Corporate social investment (CSI) in South Africa 30 August 2017 Presented by: DAMIAN WATSON
Agenda • Evolution of social development and Trialogue • State of CSI in South Africa • Forecasting trends • Fundraising implications 2
10 years of social development in South Africa 2016: #Fees must fall 2015: JSE SRI Index protests replaced with the FTSE/JSE Responsible Investment Index 2016: King IV Series published 2016: Draft NPO Bill 2016: Revised released BBBEE Codes of 2015: SDGs Good Practice ratified gazetted 2012: National 2009: King III Development published Plan approved 2007: finalised BEE Codes of Good Practice gazetted 3
Ten years of Trialogue and our CSI conference 2017: 10 th conference renamed ‘Business in Society’ conference 2017: 20 th CSI 2016: Southern Africa Handbook renamed partner of CECP’s Global ‘Business in Society’ Exchange handbook 2015: Funders Guide launched 2017: Launch of the Trialogue Knowledge hub 2013: Trialogue 2016: Partner with launches CSI CLEAR-AA on African 2016: Trialogue becomes forums 2014: Strategic CSI research 51% black-owned award launched 2012: Trialogue 2007: First ‘Making CSI Level 1 BEE score Matter’ conference at Indaba hotel 2009: Launch of the Social Map • Over 70 blue-chip South African corporates supported with their CSI 2006: CIDA becomes shareholder of Trialogue strategies, implementation, measurement and reporting. • Over 200 CSI practitioners trained by Trialogue • Over 3 000 delegates at our conferences 4
State of CSI in South Africa
Terminology • Sustainable Business • Corporate • Sustainability Responsibility (CR) • Corporate citizenship • Triple-bottom-line • Corporate Responsibility (CR) • Socio-economic development (SED) • Corporate Social • (Strategic) philanthropy Investment (CSI) • Corporate community involvement (CCI) 6
Defining CSI • A social intervention with a developmental intent • External to core business function • Not in direct pursuit of revenue or profit, but can cater to the interest of business 7
CSI expenditure in South Africa is estimated to be R8.6 billion in 2016 Nominal versus real growth in CSI expenditure 9 8 Nominal CSI expenditure (R billion) 7 6 5 4 Real 3 (adjusted for 2 inflation) 1 0 Base year: 2001 Source: Trialogue CSI Handbook 19 th edition 8 Base year: 2001
A third of companies report non-cash giving, which constitutes 13% of total CSI expenditure 100 5 6 10 12 12 13 90 80 % total expenditure 70 60 non-cash 50 94 95 90 88 88 87 cash 40 30 20 10 0 2011 n=97 2012 n=83 2013 n=88 2014 n=88 2015 n=77 2016 n=82 Source: Trialogue CSI Handbook 19 th edition 9
Like last year, 70% of companies have a formal employee volunteering programme 100 90 22 27 30 30 80 % corporate respondents 70 60 No 50 Yes 40 78 73 70 70 30 20 10 0 2013 n=103 2014 n=99 2015 n=77 2016 n=64 Source: Trialogue CSI Handbook 19 th edition 10
CSI expenditure continues to be concentrated nationally and in Gauteng National Gauteng Western Cape KwaZulu-Natal Eastern Cape Free State North West Limpopo Mpumalanga Northern Cape International 70 60 50 40 30 20 10 0 10 20 30 40 % corporate support % CSI expenditure Source: Trialogue CSI Handbook 19 th edition 11 2016: n = 82, corporate support 2016: n = 82, CSI expenditure
Education continues to receive the most support Education Social and community development Health Food security and agriculture Entrepreneur and small business support Sports development Environment Arts and culture Non-sector specific donations and grants Housing and living conditions Disaster relief Safety and security Other 100 80 60 40 20 0 20 40 60 % Corporate support % CSI expenditure Source: Trialogue CSI Handbook 19 th edition 12 2016: n = 81, % corporate expenditure; multiple responses 2016: n = 81, % corporate support
Half of education expenditure goes to school-level education and 29% to tertiary 3 17 Early childhood development 29 General education Further education and training 22 Tertiary education 28 Adult education % CSI education spend Source: CSI Handbook 19 th Edition 13 2016 n = 71
Teacher development receives 11% of the education funds Bursaries, scholarships, university 9 chairs 3 Infrastructure, facilities and 27 3 equipment 6 Teacher development Additional learner programmes 16 Curriculum development School governance and functionality 25 11 Special needs interventions Other % CSI education spend Source: CSI Handbook 19 th Edition 14 2016 n = 73
Over 80% of corporates fund NPOs , which received 45% of total CSI expenditure To non-profit organisations To government institutions To for-profit service providers To industry initiatives To government departments To community trusts To religious institutions To political parties Other 100 80 60 40 20 0 20 40 60 % Corporate support % CSI expenditure Source: Trialogue CSI Handbook 19 th edition 15 2016: n = 79, corporate support; multiple responses 2016: n = 79, CSI expenditure
Corporates surpassed government as the largest source of NPO funding in 2016 Corporates Foreign independent donors Government (South African) Private individuals Foreign state donors Self generated Trusts/foundations The National Lotteries Board Other Intermediary NPOs Debt Investment Income 80 70 60 50 40 30 20 10 0 10 20 % NPO response % NPO income Source: Trialogue CSI Handbook 19 th edition 2016: n = 145 16
Over half of the NPOs (56%) increased their self-generated income Self-generated 56 20 24 Foreign independent donors 49 32 19 Investment income 47 30 23 Trusts/foundations 47 33 20 Private individuals 45 34 21 Government (South African) 43 31 26 Increased Corporates 40 26 34 Other 38 38 24 Stayed the same Foreign state donors 31 53 16 Decreased The National Lotteries Board 25 40 35 Intermediary NPOs 16 45 39 Debt 13 62 25 - 50 100 n = 8-119 depending % NPO response on category Source: Trialogue CSI Handbook 19 th edition 2016: n = 17
Documents required by corporates before funding NPOs Proof of Section 18A status Proof of PBO registration Financial statements Copy of founding document Latest annual report BBBEE status Letters of reference Other 0 10 20 30 40 50 60 70 80 90 % corporate response Source: CSI Handbook 15 th Edition 18 N = 104
Anglo American and Nedbank were perceived by companies and NPOs as delivering the most impact NPOs' Company Number of Corporates’ Company Number of ranking of mentions ranking of mentions corporates corporates 1 Nedbank 27 1 Anglo American 18 2 Anglo American 23 2 Nedbank 16 3 Old Mutual 18 3 Woolworths 15 4 MTN 11 4 ABSA 13 5=* Old Mutual 10 5= FNB 11 7 SAB Miller 9 Investec Vodacom 8=* First Rand 6 8=* Standard Bank 10 FNB Woolworths 10=* Multichoice 5 10=* Discovery 8 Telkom Pick n Pay Transnet Source: Trialogue CSI Handbook 18 th edition 19 Companies’ ranking: n = 75 NPO’s rankings : n = 131
Africa Tikkun was perceived by companies and NPOs as delivering the most impact Corporates' Company Number of NPOs' ranking Company Number of ranking of NPOs mentions of NPOs mentions 1 Afrika Tikkun 8 1 Afrika Tikkun 8 2 Gift of the Givers 6 2 Inyathelo 6 3=* Smile Foundation 4 Stop Hunger Now 5=* CANCA, 3 3=* Gift of the Givers, Reach 5 Doctors without borders, for a Dream NECT 5=* BRIDGE 4 PROTEC, CHOC Tshikululu Greater Good South 10=* Buffelshoek Trust 2 Africa, ENACTUS Ikamva Youth Ilifa Labantwana Ilifa Labantwana Inyathelo JAM Love to Give LIV Village MES Smile Foundation Nelson Mandela Childrens Fund Sparrow Schools SPCA Time for Change WESSA Source: Trialogue CSI Handbook 18 th edition 30
Forecasting trends
CSI is becoming more strategic Beneficial impact Strategic Developmental CSI CSI Social benefit Beneficial outcomes Visible outputs Charitable Commercial grantmaking grantmaking No visible benefit Recognition Stakeholder Competitive No of benefit benefit visible contribution benefit Corporate benefit 22
More focused CSI "That's been one of my mantras — focus and simplicity. Simple can be harder than complex: You have to work hard to get your thinking clean to make it simple. But it's worth it in the end because once you get there, you can move mountains .” Steve Jobs "If you chase two rabbits, both will escape" Unknown 23
Involvement in advocacy work “Most of the important things in the world have been accomplished by people who have kept on trying when there seemed to be no help at all.” Dale Carnegie 24
Greater employee engagement "In my view the successful companies of the future will be those that integrate business and employees' personal values. The best people want to do work that contributes to society with a company whose values they share, where their actions count and their views matter ." Jeroen van der Veer, Committee of Managing Directors (Shell) 25
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