Corporate social nvestment (CSI) has evolved significantly from its humble beginnings in South Africa in the mid-1970s. It is no longer seen as a voluntary activity but has become a business imperative.
BEE legislation, the industry transformation charters and the global emphasis on sustainability together result in a more strategic, professional and achievement-based approach to CSI than in the past. This has a significant influence on the non-profit organisation (NPO) sector in South Africa, which is trying to adapt to this changing environment while cashing in on this ‘new†stream of corporate funding.
Although the partnership between NPOs and corporates is seen as fundamental to addressing the pressing socio-economic challenges that South Africans are faced with, it is marred by misunderstandings, differences in expectations and agendas, communication barriers and disappointments, among others.
One of the problems that NPOs are faced with in dealing with CSI practitioners is the reality that the people responsible for corporates’ CSI budgets often do not have sufficient knowledge and experience of community development to make informed decisions.
The majority of CSI functions have been in existence for less than five years, so there is no best practice established for setting up schemes. Only the largest corporates can afford a special department to assess and manage CSI programmes. Research shows that one full-time employee is needed to effectively manage an annual CSI budget of R1,45-million.
The CSI function often sits within the human resource or marketing departments and decisions around CSI spending are flavoured by departmental agendas and not necessarily by good community development practice.
For example, a corporate might find it difficult to understand why a large capital injection into a community might not be in the best interest of the community.
It needs to be explained that a community organisation’s capacity to deal with large amounts of funding needs to be developed before it can absorb and successfully utilise large donations. In instances where corporates value and recognise the experience of people working at grassroots level, the potential for corporate funding to deliver real value to the community is much better.
Corporates often complain about NGOs acting merely as a funding conduit, diluting funds meant to address a desperate social need. There is some merit in corporates’ concerns where an NGO disburses money to communities without adding value, such as ensuring that effective controls and adequate reporting are in place.
Similarly, corporates who bypass organisations experienced in community work and fund communities directly can easily fall into the same trap.
The remains of unutilised buildings, decorated with rusted signs of corporate donors, or barren vegetable gardens without a single cabbage or carrot, emphasise the importance of responsible CSI practice. Communities are often blamed for fraudulent activities or ineffectiveness, but are they the only ones to blame?
In a study called The Cinderellas of Development? Funding CBOs in South Africa, commissioned by Interfund in 2004, most community-based organisations conceded that they lack knowledge and skills around fundraising, financial management, project management, planning and reporting.
It is clear that capacity-building and an organised structure of assistance are crucial in developing the skills and confidence communities need to cope with their challenges and to take charge of their future.
This must include guidance on governance, administrative methods and financial controls. Training and ‘workshopping†alone is not enough. Communities need someone to ‘walk the road†with them in a supportive mentoring relationship and a leadership ‘coaching†capacity.
It is essential that CSI spending should incorporate a capacity building component into all projects that are being funded. Unfortunately capacity-building is not always a popular line item in CSI budgets, and project outcomes such as the establishment of adequate reporting procedures or a financial management system are not necessarily seen as an impressive achievement. Those outcomes are, however, just as important as the construction of a school building, albeit not as glamorous.
The NPO sector welcomes greater corporate involvement but recognises that it brings with it some challenges. As stakeholders gain greater interest in CSI achievements, CSI programmes enter the realm of public scrutiny. As a result there is a growing demand for NPO partners to deliver against targets and manage their programmes efficiently.
Through media exposure of development mishaps (like the recent Mama Jackie saga) and a growing understanding that social upliftment is a long and difficult pro-cess, the public and other corporate stakeholders will be impressed by CSI programmes that invest in true community development and that are able to communicate honestly about their challenges and successes.
The corporate and NPO sectors need each other. In order for this partnership to mature and make a real contribution to the betterment of South Africa, the role players need to be committed and willing to really listen to each other and to value, respect and use each other’s expertise. Shouldering the responsibility needs to come from both sides.
Lance Carr and Ané Spies work for Unsung Heroes, a community development organisation specialising in building capacity within community-based organisations