Corporate social investment (CSI) in South Africa 30 August 2017 - - PowerPoint PPT Presentation

30 August 2017

Presented by: DAMIAN WATSON

Corporate social investment (CSI) in South Africa

Agenda

• Evolution of social development and Trialogue
• State of CSI in South Africa
• Forecasting trends
• Fundraising implications

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10 years of social development in South Africa

2007: finalised BEE Codes of Good Practice gazetted 2012: National Development Plan approved 2015: SDGs ratified 2016: Revised BBBEE Codes of Good Practice gazetted

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2016: Draft NPO Bill released 2009: King III published 2016: King IV published 2016: #Fees must fall protests 2015: JSE SRI Index replaced with the FTSE/JSE Responsible Investment Index Series

Ten years of Trialogue and our CSI conference

2007: First ‘Making CSI Matter’ conference at Indaba hotel 2009: Launch of the Social Map 2014: Strategic CSI award launched 2017: 10th conference renamed ‘Business in Society’ conference 2017: Launch of the Trialogue Knowledge hub 4 2017: 20th CSI Handbook renamed ‘Business in Society’ handbook

• Over 70 blue-chip South African corporates supported with their CSI

strategies, implementation, measurement and reporting.

• Over 200 CSI practitioners trained by Trialogue
• Over 3 000 delegates at our conferences

2016: Southern Africa partner of CECP’s Global Exchange 2016: Trialogue becomes 51% black-owned 2012: Trialogue Level 1 BEE score 2015: Funders Guide launched 2013: Trialogue launches CSI forums 2006: CIDA becomes shareholder of Trialogue 2016: Partner with CLEAR-AA on African research

State of CSI in South Africa

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• Corporate

Responsibility (CR)

• Corporate Social

Investment (CSI)

• Sustainable Business
• Sustainability
• Corporate citizenship
• Triple-bottom-line
• Corporate Responsibility (CR)
• Socio-economic development (SED)
• (Strategic) philanthropy
• Corporate community involvement

(CCI)

Terminology

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

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CSI expenditure in South Africa is estimated to be R8.6 billion in 2016

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Source: Trialogue CSI Handbook 19th edition Base year: 2001

1 2 3 4 5 6 7 8 9 CSI expenditure (R billion) Nominal versus real growth in CSI expenditure Nominal Real (adjusted for inflation) Base year: 2001

A third of companies report non-cash giving, which constitutes 13% of total CSI expenditure

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Source: Trialogue CSI Handbook 19th edition

94 95 88 88 90 87 6 5 12 12 10 13 10 20 30 40 50 60 70 80 90 100 2011 n=97 2012 n=83 2013 n=88 2014 n=88 2015 n=77 2016 n=82 % total expenditure non-cash cash

Like last year, 70% of companies have a formal employee volunteering programme

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Source: Trialogue CSI Handbook 19th edition

78 73 70 70 22 27 30 30 10 20 30 40 50 60 70 80 90 100 2013 n=103 2014 n=99 2015 n=77 2016 n=64 % corporate respondents No Yes

CSI expenditure continues to be concentrated nationally and in Gauteng

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Source: Trialogue CSI Handbook 19th edition 2016: n = 82, corporate support 2016: n = 82, CSI expenditure

70 60 50 40 30 20 10 10 20 30 40

International Northern Cape Mpumalanga Limpopo North West Free State Eastern Cape KwaZulu-Natal Western Cape Gauteng National % corporate support % CSI expenditure

Education continues to receive the most support

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Source: Trialogue CSI Handbook 19th edition 2016: n = 81, % corporate expenditure; multiple responses 2016: n = 81, % corporate support

100 80 60 40 20 20 40 60 Other Safety and security Disaster relief Housing and living conditions Non-sector specific donations and grants Arts and culture Environment Sports development Entrepreneur and small business support Food security and agriculture Health Social and community development Education % Corporate support % CSI expenditure

Half of education expenditure goes to school-level education and 29% to tertiary

Source: CSI Handbook 19th Edition 2016 n = 71

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17 22 28 29 3 Early childhood development General education Further education and training Tertiary education Adult education % CSI education spend

Teacher development receives 11% of the education funds

Source: CSI Handbook 19th Edition 2016 n = 73

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27 25 11 16 6 3 3 9

Bursaries, scholarships, university chairs Infrastructure, facilities and equipment Teacher development Additional learner programmes Curriculum development School governance and functionality Special needs interventions Other % CSI education spend

Over 80% of corporates fund NPOs, which received 45% of total CSI expenditure

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Source: Trialogue CSI Handbook 19th edition 2016: n = 79, corporate support; multiple responses 2016: n = 79, CSI expenditure

100 80 60 40 20 20 40 60 Other To political parties To religious institutions To community trusts To government departments To industry initiatives To for-profit service providers To government institutions To non-profit organisations % Corporate support % CSI expenditure

Corporates surpassed government as the largest source of NPO funding in 2016

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Source: Trialogue CSI Handbook 19th edition 2016: n = 145

% NPO response % NPO income 80 70 60 50 40 30 20 10 10 20 Investment Income Debt Intermediary NPOs Other The National Lotteries Board Trusts/foundations Self generated Foreign state donors Private individuals Government (South African) Foreign independent donors Corporates

Over half of the NPOs (56%) increased their self-generated income

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Source: Trialogue CSI Handbook 19th edition 2016: n =

13 16 25 31 38 40 43 45 47 47 49 56 62 45 40 53 38 26 31 34 33 30 32 20 25 39 35 16 24 34 26 21 20 23 19 24

• 50

100 Debt Intermediary NPOs The National Lotteries Board Foreign state donors Other Corporates Government (South African) Private individuals Trusts/foundations Investment income Foreign independent donors Self-generated % NPO response Increased Stayed the same Decreased

n = 8-119 depending

• n category

Documents required by corporates before funding NPOs

10 20 30 40 50 60 70 80 90 Other Letters of reference BBBEE status Latest annual report Copy of founding document Financial statements Proof of PBO registration Proof of Section 18A status

% corporate response

Source: CSI Handbook 15th Edition N = 104

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Anglo American and Nedbank were perceived by companies and NPOs as delivering the most impact

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Source: Trialogue CSI Handbook 18th edition Companies’ ranking: n = 75 NPO’s rankings : n = 131

Corporates’ ranking of corporates Company Number of mentions 1 Anglo American 18 2 Nedbank 16 3 Woolworths 15 4 MTN 11 5=* Old Mutual 10 7 SAB Miller 9 8=* First Rand FNB 6 10=* Multichoice Telkom Transnet 5 NPOs' ranking of corporates Company Number of mentions 1 Nedbank 27 2 Anglo American 23 3 Old Mutual 18 4 ABSA 13 5= FNB Investec Vodacom 11 8=* Standard Bank Woolworths 10 10=* Discovery Pick n Pay 8

Africa Tikkun was perceived by companies and NPOs as delivering the most impact

Source: Trialogue CSI Handbook 18th edition

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Corporates' ranking of NPOs Company Number of mentions

1 Afrika Tikkun 8 2 Gift of the Givers 6 3=* Smile Foundation Stop Hunger Now 4 5=* CANCA, Doctors without borders, NECT PROTEC, Tshikululu 3 10=* Buffelshoek Trust ENACTUS Ilifa Labantwana Inyathelo Love to Give MES Nelson Mandela Childrens Fund Sparrow Schools SPCA Time for Change WESSA 2

NPOs' ranking

• f NPOs

Company Number of mentions

1 Afrika Tikkun 8 2 Inyathelo 6 3=* Gift of the Givers, Reach for a Dream 5 5=* BRIDGE CHOC Greater Good South Africa, Ikamva Youth Ilifa Labantwana JAM LIV Village Smile Foundation 4

Forecasting trends

CSI is becoming more strategic

Social benefit Corporate benefit

Charitable grantmaking Developmental CSI Strategic CSI Commercial grantmaking

No visible benefit Recognition

• f

contribution Stakeholder benefit Competitive benefit Beneficial impact Beneficial

• utcomes

Visible

• utputs

No visible benefit

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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

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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

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Greater employee engagement

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"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)

More consumer buy-in

"People are going to want, and be able, to find out about the citizenship of a brand, whether it is doing the right things socially, economically and environmentally." Mike Clasper President of Business Development, Proctor and Gamble (Europe)

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Increasing collaboration

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“There is great value in diversity when solving complex problems" Barbara Dale-Jones BRIDGE “Alone we can do so little; together we can do so much” Helen Keller

More innovative financing

“The Social Impact Bond shines a spotlight on what works.” George Overholser Investor and Social Entrepreneur “A crowdfunding platform broadens the funding market and allows investors to finance the project irrespective of location.” Prisiliya Madan, Cyclists for Change

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Rise of technology and data

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“Without big data, you are blind and deaf and in the middle of a freeway.” Geoffrey Moore, author “Hiding within those mounds of data is knowledge that could change the life of a patient, or change the world.” Atul Butte, Stanford University

Fundraising implications

Target your approach to companies whose work is aligned to what you do

• Seek a variety of funding sources to address different operational

requirements i.e. not only corporates

• Understand strategic CSI positioning of company (including

business strategy and how CSI supports it)

• Target fewer, more relevant CSI budgets i.e. those where your
• ffering is aligned to the CSI strategy and the company’s business
• Strive to engage at a direct and senior level (rather than submitting

unsolicited proposals)

• Involve your leadership in process to secure funding and agree

terms

• Ensure the ‘compliance’ boxes are ticked
• Be proactive in suggesting win-win solutions

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Work with companies as partners

• Identify financial and non-financial needs suited to company
• Strengthen relationship through volunteerism offering
• Consider if/how a company’s consumers or other stakeholders can

be involved in the work you do or in raising funds

• Adopt a partner mindset
• Support company brand where appropriate, including with the use
• f social media
• Build in monitoring (and evaluation if possible) as part of the deal

and consider how technology can by used to support this

• Be transparent in reporting of performance and financials

(challenges to be shared and confronted, not hidden)

• Review and consider how you could be involved in sector-wide

collaborative initiatives

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Questions

damian@trialogue.co.za cathy@trialogue.co.za