entries should have ‘SMART’ (specific, measurable, relevant and time-bound) objectives. Social benefits Visible outputs: Short-term results that are immediate, visible and concrete (e.g. number of houses built, people trained, supplies or pamphlets distributed, community members treated, hours of service delivered). Beneficial outcomes: Specific changes in behaviour, knowledge, skills or wellbeing. Medium-term developmental results that are the consequence of achieving a specified combination of short-term outputs (e.g. behaviour change, attitude change, new knowledge or skills, improved grades, reduced isolation, improved access to health services, improved self-esteem). Beneficial impact: Broader long-term (three years or more) consequences of the project. Community, society or system-level changes that are the logical consequences of a series of medium- and short-term results (e.g. improved effectiveness of education system, reduction in HIV prevalence, new social norms, more educated/healthier population, inclusive decision-making, lack of stigma, increased capacity). Government engagement, lesson-sharing and advocacy are also taken into account.

Corporate benefits Recognition of contribution: Recognition of the project that improves the company’s reputation. This can include recognition of expenditure as socioeconomic development in line with the BBBEE scorecard, as well as internal and external communication of the project. Stakeholder benefit: Meaningful engagement with key stakeholder groups in the funding, design or management of the project that improves the company’s relationship with that stakeholder group. Stakeholders can include communities, regulators, government, suppliers, customers or employees. Competitive benefit: Project benefits that enhance the competitiveness of the business. This can be done by securing a licence to operate, opening up new markets for the business, introducing new products, reducing costs by developing suppliers and/or leveraging corporate resources, or securing specialised talent. Entries for 2018 will open at Trialogue’s mid-year Business in Society Conference. Previous entrants are welcome to resubmit tweaked applications if they have compelling projects that speak to the criteria. Entries should explore what makes CSI unique in South Africa and, more broadly, in developing economies as it relates to national companies, state-owned enterprises and multinationals with a footprint in South Africa. For more information, please email [email protected].


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Clover Mama Afrika: Winner of the Trialogue Strategic CSI Award 2017 Inspired by the African term for the universal concept of ubuntu – a shared humanity – since 2004, the Clover Mama Afrika initiative has fostered a spirit of caring, protection of vulnerable groups and the development and transfer of income-generating skills in low-income communities across South Africa.

201WINNER 7

Project ambassadors or ‘mamas’ are women who have already positively impacted their communities and who are passionate about empowering others to become self-sufficient. These women are trained with skills such as cooking, baking, sewing, crafts, haircare, welding, food gardening and business and financial management, and are then required to pass these skills onto others in their communities. They also receive the necessary equipment and infrastructure to create local industry centres, based on their honed skills. When comparing the investment in Clover Mama Afrika since the project’s inception, to the income that project participants have generated, return on investment stands at 116%. Over 30 blue chip partners have joined the project, which has contributed to its success. Site visits are conducted regularly to ensure the smooth running and sustainability of the centres. Clover staff are kept informed about the project through the InCLOVER newsletter and have the option of getting involved, helping to boost staff morale and cultivating a sense of community. TOTAL COMPANY EXPENDITURE ON PROJECT TO DATE

>R47 MILLION 43 MAMAS APPOINTED IN COMMUNITIES NATIONWIDE

>R64.5M FEEDBACK FROM THE JUDGES The key question is how this project links to the core business objective. At the obvious level, there is a focus on cooking and baking in which milk is a core ingredient. At a deeper level, Clover is representative of a vast agricultural industry with deep rural roots where far more work opportunities are afforded to men than women. Thus, the project addresses a gender issue, an economic issue and, moreover, a social issue in relation to wellbeing realised through participation in enterprises. Further, the project is a mature one and is recognised by numerous partners to the dairy industry, thus enhancing its impact. This entry was the best example of developmental CSI, with some excellent leveraging to ensure appropriate company benefits in the form of employee engagement, strengthening of client relationships, BEE and brand development.

WORTH OF PUBLICITY SINCE 2004

140 INCOME-GENERATING PROJECTS CREATED

2042 INDIVIDUALS COLLECTIVELY TRAINED

358 Sewing has always been a great passion for me and I was proud to have been trained ❛❛ through the Clover Mama Afrika project. All the hard work has enabled me to start on my own and, with the support of Clover Mama Afrika, I can only grow from strength to strength.

Mama Yvonne du Preez started working in the Oasis Skills Centre in 2008, transferred her skills to five people and currently employs two women.

PROJECT PARTICIPANTS PERMANENTLY EMPLOYED

182 CENTRES ESTABLISHED TO DATE

Sexual Assault Clinic Healing through compassion

The Sexual Assault Clinic, a non-profit public benefit organisation, is based in Benoni and offers all-inclusive medico-legal and psychosocial services to children 12 years and younger who are victims of sexual or physical assault or neglect. We personally attend to children from anywhere in the Gauteng province and receive telephonic enquiries from all over South Africa.

Medico-legal The Sexual Assault Clinic specialises in attending to victims under 12 years of age. Our highly experienced forensic nurse performs medical examinations, collects DNA samples, photographically records all injuries, completes the relevant Department of Justice (DoJ) and South African Police Service (SAPS) forms, and testifies in court. The service is available 24/7.

Paralegal and supportive assistance The Sexual Assault Clinic provides consultation on procedures pertaining to child abuse and assists with the required DOJ and SAPS documentation as required by legislation. The clinic offers a 24/7 advisory and referral service.

Abuse awareness training The Sexual Assault Clinic offers two abuse awareness training courses. ✿ The Monster Within training is aimed at equipping anyone working or involved with children with relevant knowledge and practical tools in the event of child abuse. It includes abuse indicators, normal and abnormal curiosity, the mindset of a paedophile, processes and procedures in reporting child abuse. ✿ The Birds and Bees Talk training is aimed at equipping parents of young children with practical and relevant ways to sexually educate their child. Educating children on sexuality from a young age will decrease the child’s risk of becoming a victim of sexual abuse.

For more information, contact: Christina Rollin (Forensic nurse and child law consultant) Tel: 011 420 0523 or 073 549 6678 Email: [email protected] Web: www.sexualassaultclinic.org Facebook: Child Abuse Medico-legal Services

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Conference highlights integral role of business in society In addition to the 20th Handbook, 2017 also marked the 10th annual Trialogue Conference. Like the Handbook, the conference was renamed to more holistically represent the broad and integral role of business in society. Sixty local and international thought leaders from companies, non-profit organisations, government, academia and media gathered in Johannesburg to explore solutions to South Africa’s developmental and socioeconomic challenges, with emphasis on three focus areas: social licence to operate, ICT for development and enterprise development.

What follows is a synopsis of conference insights. Detailed session write-ups and video clips are available on the Trialogue website: http://trialogue.co.za/insights-2017-business-society-conference.

Women’s economic inclusion could turbocharge global GDP

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he advancement of women in business improves bottomline performance and strengthens corporate culture, which ultimately drives GDP and socioeconomic development. That’s the view of keynote speaker, Graça Machel, founder of the Graça Machel Trust.

Machel told conference delegates, “Women must be allowed to assume positions where they can unleash their transformational power in business and society. There’s still an enduring view that women have a collateral and auxiliary role, rather than reflecting the 52% of the society which they make up.” She referred to the Women Matter Africa McKinsey Global Institute report, which found that African companies with a greater share of women on their boards of directors and executive committees perform better than their male-dominated counterparts. Specifically, the earnings before interest and tax margins of companies with at least 25% of women on their boards was, on average, 20% higher than the industry average. The report also found that $12 trillion could be added to global GDP by 2025 by simply advancing women’s equality.

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❛❛

Equal work, equal pay

In societies with high percentages of female participation in the economy, the more influence women hold in the workplace and the more authority their voices hold, the more esteem and respect women tend to be given as a collective beyond the boardroom as well. When women’s contributions are recognised and valued from an economic perspective, a profound social shift and elevation of their status often transpire as a result.

Empowering and educating women is a critical driver to social and economic development on the continent. There is untold benefit for employers to bring on more women as a part of their workforce. Studies have shown greater access to education and participation by women in male-dominated occupations in Africa could increase worker productivity by up to 25%.

CONFERENCE HIGHLIGHTS

The first step towards placing women on an equal footing to men, Machel said, is to address disparities in remuneration: women still earn around 10% less than their male counterparts. Beyond that is the challenge of work-life balance, faced by many women. Information technology presents a powerful opportunity, through accelerating the trajectories of the careers of women, by enabling telecommuting and remote access, for example.

Graça Machel – Founder of the Graça Machel Trust

US employees, customers empowering CEOs to embrace CSI and sustainability Businesses that contribute to socioeconomic development, and which actively enable their employees to do so, can dramatically outperform their competitors who turn a blind eye to sustainability as a driver of business growth. This ‘new normal’ business imperative goes hand in hand with the core of how businesses interact with their customers, employees and other stakeholders, and is transforming CEOs’ relationships with investors and social investments. According to Mark Tulay, director of Strategic Investor Initiative at New York-based CECP, US-based corporations can be harnessed as a force for good in society. CECP was founded in 1999, by actor Paul Newman and CEOs of companies, and now represents 200 top US companies representing $7 trillion in assets. These companies invested $18.6 billion in philanthropy in 2015. At the conference, Tulay presented on US trends in corporate philanthropy. The notion that ‘doing well by doing good’ is simply a platitude has been soundly debunked by business’s financial performance, said Tulay. For example, a survey of more than 1 300 brands in 13 categories and 13 markets found that products made sustainably to some degree had, on average, 4% higher sales than those which weren’t. Employees and consumers increasingly place the onus of sustainable business and corporate giving firmly on CEOs: 80% of respondents to an Edelman Business and Social Purpose poll agreed that, “A company can take specific actions that both increase profits and improve the economic and social conditions in the community where it operates”. US consumers are now becoming more aware and mobilised, driven in part by the millennial generation, said Tulay. Young employees care far more about sustainability, seek out safe and healthy products, and want to work for companies that share their values. “Employees do not want to work for companies with controversial reputations, and are seeking companies that are future-fit.”

Creating a global standard for the measurements of CSI Tulay said that many American companies are doing excellent work in CSI, but lag South Africa in how to monitor and measure their interventions. “Companies underestimate their giving impacts and often overlook intangibles like volunteering, so a key focus of CECP is developing and growing awareness and adoption of a global standard.” He said he was heartened by many American CEOs who say they will not waiver from their CSI commitments despite the change in US Government. “I believe they will step up, increase their giving, and take bolder positions on issues.”


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Enterprise development

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According to The National Development Plan, 90% of the approximately 11 million jobs that need to be created by 2020 will be through small businesses. However, according to The Gordon Institute of Business Science (GIBS), 80% to 90% of new businesses fail in the first two years, with some of the reasons for failure being lack of access to markets, capital and business skills. Dedicated conference sessions unpacked some of the key elements needed to support enterprise development in South Africa.

We need to change the way that society views failure – it is a teacher, it is the thing that provides you with the knowledge to move forward. Allon Raiz – Founder of Raizcorp

Allon Raiz, founder of business start-up incubator, Raizcorp, contextualised the discussion by highlighting that successful enterprise development means sustainable enterprise development. This means looking beyond individuals with the right qualifications, to those who will survive in the real world; people with resilience, flexibility and grit, among other traits. In South Africa, he explained, in addition to the traditional reasons for failure of start-ups, we have a culture of viewing failure as shameful, which explains why our entrepreneurial economy shows very low rates of re-entry after failure. We need to distinguish fear from shame.

Access to markets According to Daniel Hatfield of Edge Growth, access to markets is the biggest challenge for the average entrepreneur. It is often easier to get access to skills training, capacity building, and even funding. Hatfield noted that, despite recent changes to the supplier development aspects of the BBBEE Codes, corporate supply chains are not usually influenced by their own internal corporate social investment or enterprise development programmes. As a result, he said, in supporting enterprise development, “Corporates must be careful of setting expectations. Companies must be careful of telling entrepreneurs that if they go through the training, they’ll be fine”.

Funding entrepreneurship In panellists’ experience, most entrepreneurs do not actually need money. Rather, they need a compelling economic reason to exist. “We advise entrepreneurs to go as far as possible without raising funding. It creates a good discipline around cash flow management and ensures that you put the funding – when you do get it – in the place where you will most explode the growth of your business,” said Hatfield. On raising funding, Thato Kgatlhanye, founder of Rethaka Repurpose Schoolbags, commented that for her, the question was always how to raise capital most effectively while not losing equity. To do this, she noted: “you need innovative ideas”. For Kgatlhanye, the most effective way to raise capital was through business competitions, which gave her access to capital, but also provided networks, visibility and access to public relations. For funders, emphasis must be placed on how they fund. Rather than funding an enterprise in one large tranche, it should be ‘dripped in’ said Raiz. “You must ensure that the structure of the business is right for scaling before you fund it.” Hatfield agreed, adding that the quickest way to break a business with a broken business model is to give it funding. “Funding at the right time is key.”

The impact of gender and race on the entrepreneurial experience Kgatlhanye shared that, for her, the conversation has never been about her gender. “The issue is whether you can put value on the table. Yes, we do get preferential treatment as young black women because of BBBEE, but it is far more important to build for success.” She explained that Rethaka consciously looks to empower black women. However, she noted, “We need to balance sociability and scalability of the business. It’s not difficult to measure how many women you employ; what is hard is measuring how productive your people are, and what impact your business is having on people’s lives”.

Social enterprise A social enterprise – defined as an impact-driven organisation that addresses social issues using sustainable business models – is still a fairly new concept in South Africa, steadily gaining international momentum. A panel discussion under the theme of enterprise development explored the potential and challenges, as well as the type of support and partnerships needed for social enterprises. Panellists offered encouragement, but also cautioned those working in, or considering entering, the social enterprise space. Kerryn Krige of the Network for Social Entrepreneurs at GIBS said that, if

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social entrepreneurship is understood as falling on the spectrum between for-profit and non-profit organisational structures, this positioning brings new opportunities outside of traditional funding models, ultimately facilitating fast-tracked social and economic change.


From the perspective of a social enterprise or an NPO considering transitioning into a social enterprise, the model offers innovative opportunities regarding both impact and funding sustainability. The ability to generate revenue, which is then reinvested into the business, can support programming towards increased social value. This diversified income approach at least partially reduces reliance on traditional funding models and generates some unrestricted funding, which the entity can strategically reinvest. However, this relatively new approach in South Africa brings added complexity. Social enterprises do not fit into the traditional organisational definition of for-profit or NPO. Nor are they all structured in an identical fashion. In fact, during different stages of social enterprise evolution or of NPOs transitioning into a social enterprise, organisations will experience varying structures, governance requirements and funding needs. For opportunities in this ‘new space’ of business models to be fully harnessed, companies will be required to re-envision traditional funding approaches which tend to struggle to accommodate emerging hybrid structures. Panellists cautioned that the social enterprise approach is not necessarily the correct route for all NPOs and that an organisation must carefully evaluate how it would approach the profit component in such a hybrid model. Does a tangible market exist? What shifts in structures, such as governance, will subsequently be required?

Harnessing ICT for development Information and Communications Technologies for Development (ICT4D) aims to harness ICT for socioeconomic development, with particular emphasis on driving impact in low-resource or low-income regions. A panel discussion explored the potential of ICT4D, the impact that new technologies could have for the developing world, as well as the ways in which existing and emerging technologies are currently used, particularly in under-resourced communities. Vuyani Jarana, then chief officer at Vodacom Business, suggested that energy be channelled into looking at the opportunities that ICT presents to tackle some of the most stubborn socioeconomic challenges in Africa. He explained that social innovation is about looking for prompts in communities; finding out where the challenges lie and how best to respond. From there, an idea can grow to a prototype, which is then scaled up to a sustainable solution, eventually causing fundamental systemic change. Nathi Kunene, CSI senior manager at the Telkom Foundation, said that technology has disrupted so much over the last few years. “The youth we are assisting are born with the technology of today. If we want to reach young people, we need to understand the role of technology and social media in order to make our solutions effective.”

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To really make an impact, we need to use and leverage what is already in Africa’s hands. Africa stands in a strong place to participate in and contribute to the fourth industrial revolution. It is up to us – to business and society – to ensure that Africa is not left behind as we address the challenges we face as a country and a continent. Vuyani Jarana – Former chief officer at Vodacom Business

Marcha Bekker of Praekelt.org agreed, stating that in ICT4D it is critical to start with the end user, by understanding who that user is and what technology they already use and have in their homes. “We cannot sit in our office in Joburg and design a phone app for teenage girls in Bangladesh. We have to go there and see where they are at and what they need.” Bekker cited other examples, such as providing ICT solutions for people with disabilities or low levels of literacy, saying that more effective solutions would lie in voice-, rather than text-based systems. She also noted the importance of ensuring that solutions are cost-effective and intended to be scalable from the start. “There is a stigma (in the ICT4D space) around ‘pilot-itus’: too many small things are piloted and then they fail as soon as they are scaled.” Gavin Weale, founder and managing director of Livity Africa, commented that the development of digital technology creates unprecedented potential to create jobs and livelihoods. “As every business becomes more digital, it needs new skills, and this presents a huge opportunity for jobs, freelancers and microenterprises. This new digital world is creating whole new career paths. And there are so many young people who can and want to capitalise on this, no matter how underprivileged their background.”


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Addressing access issues

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Weale considered the significant risk in programmes that capitalise on providing greater digital access to those who are already connected, especially in urban areas. He noted that even basic connectivity can – and must – be leveraged. Bekker suggested that this is a question of targeting the problem at two levels. “We need to work on getting connectivity to people, but we also can’t just sit and wait for that to happen one day. We need to work with what we have right now. Let’s start our interventions on phones that have the most basic functionality: call, SMS and USSD. To do that, we need to work together to get those costs down. If we can’t do that, we will end up waiting until everyone has a smartphone.” Kunene agreed, noting that it is important to ensure that innovation brings with it better, cheaper products. In the telecommunications space, scale is key. In South Africa, CSI is a function of an economy not firing on all cylinders. “How can we use CSI to get the economy going?” asked Jarana. “We need to start with that in our own industry. We need to ‘solve upstream’ and make the economy work using ICT: help government to become more efficient, helping the private sector do better.”

Earning and retaining social licence to operate Milton Friedman’s saying, that “the business of business is business” encapsulates the prevailing thinking of the 1970s. “Now, we want to challenge that – the business of business is everybody’s business. If we want to be socially correct, we must remember that, as business people, we serve at the behest of society. If we do not have that social licence to operate, we may as well close our doors,” said Thabang Chiloane, Nedbank’s executive head of Public Affairs. He explained that social licence to operate is not a piece of paper, and that it is not limited to business. “All organisations need it, and it is about approval and acceptance of the local community so that you will be able to successfully undertake your activities on a day-to-day basis. It is hard to get, hard to maintain and easily lost. But when you have it, you will be able to share what you are doing with society. When we say ‘share’, we mean that society benefits somehow from your making money. And when they see that they benefit, they will protect you; physically and also by being advocates of your business. Parties will share information, develop a shared language and understanding. ”It is about moving from ‘do no harm’, to proactively helping,” said Chiloane. Chiloane was joined by Ferial Haffajee, editor-at-large of The Huffington Post South Africa; Shirley Raman, chief director of Research and NGO Development at the Gauteng Department of Social Development; and conference chairperson, Thabang Skwambane, for a panel discussion on how social licence to operate could be improved in South Africa. In her opening comments, Haffajee challenged: “We cannot have any debates on social licence to operate unless, and until, we have an economy that looks like the society in which it operates.” Citing findings from the latest Commission for Employment Equity Report, Haffajee said that top management in South Africa remains white. “Every year the Commission on Employment Equity releases a statement that is either a 'carrot', or a 'stick'. This year, they stated that prosecutions would increase. Then everyone cries out, but nothing is done. This continues to display the view that money, wealth and power remain white. Allied to this view is that business is white. Even if this is not actually true, it is how things are perceived. There is a view that apartheid has not ended. This is not true, but the view persists. Our vibrant CSI society must coexist with the formal economy. Young black people must see themselves as represented. Democratic firmament and social licence to operate must coexist,” said Haffajee.

Transparency, commitment required for effective community engagement A conference breakaway session explored the need for companies to effectively and continuously engage communities and the impact that this has on a business’s social licence to operate, as well as on its reputation. Governor Daliwonga Duma, head of sustainability at Northam Platinum, said that, in his experience, social licence to operate relies heavily on a business’s commitment to honest and transparent community engagement. Sibongiseni Malakoane, executive director of the WDB Trust, described witnessing strong community

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buy-in, impact and programme sustainability when successful relationship development had been accomplished. She encouraged such engagement with all stakeholders in order to develop a good understanding of the needs and priorities of a community, before initiating CSI programming.


Jessica Rees-Jones, executive director of Inyathelo, added that, in order to effectively engage a ‘community’, the concept first needs to be unpacked. She said that, just as different stakeholders have varied needs, expectations and priorities that they believe companies must address, so too will various groups within a community. There is a danger in conducting stakeholder engagement in which ‘community’ is seen as a homogenous group, or singular stakeholder when, in fact, community is comprised of multiple subgroups with different realities, priorities, expectations and access to power. Rees-Jones suggested South Africa would benefit from developing a guiding set of principles to frame how a social licence is understood, including defining roles, responsibilities and various approaches to capacity-building, with emphasis on growth and sustainability. Panellists were asked to consider how CSI-funded projects could help to build a company’s credibility, particularly in an environment where demands often exceed the resources available. Two strong themes emerged: firstly, that of understanding and supporting the needs of the community, rather than imposing external priorities. Malakoane described how WDB Trust, rather than entering a community with assumptions, instead invests time and resources in listening to the local needs and then partnering towards meaningful outcomes. Duma agreed with taking an approach such as asset-based community development, addressing the self-defined needs of the community and then building on what is already there, including established activities and partnerships, as well as the skills and capacity of the community. Secondly, panellists emphasised the need for companies (and implementing NPOs) to be honest and transparent about their capabilities and goals when entering a community. Once established, legitimacy and social licence must be maintained. Duma underscored the importance of accountability and proactive communication, in order to share progress, issues and any challenges related to a company’s business operations or CSI initiatives taking place within a community. ■


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EFFECTIVE EMPLOYEE VOLUNTEERISM Is there a local best practice case study?

VIEWPOINT

Not really. Corporates design their programmes based on the nature of their businesses, individual objectives, culture, resources, priorities, funding support models, as well as the needs of the communities or organisations they choose to support.

DESIREE STOREY Manager of FirstRand Volunteers [email protected] www.firstrand.co.za

Through regular events and research, FirstRand Volunteers drives knowledge sharing on employee volunteerism (EV). Manager, Desiree Storey, shares ideas on how to foster creativity, innovation and an enabling environment for EV that benefits communities, employees and companies.

What are the trends in volunteering?

It is important to acknowledge the value of traditional giving – of food, clothes, and painting classrooms for example. However, skills-based volunteering is on the increase. Nonprofit organisations (NPO) and schools need the skills and knowledge that corporate employees have to offer. The Partners for Possibility leadership programme matches business leaders with principals from under-resourced schools. Business leaders get to work with school principals to build more successful schools. Corporates with a global footprint offer employees the opportunity to support people in different countries, aligned with their strategy of being a good global corporate citizen.

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This is a very common question in the EV space and one that informed the launch of the Beyond Painting Classrooms (BPC) initiative. BPC was established by FirstRand in 2012, with the support of Charities Aid Foundation South Africa. It aims to promote a developmental approach to corporate EV that delivers benefits for both business and society. It provides opportunities for people passionate about EV, from both NPOs and corporates, to learn about good practices, share success stories, challenges and build partnerships through engagement. What kind of volunteering support do most NPOs look for?

NPOs are in constant need of funding and knowledge from volunteers, and want long-term partnerships. It is important for NPOs to guide corporates, to ensure that skills are matched correctly. A clear job description from the NPO, including the level of knowledge or skill needed, length and duration of an assignment will assist the volunteer to plan, and manages expectations from both sides. The corporate should have an up-to-date skills database with all employees who are interested and available to volunteer. What tips do you have for the effective management of EV programmes?

It is important to have a clear mandate and objectives from top management. From there, consider how the programme will be resourced, structured, governed and communicated, both internally and externally. Measuring impact is also crucial. In addition, create an enabling environment for volunteering; know and understand your employees’ needs; identify the needs of your NPO partners; provide clear guidelines and policies for your volunteers; train your employees and try to offer a ‘bouquet’ of volunteer opportunities. Bear in mind employee


workloads, family commitments and personal hobbies and interests when planning initiatives. Make it fun, relevant and easy to join. Make sure its impactful for all involved. Plan regular employee surveys. Host community conversations with your NPO partners and find out about their needs and whether your volunteers help or hinder the work they do. Intranet sites help to track volunteering activities, the spend and hours donated, and provide the programme management team with valuable statistics for sophisticated reporting purposes. Acknowledge and recognise volunteering – whether it be a letter from the CEO’s office or an annual awards celebration – to inspire more support and involvement. What are some expected future trends in volunteerism?

The use of technology and social media to mobilise employees is on the rise. Clever apps, linking volunteers with NPOs, make it easy for employees to donate money and time. Platforms such as forgood offer easy access to NPOs looking for assistance, as well as the opportunity for EV practitioners to set up, automate and measure their EV programmes. Online mentorship is also a convenient way for corporate employees to donate their time and knowledge from their desks. Volunteers are linked with school learners to assist with homework and assignments. The buzzword in the EV space is ‘collaboration’. It’s a challenge, but corporates, NPOs, communities, suppliers, clients and even competitors in the relevant sectors, can look for common ground and opportunities to work together to make a sustainable impact. There is space for everyone to ‘shine’ through coordinated collaborative community upliftment efforts in South Africa, but there must be shared values and objectives among all parties involved. Corporates want to attract and retain the top talent in the country. Our millennials are seeking employment with corporates which, besides being successful businesses, care about creating a better world. Corporates that encourage and support active citizenship will be the employers of choice. ■

We invest in our communities to power their possibilities Exxaro’s reviewed Socio-Economic Development (SED) strategy is aligned with the company’s vision of “powering a better life for all in Africa through responsible investment”. Through collaboration and partnerships, Exxaro will continue to invest in initiatives that build sustainable communities by embarking on proactive engagement, developing a deeper understanding of societal needs and better application of best practices in corporate citizenship. Exxaro plays a significant role in South Africa as an employer, offering direct and indirect jobs, skills development and Enterprise and Supplier Development opportunities. Our Social Return on Investment (SROI) methodology is used to evaluate the impact of our socio-economic interventions for the communities we invest in.

Priority socio-economic investment Exxaro’s priority SED areas aim to maximise value creation and selfempowerment for communities by supporting education, health and the natural environment, applicable infrastructure development and enterprise and supplier development as a common thread through all these areas. EDUCATION: The Exxaro People Development Initiative (EPDI) is an internal structure that governs and tracks all education and skills initiatives for both Exxaro employees and community development in the areas where Exxaro has a footprint. We will align to the Department of Education’s strategy that has recognised Early Childhood Development (ECD), as fundamental to creating a solid foundation in a child’s early years of learning. For the 10-year period from 2006 to 2016, 37% of our total community spend went to education. In Mpumalanga, we have recently completed the TVET College in Delmas at cost of R6.8m. SROIs for the TVET College and education programmes have been calculated to be 2.2. HEALTH, ENVIRONMENT, AGRICULTURE, WATER AND ENERGY: The prevailing socio-economic challenges expose disadvantaged communities most to the risk of food shortages, access to energy, potable water and proper sanitation. They are therefore vulnerable to illness. By leveraging the strength of our business capabilities, Exxaro will respond effectively and efficiently through collaboration with other businesses, specialists and government and the application of appropriate technologies to improve access. Over the next three years will be contributing R12 million towards the construction of a clinic in the Rietkuil Township and a further R2 million in Ga-nala to refurbish the landfill site which will reduce the cost of refuse removal for the municipality. Both projects are expected to generate an SROI of more than 2. ENTERPRISE AND SUPPLIER DEVELOPMENT (ESD): Exxaro’s ESD strategy is intended to develop entrepreneurs and suppliers across the priority investment areas and any other opportunities. In all our operations, ESD Centres are being established to provide business training and support and hands-on mentoring and coaching. This is a R30m investment over a period of five years. SROIs for these projects have been calculated to be between 2.5 and 3. Funding provided through the Exxaro Chairman’s Fund has created three agricultural enterprises which will graduate to the ESD initiative to enable further growth.

51% More than half of our socio-economic expenditure between 2006-2016 went on education and skills development.

INFRASTRUCTURE DEVELOPMENT: Infrastructure such as housing, community and cultural centres, and roads, gives shelter and mobility and provides for a better community life. In Limpopo (Waterberg region), we have started construction of a 36km road in partnership with Roads Agency Limpopo at a total cost of R300m. We are also refurbishing employee accommodation at a cost of R300m. Development of these projects has incorporated local skills development, employment and SMMEs. Exxaro recently handed over the Klarinet Sports Field, valued at R12.3 million, to the Emalahleni Municipality and the Department of Sport, Arts and Culture. The SROI for this project is 0.63.

© ADOBE STOCK

CHAPTER FOUR

An overview of CSI in Ghana and Kenya There is a global trend towards the adoption of formal corporate philanthropic programmes. While CSI has been measured in South Africa for over 20 years, it has not been formally researched in other African countries. In order to map the corporate giving landscape in Ghana and Kenya, Trialogue partnered with the Centre for Learning on Evaluation and Results in Anglophone Africa (CLEAR-AA), a global initiative aimed at strengthening developing countries’ capacities in monitoring and evaluation and performance management. The research, summarised here, was conducted with 17 companies in Kenya and 32 companies in Ghana, in 2017. The intention is to expand this research to other African countries in 2018.

Key findings ●●

●●

●●

174

While there is growth in CSI expenditure, the levels of maturity and sophistication of CSI support and governance structures differ across African countries. Kenya’s adoption of CSI initiatives is more mature than that of Ghana, with more sophisticated methods used to determine expenditure; governance mainly via CSI departments; progressive adoption of the Sustainable Development Goals in CSI strategies; widespread national funding initiatives; and a higher incidence of flagship projects. In Ghana, CSI is slightly more reactive, with budgets determined at the discretion of the company board; governance mainly via other company departments; lower levels of adoption of the Sustainable Development Goals; emphasis on programmes at a regional level; and fewer flagship programmes.


●●

●●

Monitoring and evaluation processes, while prevalent in Ghana and Kenya, are used less strategically than in South Africa. There is a high rate of employee volunteerism, but company-initiated programmes are less prevalent in Ghana and Kenya.

CSI IN GHANA AND KENYA

●●

There is opportunity for increased levels of communication of CSI initiatives in Ghana and Kenya.

GDP comparison across markets South Africa has a significantly larger gross domestic product (GDP) than Ghana or Kenya. However, growth in South African GDP is flat, unlike Ghana and Kenya where there is year-on-year growth (exceeding the average 3.4% world GDP growth). GDP, CURRENT PRICES

66

South Africa 318 Kenya

75

Ghana

43 $ billion

Source: IMF World Economic Outlook, April 2017

REAL GDP GROWTH

67

8

% change

6 4 2 0 2016

South Afica

2017

Ghana

Kenya


GHANA FACT SHEET ● ● ● ●

Population: 27 million people Unemployment: 5% Inflation: 17.5% Challenges include lack of drinking water, limited hospitals and basic sanitation


KENYA FACT SHEET ● ● ● ●

Population: 49 million people Unemployment: 38% Inflation: 6.5% Challenges include high levels of poverty and rapid population growth



175

Research sample

CHAPTER FOUR

●● ●●

●●

Ghana (@3.02 Ghc/ZAR) Ghc500 million = R1.5bn Ghc100 billion = R30.2bn

Seventeen companies in Kenya and 32 in Ghana participated in the research. The highest proportion of companies (38%) interviewed in Ghana were in the construction sector, whereas in Kenya, 41% of the sample were financial institutions. The companies interviewed in Ghana had a lower turnover and number of employees than those in Kenya.

COMPANY TURNOVER

68

12 KSh100bn or more 12 KSh10bn up to but less than KSh100bn 12 KSh5bn up to but less than KSh10bn 18 KSh500m up to but less than KSh5bn 12 Less than KSh500m 34 Don't know

3 Ghc50bn up to but less than Ghc100bn 3 Ghc10bn up to but less than Ghc20bn 6 Ghc1bn up to but less than Ghc10bn 28 Ghc500m up to but less than Ghc1bn 44 Less than Ghc500m 16 Don't know

Kenya (@0.13 KSh/ZAR) KSh500 million = R65m KSh100 billion = R1.3bn

% corporate respondents ■ Ghana n=32 ■ Kenya n=17

NUMBER OF EMPLOYEES

69

12 5 001–10 000 44 1 001–5 000 44 Less than 1 000

3 5 001–10 000 26 1 001–5 000 71 Less than 1 000


CSI expenditure ●●

The majority of corporates from Kenya and Ghana spent relatively small amounts on CSI, with median spend at R1.6m and R1.1m respectively.

CSI EXPENDITURE

70 64

Average Median

R million 22

16.8 7.9 1.1

South Africa

Ghana*

1.6

Kenya**

% corporate respondents *Ghc @ 3.02 **Ksh @ 0.13 to ZAR conversion

176


South Africa n=92 / Ghana n=31 / Kenya n=16

●●

In Kenya and Ghana, as in South Africa, more companies indicated an increase in CSI expenditure than a decrease. Growing corporate profits and inflation were the causes for increased budgets in South Africa, where most companies determine expenditure as a percentage of net profit after tax. In Kenya and Ghana, the main reason for increased expenditure was project requirements/needs of recipients, followed by policy or focus change and an increase in corporate profits.

CHANGES IN CSI EXPENDITURE

South Africa

71

62

Ghana Kenya


●●

19 13

77 31

50

Increased

19

Stayed the same

10

Decreased

19

% corporate respondents

South Africa n=90 / Ghana n=32 / Kenya n=17

Method of determining CSI budget ●●

In Ghana, company decision/board approval was the most prevalent means of determining the CSI budget (59%). While this was also the most common means of budget determination in Kenya, over one-third of companies used a percentage of profit (pre- or post-tax), the most common method in South Africa.

METHOD USED TO DETERMINE CSI BUDGET

% of post-tax profit/net profit after tax Company decision/board approval Based on existing expenditure Fixed budget with variable % increase per annum % of turnover % of pre-tax profit Fixed budget with fixed % increase per annum More than one method

72

45 6 18 26 59 41 9 6 6 7 3 2 1 18 1

6

% of payroll

3

Other/don't know

9 23 11

% corporate response Multiple responses

■ South Africa n=92 ■ Ghana n=32 ■ Kenya n=17


177

Geographic distribution of funding

CHAPTER FOUR

●●

●●

●●

Just 5% of CSI expenditure in Ghana was spent nationally. Funding was regionally focused, with the Greater Accra region receiving over 40%. No CSI funding was spent internationally. The majority of Kenya’s CSI expenditure was national, with the remainder spread across regions, predominantly around Nairobi. Kenya distributed a percentage of its CSI expenditure to other countries (with a focus on Tanzania, Rwanda and Uganda), possibly due to a larger presence of multinational companies in the country.

GEOGRAPHIC DISTRIBUTION OF CSI EXPENDITURE

5 41 15 13 7 19

73

7 58 19 16

National Greater Accra Region Northern Region Eastern Region Ashanti Region Other

International National Nairobi County Other

% CSI expenditure

■ Ghana n=32 ■ Kenya n=17

Development sector funding ●●

●●

Education and social/community development received the most support from corporates across South Africa, Kenya and Ghana. Support for disaster relief was more common in Ghana, while Kenya’s support for health, entrepreneur and small business support and environment was more common than in South Africa or Ghana.

CSI FUNDING OF DEVELOPMENT SECTORS

Education Social and community development Health Food security and agriculture Entrepreneur and small business support Sports development Housing and living conditions Environment Arts and culture Safety and security Disaster relief

74

91 72 100 76 56 94 51 44 88 36 3 41 39 9 65 35 13 41 18 13 18 28 25 47 21 6 29 11 19 12 23 34 18

% corporate respondents Multiple responses

178



Funding channels ●●

Non-profit organisations were the most common recipients of funds in Kenya and South Africa, supported by 71% and 89% of companies respectively.


●●

In Ghana, schools, universities, hospitals and other government institutions were funded by 71% of companies, making them the most popular channel.

TYPES OF ORGANISATIONS SUPPORTED BY CSI

Non-profit organisations Schools, universities, hospitals and other government institutions For-profit service providers/organisations Industry initiatives Government departments for their projects/programmes Community trusts Political parties Churches/religious institutions

75 89 45 71 34 71 57 42 19 21 16 23 7 26 26 14 17 26 21 1 10 5 29 7

% corporate respondents Multiple responses


Governance ●●

●●

Governance of CSI programmes was least formalised in Ghana, where over half of respondents (53%) ran CSI from within another department (versus only 16% in South Africa and 24% in Kenya). About one in 10 companies in Ghana and Kenya managed their CSI through a non-profit company (NPC), with funding mainly from the company, or a trust, while a third of South African companies govern CSI in this way.

CSI GOVERNANCE STRUCTURE

76

CSI department within the company CSI responsibility within another department of the company Registered as an NPC Registered as a trust

51 38 65 16 53 24 8 6 6 25 3 6




179

●●

In Ghana and Kenya, the CEO or managing director had oversight of the CSI function in approximately half of companies, unlike South Africa where ultimate oversight was mainly via trustees/non-profit directors (where applicable) or divisional executives.

CHAPTER FOUR

OVERSIGHT OF CSI FUNCTION

77

CSI manager CSI committee/forum Divisional executive or head CEO or managing director Executive committee Trustees or non-profit board directors Social and Ethics Committee Company board Other

11 16 0 6 6 12 21 9 6 11 47 53 8 0 22 3 12 10 9 9 18 2 9 0

% corporate response Multiple responses

■ South Africa* n=81 ■ Ghana n=32 ■ Kenya n=17

* South Africa figures from The CSI Handbook, 19th edition, 2016

Monitoring and evaluation ●●

●●

●●

●●

Over half of companies in Ghana (60%) and more than two-thirds in Kenya (68%) had monitoring and evaluation (M&E) processes in place for their most significant CSI projects. In Ghana and Kenya, the majority of M&E was conducted by internal staff. The most common M&E undertaken in both countries comprised site visits and the documentation of project activities. Kenya had a higher incidence of conducting baseline surveys (44%). Of the 60% of companies in Ghana that allocated a percentage of their CSI budget to M&E, the amount was most often between 1% and 5%. In Kenya, one-fifth of companies claimed to spend between 6% and 10% of their CSI budget on M&E processes. In all three countries, M&E data was most frequently used to report to the board and to plan or revise strategies and projects.

INCIDENCE OF M&E PROCESSES FOR MAIN PROJECTS

60 Yes 34 No 6 Don’t know

78

69 Yes 31 No


180


TYPE OF M&E PROCESSES

79

Documenting project activities Financial audits to check funding spent as intended Management practices and effectiveness of implementation Determining risks related to the project/s Number of beneficiaries Quantifying outcomes and impact of the project/funds spent Baseline survey Longitudinal studies


79 63 74 63 58 56 53 56 53 56 47 56 42 44 26 44 16 19

Site visits

% corporate response

Multiple responses

■ Ghana n=32 ■ Kenya n=16

PERSON RESPONSIBLE FOR IMPLEMENTATION OF M&E PROCESSES

69 In-house staff 19 Beneficiaries of the projects 12 External parties/ specialist agencies

80

59 In-house staff 12 Beneficiaries of the projects 29 External parties/ specialist agencies


USE OF M&E DATA

81

Reported to board Planned/revised strategies Planned/revised programmes or projects Shared findings with other grantmakers/stakeholders Shared findings with NPO recipients Influence public policy/government funding choices

89 47 56 78 50 63 77 38 63 42 9 13 36 3 13 22 3 25


Multiple responses

■ South Africa* n=74 ■ Ghana n=32 ■ Kenya n=16

* South Africa figures from The CSI Handbook, 18th edition, 2015


181

Employee volunteerism

CHAPTER FOUR

●●

Like South Africa, employee volunteer programmes are popular in Ghana and Kenya. However, there are fewer company-organised initiatives in these countries, compared to South Africa.

INCIDENCE OF EMPLOYEE VOLUNTEER PROGRAMMES

82

68 Yes 32 No

53 Yes 44 No 3 Don't know

67 Yes 33 No

% corporate respondents ■ South Africa n=90 ■ Ghana n=16 ■ Kenya n=15

TYPES OF EMPLOYEE INVOLVEMENT

83

Company-organised volunteering initiatives Fundraising and collection drives organised by the company Time off for individuals to volunteer during work hours Employee matched funding Pro bono Give as you earn

90 38 50 73 38 50 58 31 25 40 6 17 26 31 17 23 19

Volunteer matched funding

15 24 20

None

25 10

% corporate response ■ South Africa n=62 ■ Ghana n=16 ■ Kenya n=12

© SASOL GLOBAL FOUNDATION

Multiple responses

182


Sustainable Development Goals ●●

Kenya, Ghana and South Africa shared similar alignment with the Sustainable Development Goals (SDG). There was, however, greater emphasis on ‘good health and wellbeing’ in Ghana and Kenya.


●●

Whereas companies in South Africa and Kenya have already responded to the SDGs, those in Ghana planned to do so in the future.

IMPACT OF SDGs ON CSI STRATEGY

84

The SDGs will be used for future strategic planning We have/will hone our CSI strategy to more specifically respond to the SDGs Our strategy already responds to the SDGs and does not have to be adapted Our strategy is clear and relevant and will not be adapted because of the SDGs

19 39 12 18 23 29 48 23 53 15 15 6



TABLE 7: ALIGNMENT OF CSI PROGRAMMES WITH SDGs

SA*

GHANA

KENYA

% corporate response Quality education

61

69

59

No poverty

38

19

18

Decent work and economic growth

32

22

53

Zero hunger

31

28

18

Good health and wellbeing

30

69

47

Gender equality

21

19

24

Clean water and sanitation

15

19

12

Industry, innovation and infrastructure

14

31

12

Sustainable cities and communities

14

16

6

Reduced inequalities

13

13

12

Partnerships for the goals

13

9

12

Affordable and clean energy

10

16

18

Peace, justice and strong institutions

10

9

12

Responsible consumption and production

6

9

12

Climate action

6

6

24

Life below water

6

6

12

Life on land

3

13

29

Multiple responses

South Africa* n=91 / Ghana n=32 / Kenya n=17

* South Africa figures from The CSI Handbook, 18th Edition, 2015


183

CSI communication and reporting

CHAPTER FOUR

●●

●● ●●

The company annual report is the most common CSI communication method in South Africa, Ghana and Kenya, and second only to the company website in South Africa. The use of the company website was lower in Ghana than in Kenya and South Africa. Company sustainability reports were not used at all in Ghana, possibly due to few companies producing these reports. ■

CSI COMMUNICATION CHANNELS

85

Company website Company annual report Intranet Staff newsletters/magazines Company sustainability report Posters in workplace Company brochure CSI-specific annual report Customer/client newsletters/magazines External exhibitions/posters CSI-specific brochure CSI-specific website

84 28 65 81 69 76 65 41 41 64 28 35 58 24 46 19 29 33 34 18 33 9 18 32 16 29 28 25 29 28 3 6 23 9 6


184


FUELLING A BETTER WORLD In 2016 Engen invested more than R28 million into programmes that contribute to positive change in our local communities.

classes nationally, of which 586 wrote the Grade 12 National Senior Certificate exams, achieving an impressive 94% pass rate and a 70% bachelor pass rate.

using paraffin, children between the ages of 7 and 13 are often vulnerable. It is these children who are the focus of Engen KlevaKidz,” he adds.

This is because Engen is committed to being a responsible corporate citizen and conducting business in a manner that is compatible with the economic, social and environmental needs of the communities in which it operates.

“Our EMSS programme has consistently maintained excellence, outperforming the national average every year. By continuing to grow the minds and talents of the future, the EMSS initiative is changing our world, helping people to explore new horizons and gain new experiences,” adds Nduvane.

BRINGING TRUCKER HEALTH TO THE FRONT SEAT

ENGEN KLEVAKIDZ PUTS PARAFFIN SAFETY FIRST

Operated nationwide at Engen Truck Stops and retail service stations, truck drivers are offered free voluntary screenings in mobile clinics. These are conducted by qualified nurses and councillors where blood pressure, cholesterol, diabetes, tuberculosis, BMI (Body Mass Index) and HIV/Aids are tested.

Engen’s Corporate Social Investment Manager, Mntu Nduvane says the company’s CSI focus areas are education, health and safety, the environment and supporting people with disabilities. “Our focus areas are closely aligned to the country’s national imperatives and address key issues in our business, society and government.”

ADDRESSING THE QUALITY OF MATHS AND SCIENCE EDUCATION Flagship programmes include the Engen Maths and Science Schools (EMSS) where the main aim is to develop a growing pool of technical talent with a focus on supplementary support to government efforts in Maths, Science and English. “As an oil company that largely depends on skilled labour in engineering, commerce, technology and related fields, our primary focus continues to be efforts to address the quality of mathematics and science education,” says Nduvane. EMSS exposes learners from grades 10 to 12 to high-quality teachers, tuition and educational materials. Currently, Engen supports nine Maths and Science schools across South Africa. In 2016, 1 881 learners participated in EMSS

Another flagship programme is the annual Engen KlevaKidz campaign, which is a unique brand of industrial theatre that uses storytelling to engage with and educate learners across South Africa about the importance of paraffin safety and what to do if paraffin is ingested or inhaled. Engen KlevaKidz takes the form of an interactive educational stage drama relaying key safety messages – all in the learners’ mother tongues - combined with a jingle to reinforce the theme. Since its inception in 2008, Engen KlevaKidz has reached over 145 000 learners in 436 schools across South Africa – from rural villages deep in Limpopo and the Eastern Cape to the townships of Gauteng. “Young children in under-resourced households are often the primary daytime care givers, often looking after their siblings while their parents or guardians are at work,” explains Nduvane. “Without supervision, and uninformed of the multiple dangers associated with

Running for its sixth year, Engen Driver Wellness is another flagship programme that continues to bring health to the front seat for truck drivers by providing them with free health screenings.

Nduvane says that the main aim of this initiative is to improve health through awareness. “Education helps to remind drivers and our employees why their health is important and how life choices impact on their well-being. Ultimately this increases their health and productivity and safety on the roads.” Nduvane adds that there has been a marked increase in the amount of individuals using the services provided by Engen Driver Wellness. “This is a clear indication that the Engen Driver Wellness intervention is making a difference to the wellbeing of drivers and will ultimately lead to a healthier and safer industry.”

© ADOBE STOCK

CHAPTER FOUR

Trends in global corporate giving In addition to tracking year-on-year changes, Trialogue also puts local progress in CSI into broader perspective, by comparing it with research from global partner, CECP (Committee Encouraging Corporate Philanthropy). Trialogue’s 2017 research – profiled extensively in chapter one – features data from 92 large companies in South Africa; CECP’s Giving in Numbers 2017 report features data from 258 United States-based companies, and CECP’s Giving Around the Globe 2017 report features data from 61 companies in 17 countries outside of North America, including regional profiles for Africa, Europe, Asia and Latin America. Several similarities in patterns of corporate giving emerged from the South African, North American and global research.

Trialogue estimates that total corporate giving of all companies in South Africa, based on an extrapolation of published figures from listed companies, was R9.1 billion in 2017 (approximately $640 million1), up from R8.6 billion in 2016. Based on Trialogue’s 2017 research sample, total giving per employee in South Africa was R5 246 ($368) in 2017. The 258 US companies sampled in the CECP’s Giving in Numbers 2017 report donated more than $20.3 billion in 2016.

The 61 companies included in the CECP’s Giving Around the Globe 2017 report gave $1.5 billion in cash and non-cash donations in 2016. Regionally, total giving per employee was highest in Asia ($1 050), followed by Europe ($350), Africa ($110) and Latin America ($61).

1 Average exchange rate for year ended February 2017 ($1: R14.2595), and average exchange rate for year ended February 2016 ($1:R13.5013): http://www.sars.gov.za/AllDocs/LegalDoclib/Rates/LAPD-Pub-AER-2012-02%20-%20Average%20Exchange%20Rates%20 Table%20A.pdf.

186


Corporate giving linked to profits

GLOBAL CORPORATE GIVING TRENDS

In South Africa, 62% of companies increased their giving in 2017, with an equal split between the remaining 38% of companies that decreased or did not change their level of giving. Most companies (34%) that increased their giving attributed this to increased corporate profits. Similarly, the majority of companies (58%) with lower CSI budgets cited decreasing profits as the main reason for this. Of the 209 US companies sampled between 2014 and 2016, almost half (48%) increased their philanthropic giving, 46% decreased their level of giving, and 6% remained unchanged. As in previous years, US companies that contributed more to social development also performed better financially between 2014 and 2016. For example, companies that increased their giving by at least 10% also increased median revenues and pre-tax profits by 4% and 8%, respectively. In contrast, companies that increased their giving by less than 10% saw a -6.1% median revenue growth rate and -6.4% median pre-tax profit growth rate. Despite political turmoil in Latin America (Brazil), social investment remained stable in 2016. Only 36% of surveyed Brazilian companies increased their total giving. In Europe, the aggregate giving budget of French companies increased by 25%, from €2.8 billion ($3.5 billion2) in 2014, to €3.6 billion ($3.7 billion) in 2016.

Giving as a percentage of profit While South African companies use various methods to determine their CSI budgets, most (45%) use net profit after tax (NPAT) targets, 72% of which use 1% of NPAT, as prescribed in the Broad-Based Black Economic Empowerment Codes. Trialogue’s research found that companies spent an average of 1.1% of NPAT on CSI in 2017, down from 1.7% in 2015. For US companies, the total giving as a percentage of revenue increased from 0.12% in 2013 to 0.13% in 2016. Likewise, total giving as a percentage of pre-tax profit increased from 0.84% to 0.91% over the same period. Companies with revenues ranging from $25 billion to $50 billion accounted for the highest median total giving as a percentage of pre-tax profit (1.12%), while companies with more than $100 billion revenues accounted for the lowest median total giving as a percentage of pre-tax profits (0.57%). The median total giving as a percentage of pre-tax profit for Fortune 100 companies is higher than all companies (0.95% compared to 0.91%).

Large companies make the most substantial contributions The top 100 South African companies accounted for 78% of total CSI expenditure in 2017. Twenty-one of these companies spent more than R50 million each on social investment ($3.5 million3) in 2017, 11 of which spent more than R100 million ($7 million). Furthermore, the median CSI expenditure in Trialogue’s primary research sample was R2.2 million ($1.5 million) in 2017, up from R19 million ($1.4 million) in the previous year. A few large US companies continue to make the most significant philanthropic contributions, with 27% of surveyed companies donating more than $50 million each in 2016. Overall, total giving per company ranged from $440 000 to $2.2 billion, with the median total giving for 2016 amounting to $18.9 million. Approximately 15% of global companies surveyed spent more than $50 million on philanthropic initiatives.

Most generous sectors differ by country In the US, communication companies were the frontrunner in overall philanthropic activity, with the highest median total giving as a percentage of revenue and pre-tax profit; 0.2% and 1.3% respectively. The consumer staples industry also made significant contributions, with 0.2% and 1% median total giving as a percentage of revenue and pre-tax profit. The energy sector had the lowest median total giving as a percentage of revenue (0.07%) and the materials sector had the lowest median total giving as a percentage of pre-tax profit (0.78%).

2

Average annual exchange rate for 2016 ($1: €0.940), and average exchange rate for 2014 ($1: 0.784): https://www.irs.gov/individuals/ international-taxpayers/yearly-average-currency-exchange-rates.

3 Average exchange rate for year ended February 2017 ($1: R14.2595), and average exchange rate for year ended February 2016 ($1:R13.5013). http://www.sars.gov.za/AllDocs/LegalDoclib/Rates/LAPD-Pub-AER-2012-02%20-%20Average%20Exchange%20Rates%20 Table%20A.pdf.


187

CHAPTER FOUR

Trialogue’s best estimate calculations show that in South Africa the mining and quarrying sector is the biggest contributor to social investment. This sector accounted for approximately 32% of total CSI spend in 2017. In second place were ‘other sectors’ whose contributions were an estimated 28% of CSI spend and where the oil and petroleum sector accounted for 66% of contributions made. The financial services sector came in third with contributions amounting to approximately 17% of total CSI spend.

South Africa has the fewest corporate foundations All Latin American; 76% of US; 55% of European; 47% of Asian, and just 25% of South African companies had corporate foundations or trusts. US, Latin American and Asian companies invested at least half of total cash from their foundations, and European companies invested less than 30% of total cash from their foundations.

Education, social services and health prioritised in South Africa and the US Education was supported by 91% of companies surveyed in South Africa and received almost half (48%) of total CSI expenditure. In the US, education received the largest proportion (30%) of total CSI spend. In South Africa, social and community development and health received the second (15%) and third (12%) largest proportion of total CSI spend, respectively. In the US, these sectors are combined under health and social services, which was also ranked second, with 26% of total CSI spend.

US giving more focused than South Africa US companies maintained the number of focus areas in 2016, at an average of 1.4. South African companies have slightly increased their number of focus areas, from an average of 4.5 different development areas in 2016, to 4.6 development areas in 2017.

European companies at the forefront of international giving Almost all (95%) European companies engaged in international giving. US, Asian and Latin American companies followed, at 65%, 56% and 44% respectively. South Africa lagged behind as only 11% of companies gave internationally. Only South African and US companies specified their proportion of total giving to international beneficiaries. US companies contributed 20% of their total giving to international beneficiaries while South African companies attributed only 3% of total giving to international beneficiaries.

US and Asian companies lead non-cash giving In 2017, 45% of South African companies reported non-cash giving as part of their CSI expenditure, up from 35% in 2016. The value of non-cash giving as a proportion of total giving, however, decreased from 13% in 2016 to 10% in 2017. On average, US companies made 18% non-cash contributions in 2016, with almost half (47%) of the contributions attributable to the communications sector and the least contributions (3%) attributable to the utilities and financial sectors. Globally, Asian companies made 17% non-cash contributions in 2016, followed by Latin America and Europe, at 11% and 10% respectively.

Employee involvement remains key The proportion of South African companies with formal employee volunteer programmes dropped slightly, from 70% in 2016, to 68% in 2017. Most South African companies (95%) embarked on companyorganised volunteering events, which also had the greatest employee participation (59%). Europe had the most companies offering company time to volunteer domestically and internationally (94% and 76% respectively). Forty-three percent of Latin American and 78% of Asian companies offered domestic volunteer time to employees, and 29% of Latin American and 39% of Asian companies offered international volunteer time to employees.

188


In South Africa, 58% of companies gave employees time off work to volunteer. In the US, 61% of companies offered ’paid release time’ domestically and 32% offered this internationally.

GLOBAL CORPORATE GIVING

The proportion of US companies offering domestic pro bono services remained constant between 2014 and 2016, at 51%, and those offering international pro bono services increased from 22% to 40% in the same period. US companies that offered domestic skills-based volunteer programmes (pro bono service and board leadership) had the second highest volunteer participation rates in the US, averaging 33%. In comparison, over 40% of Asian and European companies offered domestic pro bono programmes, and over 30% offered international programmes. In Latin America and South Africa however, less than 30% of companies undertook pro bono programmes. Europe ranked highest in matching programmes, with 73% of its companies matching employee donations, followed by Asia (50%). In comparison, 40% of South African companies surveyed in 2017 matched their employee contributions. Matched employee donations remain low in Latin America, where 14% of companies offered a corporate match.

Measuring outcomes has become more strategic in the US At least two-thirds of South African companies claimed to measure project outcomes and/or impacts of all their projects in 2017. Of these companies, 91% relied on performance indicators. The percentage of US companies that measured the outcomes or impacts of their social investments increased, from 79% in 2015 to 81% in 2016. Most companies no longer evaluate social outcomes or impacts from all their grants, rather focusing on the measurement of their strategic programmes. ■

Trialogue is the Southern African Local Authority of the CECP Global Exchange, uniting country-based, mission-driven corporate social engagement organisations to advance the corporate sector as a force for good around the world. For more information about CECP or to download the reports cited in this article, visit www.cecp.co.


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