Corporate social investment (CSI) has evolved significantly over the past 25 years. As we celebrate 25 years of The Trialogue Business in Society Handbook (previously The CSI Handbook), it is worth examining CSI’s transition through three distinct phases which we term CSI 1.0, CSI 2.0 and CSI 3.0.
From the early days of CSI, in which companies took the first steps to contribute to socioeconomic upliftment in South Africa, business has played an integral role in development. The increasing professionalisation of CSI has seen a transition from reactive grantmaking, where businesses made charitable donations to non profit organisations (NPOs), to the complexity of bringing about systemic change.
This article charts the evolution of CSI from pre-democracy South Africa, through political transition and economic transformation, to the ‘lost decade’ under former president Jacob Zuma, which presented developmental challenges, as economic growth achieved between 1994 and 2008 was reversed. Despite these challenges – or perhaps because of them – CSI continues to strive for transformational change in the country.
CSI plays no small role in helping to bring South Africa closer to the United Nations (UN) Sustainable Development Goals (SGDs) Agenda 2030, the African Union Agenda 2063, and the Southern African
Development Community’s Regional Indicative Strategic Development Plan, with which the National Development Plan (NDP) is aligned. Goals include the elimination of poverty, a reduction in inequality, and growing an inclusive economy.
CSI 1.0
- Grantmaking/once-off charitable donations approach
- A ‘welfare’ approach and the support of ‘worthy’ causes
- Mostly cash donations
- The CSI function housed
separately from business
operations - Reporting: images of projects and beneficiaries
CSI 2.0
- A shift from a welfarist to a developmental paradigm, in the context of the global sustainable development agenda
- Longer-term flagship projects
- Companies supporting programmes for three to five years
- Companies looking holistically at what impact is created by
interventions - Stronger alignment of initiatives with business goals and shared value
- Reporting: emphasis on outcomes, tracking and measuring
CSI 3.0
- More complex, taking the entire ecosystem into consideration
- Using financial models such as innovative finance and outcomesbased finance
- Funding advocacy as part of programmes
- Emphasis on knowledge-sharing and collaboration
- Increased use and application of data
From CSI 1.0 to CSI 3.0
CSI 1.0
South African companies played
a complex, yet important, role
in South Africa’s transition to
democracy. The establishment of the Urban Foundation in 1976 laid the groundwork for focused corporate giving during its 18 years, with more than 350 companies helping to raise funds for education and housing.
At the same time, companies that were deeply entrenched within the apartheid system had to rethink their stance, especially considering the global rise of corporate social responsibility (CSR), and the values of social, economic and political justice embedded in the Sullivan Principles, which guided the conduct of US companies operating worldwide.
These principles provided a framework for corporate giving and allowed South African companies to bring some formality to their corporate giving in the form of nascent CSI programmes. Companies like Anglo American, De Beers, Gencor, Gold Fields and Liberty formed charitable trusts and foundations to manage their donations.
The early years of CSI in South Africa saw the private sector increasing philanthropic giving, but it lacked the strategic intent that would become a feature of CSI 2.0. Giving was largely reactive and only incidentally part of a largely transformative effort. In his master’s thesis ‘Corporate social responsibility: evaluating three South African companies’ initiatives’, Neil Fourie called the early years of CSI “a feel-good charitable side-show”, in counterpoint to an industry that is now a strategic and integral part of transformation in the country.
CSI 2.0
The publication of the second
King Report on Corporate Governance for South Africa (King II) in 2002 brought into focus the fact that social responsibility and corporate citizenship could inform how companies thought about their business. This marked a shift in CSI, with companies choosing to fund projects that aligned with their values and strategies. In 2004, the BroadBased Black Economic Empowerment (BBBEE) Act was signed into law, with wide-ranging implications for companies, as CSI was included in the codes and charters. This meant set targets and expenditure requirements, turning CSI into a performance-driven pursuit for businesses wishing to improve their BBBEE scores.
CSI 2.0 was characterised by
greater investment in communities
as stakeholders, rather than just
beneficiaries. This was the era
of three- to five-year flagship
projects, with companies investing
in one or two sectors rather than
disbursing funds wherever need was identified. This sustained support, together with greater consultation with implementing partners and communities, proved fruitful – it facilitated long-term relationships and strong branding opportunities. Social investment became a focal area, and the ‘professionalisation’ of CSI began with the appointment of specialists and the introduction of
dedicated, formula-based CSI budgets.
With the establishment of a CSI industry, greater emphasis was placed on meeting regulatory requirements and achieving developmental impact in partnership with other stakeholders, most notably government and civil society. Grantmaking became far more strategic, moving away from
‘doing good’ to bringing about long-lasting change.
CSI 3.0
Research conducted by Trialogue
in 2021 shows that companies use
three primary sources to inform
their CSI strategies and practices:
company strategy (90% of survey
respondents), government policy
documents and development plans (77%), and global codes and standards like the UN Global Compact (UNGC), the UN SDGs, the Global Reporting Initiative (GRI), and others (72%). With a multitude of metrics against which to benchmark their CSI initiatives,
companies are acknowledging the
complexity of the development
landscape, along with the need to
partner with other stakeholders to
bring about meaningful change.
Companies and other stakeholders
are taking a more holistic approach to development, considering the entire ecosystem in which they operate. Increased collaboration and cross-sector engagement are taking place, driven by innovative and outcomes-based finance. In addition, companies are more willing to support legitimate and lawful advocacy work, particularly in a post-pandemic world of accelerating inequality and injustice.
A good example of CSI 3.0 is the Teacher Internship Collaboration South Africa (TICZA) initiative, the convening group of which consists of JET Education Services, the Bertha Centre at the University of Cape Town, BRIDGE Innovation in Learning, and Trialogue. The Global Teachers Institute (GTI) has played a key role in conceptualising the initiative. TICZA is supported by funding from Absa, the Maitri Trust, the Standard Bank Tutuwa
Community Foundation and the
Zenex Foundation. For more on TICZA, see page 214.
Read ‘Establishing a Foundation‘ to understand more.
Timeline
The Department of Social Welfare was established by government to coordinate civil society’s philanthropic work with government’s welfare activities.
Social auditing was introduced so companies could regularly and systematically publish accounts of their social impact as well as their financial performance.
The notion of corporate-community giving was introduced, to get business leaders involved in the communities surrounding their operations.
The Urban Foundation, the first large-scale corporate commitment to disadvantaged people, focused primarily on housing and education, and played a role in laying the groundwork for focused corporate giving.
The term ‘corporate social responsibility’ was introduced in the Sullivan Principles, a voluntary code of conduct for US companies operating worldwide.
The Bank of South Africa (DBSA) was established to provide finance for large development projects.
The Joint Education Trust (JET) was established by South Africa’s leading companies and various civil society groups.
This national programme was set up to support existing educational initiatives. Between 1991 and 1995, 14 companies contributed R560 million to JET. Today, its successor, JET Education Services, works with government, the private sector, international development agencies and
education institutions to improve the quality of education and the relationship between education, skills development and the world of work. It is a founder member of the TICZA (read ‘A collective impact approach
contribution to strengthening education’ on page 214).
BMI primary research: 56% of a sample of 100 corporate grantmakers used the term ‘corporate social investment’ to describe their community development activities. The BMI research was a precursor to the Trialogue Handbook.
South Africa held its first-ever non-racial democratic elections. The new government instituted its Reconstruction and Development Programme (RDP) to address and dismantle apartheid’s social inequalities.
The first King report on corporate governance (King I) was published.
The National Business Initiative (NBI) was established with a mandate of 150 member companies. The NBI was set up as an NPO to use business leadership and resources to address socioeconomic challenges. Today, NBI is a voluntary coalition of South African and multinational companies that are actively working towards sustainable growth and development in South Africa. Since 1995, NBI has made a measurable impact in several developmental areas, including schooling, further education and training, energy efficiency and climate change, crime prevention, housing delivery, local economic development, public sector capacity building, and public-private partnerships.
The South African Grantmakers’ Association (SAGA) was launched, supported by about 60 companies and other funders, including the Kagiso Trust, Interfund, the Ford Foundation and the Charles Mott Foundation. Its aim was to support positive social and economic change in previously disadvantaged communities. SAGA closed down in 2006, due to a lack of funding. Following a pledge made by Nelson Mandela in 1994 to donate R150 000 of his annual salary to a children’s trust, the Nelson Mandela Children’s Fund (NMCF) was launched to raise funds and disburse them to projects aimed at uplifting previously disadvantaged children. The advocacy and social development agency celebrated its 27th anniversary in 2022.
The RDP was replaced by the Growth, Employment and Redistribution (GEAR) macroeconomic policy.
The Non-profit Organisations Act superseded the outdated Fundraising Act of 1978. A draft NPO bill was released in 2017 following a review of the 1997 NPO Act, with a view to regulating the sector better.
The first Corporate Social Investment and Development Handbook was published by BMI to provide widely accessible information about CSI. It estimated annual CSI expenditure at R1.5 billion. The largest individual budget was R20 million and 54% of CSI spending went to education.
The White Paper for Social Welfare forged a vision for developmental welfare in South Africa, in line with global notions of development. The Non-Profit Partnership (NPP) was launched as a joint initiative by the South African Non-Governmental Organisation Coalition (SANGOCO), SAGA and the Charities Aid Foundation (CAF) to strengthen the financial sustainability of the NPO sector.
The National Development Agency (NDA) was established through the National Development Act of 1998 to administer large development funds and be the premier partner to civil society, the donor community and the government in eradicating poverty. See pages 226–227 for more on the NDA.
Tshikululu Social Investments (TSI), a non-profit management consultancy, was established as a specialist donor support agency to manage the CSI activities of corporate grantmakers.
The Business Trust was established in 1999 as a five-year initiative to focus on human development, job creation through tourism and crime reduction. It was supported by 145 companies that provided over R1.2 billion in funding. Its mandate was extended and in the 12-year period until its closure in 2011, it mobilised and managed R1.8 billion. By working together, business and government were able to improve the lives of four million people.
Trialogue was registered as a company and the Handbook became the Trialogue CSI Handbook.
The Taxation Laws Amendment Act introduced the concept of the ‘public benefit organisation’ (PBO) and provided tax-exempt status for many organisations.
The Department of Social Welfare was renamed the Department of Social Development (DSD).
The National Lottery was launched in March 2000. See our article ‘The National Lotteries Commission: where to for NPOs?’ on page 254.
The Millennium Development Goals (MDGs), which were derived from the UN Millennium Declaration, committed world leaders to fighting poverty, hunger, disease, illiteracy, environmental degradation and discrimination against women over a 15-year period.
The New Partnership for Africa’s Development (NEPAD) was adopted at the 37th Summit of the Organisation of African Unity (OAU) as a vision and strategic framework for Africa’s renewal and development.
The World Summit on Sustainable Development (WSSD) was held in Johannesburg.
The King II Report on Corporate Governance in South Africa was launched, superseding the 1994 King Report. The report recommended that social and environmental reporting (as part of the ‘triple bottom line’) be considered as important as regular financial reporting.
The Johannesburg Stock Exchange (JSE) launched its Socially Responsible Investment (SRI) Index to track listed companies’ responsiveness to South Africa’s socioeconomic and environmental challenges.
The Broad-Based Black Economic Empowerment Act was signed into law, placing BEE firmly on the corporate agenda.
The Community and Individual Development Trust (CIDT) becomes a part-owner of Trialogue. The trust is now named the Imvula Education Empowerment Fund, and it aims to provide talented, but historically disadvantaged youth, access to education and employment opportunities – see Maharishi Invincibility Institute on page 79.
The Black Economic Empowerment (BEE) Codes of Good Practice were gazetted and a number of Transformation Sector Charters were introduced.
The Trialogue CSI Conference was launched, convening development practitioners from companies and NPOs to share lessons and ideas on how to improve the impact of CSI.
The King III Report on Corporate Governance in South Africa (King III) was released.
The University of Cape Town Graduate School of Business (GSB) launched the first specialised postgraduate programme in CSI.
Nelson Mandela’s 91st birthday on 18 July marked the first Mandela Day calling on South Africans to give 67 minutes of their time to social causes, representing his 67 years of public service. From 2010, the day became an international volunteering day under the auspices of the UN.
The new Companies Act, 2008 (Act No. 71 of 2008) came into effect from 1 May, introducing the non-profit company, “a company incorporated for public benefit”, which replaced the Section 21 company.
The National Development Plan (NDP), a strategic framework for addressing the socioeconomic and developmental challenges facing South Africa, was approved by government.
Mark Kramer and Michael Porter founded
the Shared Value Initiative to enhance
knowledge-sharing and practice surrounding
shared value globally (for more on shared
value, see ‘Capitalism: do we need a new
paradigm?’ on page 146).
The GRI’s G4 Sustainability Reporting Guidelines were released, revising the reporting process to focus managers on linking material sustainability issues to the value chain.
The National Education Collaboration Trust (NECT) was formed to address key challenges in education. NECT is a partnership initiative driven by business and it includes government, labour and other civil society stakeholders.
Businessman Patrice Motsepe became the first African billionaire to sign the Giving Pledge, dedicating at least half of the funds generated by his family assets to philanthropy.
The Trialogue Strategic CSI Award was launched, recognising projects that epitomise best practice in CSI in South Africa.
Trialogue launched its CSI Forums, quarterly events that engaged on a range of CSI and responsible business topics.
The JSE/FTSE Responsible Investment Index Series replaced the JSE SRI Index as the JSE partnered with global index provider FTSE Russell to make progress around promoting corporate sustainability practices in South Africa.
Launch of the Sustainable Development Goals (SDGs) by the UN General Assembly, with the aim to achieve the Global Goals by 2030.
The African Union’s Agenda 2063 was adopted. This set of initiatives outlines a plan to achieve economic development, political integration, improvements in democracy and justice, and the establishment of security and peace on the African continent over a roughly 50-year period
South Africa signed the Paris Agreement on climate change in New York. The Agreement is a legally binding international treaty that was adopted by 196 Parties at COP21 in Paris, on 12 December 2015.
The Trialogue Knowledge Hub was launched as a freely accessible online body of knowledge for CSI practitioners.
The 20th edition of the Handbook is published as The Trialogue Business in Society Handbook, in recognition of the increasingly holistic role of business within society; encapsulating, but not bound by the concept of CSI
The Nonprofit Organisations Amendment Bill was released for public comment – see ‘The NPO Amendment Bill – more questions than answers?’ on page 257).
The Carbon Tax Act, 2019 (Act No. 15 of 2019) came into effect on 1 June.
Virtual Trialogue Webinars replaced the in-person CSI Forum breakfast sessions during the Covid-19 pandemic. The monthly online webinars reached a wider audience, with panellists from other parts of the world included.
In 2021, South African companies spent 7% less on CSI due to a decrease in corporate profit during the pandemic. However, companies extended increased humanitarian aid at this time, focusing on disaster relief, health measures and food security. Education remained the sector that received the most support.
The South African Treasury launched South Africa’s first national Green Finance Taxonomy.
The JSE released its Sustainability and Climate Disclosure Guidance that aims to guide listed companies on best practice in environmental, social and governance disclosure.
The Trialogue Academy was launched as an online platform for learning more about responsible business, sustainability and CSI.
Sources:
- The Trialogue Business in Society Handbooks, 1998–2022.
- The Trialogue Business in Society Conference 2022.
- Idowu, S. and Filho, W., eds. (2009). Global Practices of Corporate Social Responsibility.
Source: The Trialogue Business in Society Handbook 2022 (25th edition)
