Surprise jump in big business social investment spending
South Africa’s large companies spent about R9.7-billion on corporate social investment (CSI) in 2018, the bulk of which went to projects or causes in education, social development and health.
CSI expenditure was 7% higher than the R9.1-billion spent in 2017, and after accounting for inflation, it also had the first real increase in social responsibility spend in five years, according to the CSI and sustainability consultancy Trialogue.
In the 21st edition of Trialogue’s Business in Society Handbook, the consultancy found that 92% of the companies surveyed spent money on education, which accounted for 44% of their social spend. But this is less than the 2014 record figure, when education accounted for 49% of social expenditure.
Cathy Duff, the director at Trialogue, said education had consistently remained the biggest social expenditure item.
“It fluctuates by a few percentage points each year, but I think it sits at around half of spend and it’s where most companies are investing because companies need these skills for their future employees and economic pipelines.” Social development was the second-most supported sector, which received funding from 74% of the companies surveyed, while health received funding from 53% of the companies.
Seventy-four companies and 254 nonprofit organisations participated in the survey.
Of the companies surveyed by Trialogue, 62% reported an increase in CSI expenditure in 2018, 24% reported a decrease and 14% said expenditure remained unchanged.
Duff said the most common reason companies increased CSI spending was when projects required it, which differed from previous years when increases were linked to profits.
“Interestingly, those who reported a decrease this year said it was due to falling profits.
“So you can see that there’s a tough economic environment that has led to some companies reducing spend, but more companies actually increased spend,” she said.
Projects in urban and peri-urban areas received 57% of CSI expenditure; rural areas received 39%.
“The finding is quite encouraging because almost 40% of expenditure is going to rural areas. The majority of our population live in urban areas [where] even though there might be a lot of access to certain things, but there are still a lot of barriers and social issues,” Duke said.
She added that a reason companies favoured urban funding was that they largely funded projects near their operations.
For instance, Gauteng and the Western Cape received the highest spend of CSI expenditure at 16% and 12% respectively. National projects which are operating in two or more provinces, received 46% of social spend.
Tebogo Tshwane is an Adamela Trust business journalist at the M&G
This has been amended to reflect the correct amounts