Last week in Business Day (2 May) Lauren Gillis challenged big business to take a critical look at the impact of corporate social investments (CSI) on the developmental issues they try to address in society. She accuses them of throwing money at "the problem" without making a business case for their contributions to non-profits or charities who deserve funding support. Businesses, which are adept at seeking returns on their investments, (ROI) somehow fail to apply this same analogy to the social development sector, which according to her article amounts to R8bn in SA.
Considering that R30 billion of our taxes could not be accounted for in 2013, R8 billion flowing from the coffers of corporations into social investment projects is not that bad. The criticism, however, is against the failure of corporates to evaluate the impact of these investments on civil society. Both corporations and non-profits are not good at measuring the nebulous concept of social value because the creation thereof often takes effect over the long-term. Businesses are too impatient for this and thrive on instant gratification.
When impact and measurement are central to measuring performance, why are businesses so inept at doing this for CSI? The failure is based on the premise that companies often view their donations as conscience money, as "giving back", and often it does not matter what they are giving back as long as it is influenced by what is in vogue at the time - HIV, solar energy, communication technology, technological innovation, etc. It rarely has to do with a considered contribution to alleviate chronic and persistent structural problems in a systemic way over a period of time to ensure positive outcomes.
One of the few exceptions is the Transnet Foundation. They set aside a sizeable budget to reduce primary health-care challenges by creating one of the world's most innovative health-care trains Phelophepa1 and 2 to traverse 38 rural stops each, in 7 provinces, providing the poor with health-care screenings (including cancer and diabetes), dental care, eye-care and the provision of spectacles, individual counselling therapy and community counselling workshops and outreach programmes. It uses its own resources, namely refurbished trains, to address rural health challenges.
These trains are high tech, well resourced, and tightly managed, targeting rural health-care needs carefully. They use medical students from all SA's universities' medical faculties to do their internships on the train, providing them with opportunities to gain experience in the field and to learn and practice their skills on-site in a context far better equipped than most clinics or hospitals. In the course of their work, the trains' staff builds important networks with local clinics and hospitals and ultimately their performance can be measured and monitored in terms of costs per capita and impact. Where social value can be truly tested, it will be in its partnership with government - the only entity equipped to take such projects to scale.
And that is the essence of my critique of the BD Live article (Lauren Gillis). No matter how much business throws at social development or even have success in making a business case for their social investments, unless they engage government about key national priorities and enter into partnerships about targets, outcomes, the transference of skills, and taking projects to scale across the nation, CSI will continue to fail and remain band aid, even though the intentions are good.
The Ntataise Trust is an early childhood development network (ECD) based in 7 provinces in SA. It trains unemployed men and women to be ECD trainers, specializing in building the numeracy and literacy skills of black children. This organization should be the national "franchise" for ECD, given the education departments failure to nurture kids successfully in Maths and Science. But they can only achieve such a status with the financial support of government and big business over a period of time.
CSI must cease to be faddish, venal or respond to what is in vogue at the time. Creating social value is often a long-term investment, but it will only be an investment, when corporations budget for success over the long-term with clear goals in sight, including government as a major partner. Too often businesses let government off the hook and try to step in where they fail.
It takes two to tango, not only in terms of business and financial growth but also in terms of the human development indices which lag far behind our first world financial, banking, and auditing indices. In this regard, shareholders have an important role to play in deciding where CSI would have the most impact. They should stop depending on their CSI officers (the turnover of which is astounding) to tell them where CSI should go but should lead the charge on national development priorities. If board members are merely bums on seats, or politically connected, or economic vampires, it will exacerbate the problem.
It is time to jettison the double standards that rule Non-Profits vis a vis For-Profit organisations. If investments in overheads are a sine qua non for big business, why not apply the same expectations to the work of Non-Profits. CSI officers often refuse to fund the overheads, marketing and branding costs of community projects, retarding their abilities to become sustainable and develop scale. This bipolar view, premised on donors versus beneficiaries, is dated.
There is a serious need to innovate new business models that incorporate For-Profit elements into a Hybrid Business Model that enables Non-Profits to generate revenue streams. Such a split financial model is not solely dependent on donor funding. The impact and measurement of Non-Profits will not merely depend on new measurement frameworks. It requires big business to fundamentally change the way they think about the importance of creating social value over the long-term and democratic sustainability.
This article first appeared in Die Burger.
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