CSI Trends: Towards CSI 3.0

CSI is evolving towards greater impact

Corporate social investment (CSI) has a rich history in South Africa and continues to play a vital role in our country’s development and in addressing historic injustices. The practice has evolved from straightforward charitable giving to new approaches directed at more systemic and holistic impact.  

Evolving CSI practices can be categorised as follows: 

• CSI 1.0, or charitable CSI, adopts a welfare approach to giving. 
• CSI 2.0, or strategic CSI, is currently the dominant approach and offers high value for both business and development. 
• CSI 3.0, or leveraged CSI, is a holistic approach that foregrounds collaboration, cross-sector engagement, wide knowledge sharing and advocacy. 

While each of these approaches adds value to company strategies, elements of CSI 3.0 may be required to deliver more holistic and systemic impact.  

Presenting at Trialogue’s February 2024 webinar, panellists Nick Rockey (Trialogue Managing Director), Priya Naik (Samhita Social Ventures CEO and founder) and Nomaxabiso Matjila (Liberty Group CSI lead specialist) discussed some of the trends driving the changes emerging in CSI. 

The need for impact drives leveraged CSI

Rockey proposed that more leveraged CSI will increase the impact of CSI expenditure in South Africa, currently estimated at R11.8 billion annually.

He noted that, while CSI 3.0 is not suitable in every instance, companies are increasingly testing the space and looking for ways to achieve more with their funding. This desire for impact is motivating the progression from CSI 1.0 to 2.0 and 3.0. It is inspiring a more strategic approach that leverages resources and encourages collaboration effort. 

He noted that the shift will require more effort to amplify the direct contributions of companies, including by supporting advocacy, research and lobbying. While it is difficult for government to amend policy and change directions, companies are much more agile and innovative, explained Rockey.

He highlighted the extended impact that companies can have through knowledge sharing and advocacy built on a basis of established credibility.  

Indian CSR makes the case for CSI 3.0

Corporate social responsibility (CSR) in India has seen a 73% increase since 2016. Although CSR is mandated, Indian companies are exceeding compliance. More than half of the 20 000 companies required to allocate funds to CSR spend more than the required 2% of net profit contribution. The Indian government has also encouraged companies to invest more in impact assessment, resulting in more data-driven, evidence-based decision making.  

India has seen an almost three-fold increase in philanthropic collaboratives post pandemic. Forty-three collaboratives have leveraged about $250 million from funders to address complex and cross-sectoral issues such as health, education and women’s empowerment.  

Naik described Samhita’s own Revive collaboration as an example of the power of collaborative CSR. Over the past three years, the collaborative has been assisting the recovery of 715,000 workers and entrepreneurs who were impacted by the pandemic. She explained how 35 companies, each driven by their core competencies and focus areas, collaborated to deliver widespread digital empowerment, financial inclusion and livelihood enhancement support. 

India’s digital public infrastructure effort, which is being driven by the government and supported by the private sector, demonstrates how collaborations can unlock widespread social impact.

The digital infrastructure enables philanthropic organisations and NPOs to deliver what would previously have been small, local projects at scale. The established data and technology layer connects millions of citizens to multiple sectors at virtually no cost. It gives them access to philanthropic and/or business support to deliver significant gains in the form of digital inclusion and economic empowerment. 

Lessons from Liberty Community Trust’s collaboration

The Liberty Community Trust (LCT), the CSI division of financial services group Liberty, can attest first-hand to the benefits of collaboration. Focusing on foundation-based literacy, the Yizane Sifunde project combined the expertise of strategic partners Book Dash, Nal’ibali and Wordworks to deliver the trust’s objectives.  

LCT challenged the three non-profit organisations (NPOs) to combine their independent proposals into a single project driven by their common goal of solving South Africa’s literacy crisis. Led by a steering committee that drove strategic direction, the three-year project set out to encourage a love of reading in communities in the Eastern Cape.  

Matjila explained that the collaboration required the dedicated commitment of each organisation, led by a steering committee that met regularly to keep the project on track. Regular site visits ensured that the project delivered its outcomes, secured the continued support of trustees and ensured the best use of limited resources. She emphasised the importance of communication to maintain transparency and trust and to demonstrate the value of the investment. 

Navigating the challenges of collaboration

Rockey explored some of the factors discouraging collaborative efforts in the CSI 3.0 space, noting that collaboration does not come naturally. Companies tend to want to protect their brands and NPOs may want to preserve their space and intellectual property. The timelines for delivering impact through a collective initiative may be longer and some brand attribution may be lost.  

For successful collaborations, he suggested that companies need to ensure CSI’s strategic business integration and senior level buy-in. They further need to actively embed learning into their strategy and practice, perhaps through a dedicated role.  

Matjila acknowledged the difficulties of navigating competing interests but noted the necessity of collaboration to deliver social good.

She highlighted the importance of a more mature approach to CSI collaboration, where the value of collaborating with competitors is clearly articulated on the basis of impact and where the respective parties are empowered to play to their particular strengths.  

Naik pointed out that it is easier for companies from different sectors to collaborate on projects than companies in the same industry. Where companies from the same sector collaborate, the benefit needs to serve the sector, solving problems in a way that improve the ecosystem as a whole. 

She suggested two key aspects to ensuring successful collaboration. Firstly, the importance of establishing distinct inputs, outputs and outcomes for different partners to ensure that each party is able to clearly measure their respective contribution. Secondly, that collaboration needs to benefit all parties, whether in terms of capacity, support, more funding, efficiency or visibility.  

In the case of NPOs competing for limited funds, she recommends looking beyond the immediate programme and working with NPOs to support their long-term sustainability. Collaborations need to serve the financial interests of every organisation involved. And NPOs should become the conduit that helps companies achieve their social and environmental impact goals by aligning objectives. This will encourage companies to champion NPO programmes as their own. 

Moving towards CSI 3.0

The panelists concluded with their recommendations for companies to consider when taking their CSI strategies forward.  

• Use the catalytic resources and networks unique to the private sector to address the social issues only the private sector can.  
• Establish clear aspirations and a strategy to support them that aligns with the business.  
• Ensure the buy-in of your executive team.  
• Ensure sufficient capacity and organisational structures to achieve the intended impact.  
• Maintain strategic focus to deliver programme objectives and avoid being distracted by the many complexities and dependencies that emerge through the process. 
• Showcase your successes but be willing to have difficult conversations about aspects of programmes that don’t work. 
• Consider how to leverage a small amount of investment to gather the support of the largest number of actors around a particular cause.  
• Consider who you are trying to influence and the long-term catalytic impact that will be delivered.  
• Seek ways to shift philanthropic funding towards creating sustainable markets for those in need. 

Watch the recording here: