/ 16 April 2010

Manage CSI with heart

Manage Csi With Heart

Corporate social investment (CSI) has become a buzzword in the past decade, but the quality of initiatives has been inconsistent and unreliable.

Numerous well-intentioned CSI programmes have struggled to reach their targets and generate sustainable outcomes.

Only recently have companies started to embed their social initiatives strategically into their core business planning, with the goal of creating synergy between financial and social returns. This new trend has been accompanied by a call to professionalise the R5.1-billion industry.

‘CSI used to be seen as a cost centre, not as a benefit to the company,” says Michelle Yorke, director of consultancy firm CSI Solutions.

‘Professionalisation of CSI makes companies see its value for the business, which also means benefits for the community [where the projects are being implemented].”

Companies used to focus mainly on spending allocated CSI budgets, but attention has started to shift towards best practice and benchmarking standards that ensure investments are used to their full potential. ‘Not nearly enough businesses assess outcomes as yet, but it’s becoming a trend,” says Yorke.

Until recently, many companies regarded CSI as little more than a means to gain points on black economic empowerment (BEE) scorecards — 1% or more of the net profits spent on social initiatives gains points in the enterprise development category.

‘CSI is seen as a relatively easy way to gain BEE points,” says Yorke. ‘Companies didn’t see any other benefit. They did CSI without measuring or seeking returns.”

This approach had a detrimental effect on CSI initiatives, which often folded as soon as a company finished its funding commitment. ‘There have been millions and millions of wasted funds and lots of white elephants,” Yorke says.

One way of holding companies to account for their social investments would be the establishment of an industry body that governs CSI investments countrywide, says Engen’s CSI manager, Khanyisa Balfour. It would be an effective way of ensuring that CSI is not only ‘an intellectual exercise, but communities actually benefit.

The trend to professionalise is there. Now we need to ensure compliance,” Balfour says. The proposed body would implement a code of good practice and ensure that companies who want to claim BEE points adhere to them. It would provide strategic support to companies, the government and NGOs and assist with benchmarking, says Balfour.

There is also a trend to ensure that CSI initiatives link in with the government’s development agenda, says Yorke. This is important for long-term sustainability of CSI initiatives, so that recipients can eventually be weaned off donor dependency or projects can in due course become part of government run public programmes.

‘There is definitely a move towards sustainability, but while 90% of companies talk about it, most don’t understand what it really means,” says Yorke.

‘CSI expectations are often unrealistic and sometimes completely miss the point. For example, a feeding scheme — a favourite among CSI initiatives — can by its very nature never be self-sustainable, while a community garden fulfils this potential.

‘It is hugely important to connect projects with the national development agenda and not go off on a tangent. It has become absolutely imperative to work with the government,” says Yorke.

This means that ongoing dialogue and collaboration between companies, NGOs and government departments is essential when planning and managing CSI initiatives.

‘The drop-and-go strategy doesn’t work,” says Balfour. ‘Instead of ticking boxes, we need to engage communities to understand what their real needs are.

CSI is no longer just about financial contributions, but also about skills transfer and capacitating NGOs.”

To be able to implement all these changes to social investment strategies, most corporate CSI managers will have to deepen their knowledge of the industry and acquire a whole new set of skills.

The Graduate School of Business at the University of Cape Town launched a postgraduate diploma in CSI management practice in April last year, specifically aimed at the professionalisation of the sector.

‘The benchmarks of CSI have been fairly mediocre. We are hoping to improve the basic standards, also by looking at global best practices,” says the school’s head of corporate learning, Linda Buckley.

The 18-month course aims to assist CSI practitioners to develop more effective policies within their companies. The result will be positive for both the companies and communities, says Buckley.

‘We can see a shift from almost desperate spending [to gain BBE points] towards strategic investments, with financial returns for the company and poverty alleviation on the ground,” says Buckley.