Only 12 out of 72 companies on the JSE SRI were rated ‘good’ on their corporate social investment (CSI) reporting, according to new analyses by established CSI and sustainability consultancy Trialogue. No companies were rated ‘excellent’.
The CSI Reporting Barometer is featured in the 17th edition of The Trialogue CSI Handbook, released on 2 December 2014. The Barometer is complemented by Trialogue’s primary research, which comprises face-to-face interviews with 99 CSI managers in companies and online surveys with 171 NPOs.
According to Trialogue research, company expenditure on social development in South Africa was estimated at R8.2 billion in 2014. This represents a growth of 4% in nominal terms – a decline of 2% in real terms.
Measurement and reporting can improve
Most companies (around 90%) measure – or ask partner organisations to measure – the resources that go into delivering their most important projects and the outcomes that they deliver. Surprisingly, 64% of companies claim to be measuring the impact of the projects they fund – impact here refers to the long-term changes in the broader community of the funded projects; a complex and expensive measurement exercise. It is worth noting that the research shows that only 2% of CSI budgets are directed to monitoring and evaluation (M&E).
With all of this measurement supposedly taking place, companies are surprisingly weak on reporting on the impact of their corporate social investment. Trialogue repeated research last done in 2009 with its 2014 CSI Reporting Barometer, which analysed the reports of the 72 companies that make up the JSE SRI index, across 13 criteria. Companies scored an average of 1.7 out of 5 on the ‘formal project impact assessment’ criterion, with only 39% of companies mentioning it at all.
Giving widely or wisely?
Corporate grantmakers have many demands on them, and tend to spread their resources thinly. In 2014, nearly three-quarters (73%) of respondents supported more than ten organisations, and 12% gave to more than 100 organisations. On average, companies support organisations in four or five sectors, which range widely from health to education to entrepreneur support to arts and culture, for example.
While the average number of dedicated CSI employees in a department was seven, over a quarter (26%) of companies have two staff or less. Such a wide spread of grantees, coupled with constrained resources in CSI departments, may help explain why the quality of information shared is generally so poor.
On the other side of the equation, NPOs rely on a range of donors to do their development work, placing an administrative burden on them too. NPOs report spending an average of 40 hours a month compiling reports for their donors, and a further 88 hours each month pitching to donors.
Corporate social investment is a complex space, but South African companies remain an important element of the development funding mix. Companies need to be realistic about what can be achieved with their funds – a drop in the ocean compared to government spending on social development – and cautious of overstating their results.
Published on the Trialogue Website: March 17th, 2015