/ 1 January 2002

Corporate social investment ‘comes out of the closet’

While corporate social investment (CSI) in South Africa has come a long way since the early 1970s, it is the past decade that has seen the really major shifts, with the result that CSI has in effect, “come out of the closet” and into its own.

The 1980s were epitomised by political motivations and corporates, the government and the non-profit sector tended to work in isolation. The 1990s were about rediscovery, talking and tentatively edging forward.

During this period, for the larger corporations, CSI moved from a “nice to have” to a ‘”must have”. Recognising that CSI can enhance a company’s image, they began to actively seek recognition for their good works.

The 2000s have brought a new era of CSI to South Africa. Companies are engaging communities in a far wider variety of ways ? including donating products or services, providing training facilities, seconding executives and managers, and so on. Many corporations are finding they can leverage their cash giving by adopting a comprehensive approach that includes a portfolio of cash contributions as well as non-cash assets.

By taking this approach companies are finding that they can increase their impact, sometimes at a lower cost, by providing a mix of offerings that is of greatest value to partner organisations and the highest benefit and efficiency for the company.

Executive management is getting the message that CSI can be good for business and communities. Potential benefits include: enhancing the caring image of the company; improving relationships with the community; improving employee loyalty and morale; helping to stabilise the economic and social environment for the long-term survival of the company; supporting corporate strategic goals; and being seen as a “neighbour of choice” by communities.

Another major motivator for taking CSI seriously is that stakeholders such as the government, investors, customers, employees and public-interest groups are holding companies to a higher standard of corporate citizenship, demanding that their net impact on society is positive. To help fulfil this demand, management is turning to CSI as a tool for transformation ? and in turn CSI is becoming more strategic.

As CSI becomes increasingly recognised for its valuable role, so corporates are striving to ensure their programmes comprise “best practice” principles. Both in South Africa and in modern economies, there has been a discernable progression in the approach to CSI, with companies tending nowadays to view their community development activities from a strategic perspective.

As a CSI programme becomes more strategic, so the “stakes” are raised ? the programme requires more resources and wider involvement from people within the company, including senior executives who will be called on to play an active role.

The benefits also increase as the effect that the programme has on communities grows, and the company becomes increasingly recognised for its contribution. Strategic CSI is more than just operating an efficient CSI programme and giving away money in an orderly fashion. Strategic CSI takes the programme to a new level within the business.

At this level it becomes integrated into mainstream activities, objectives are set and aligned to those of the business, and measures are put in place for evaluation and readjustment.

So CSI in South Africa appears to be on firm ground, though it faces a set of new challenges. One of the biggest is the HIV/Aids pandemic, which needs to be prioritised. Furthermore, partnerships with the government have become a necessary choice for effective development; and creative mechanisms for more meaningful giving and the engaging of the entire company, need to be further explored.

Other challenges include constantly infusing more professionalism into the practice of CSI; engaging in active debate around topical issues; and balancing strategic thinking with the needs of the impoverished. There is no doubt that as companies recognise the need to embrace a value system of good corporate citizenship, so CSI will continue to be recognised as valuable to business and society.

Vanessa Rockey is the editor of The CSI Handbook, published by Trialogue. Tel: (021) 683 7417 or visit www.csimatters.co.za.