South Africa has a long history of corporate social investment (CSI), and we have charted its evolution in previous issues of The Trialogue Business in Society Handbook. In the 2023 issue, we consider what the coming years of CSI might look like and which trends may inform CSI practices in the future.
The evolution of CSI
CSI has evolved over the decades, from the early days of charitable giving to a new approach that considers how to achieve systemic impact through leveraged CSI.
The diagram below charts the trajectory from an essentially welfarist approach to today’s strategic approach, and further to a more holistic approach, which foregrounds collaboration, cross-sector engagement, wide knowledge-sharing and advocacy.
1.0 Charitable CSI
| A cost |
| Separate function |
| Strong external influence |
| Limited alignment to business |
| Reactive project selection |
| Many projects |
| No collaboration |
| No monitoring and evaluation (M&E) |
| Mostly cash |
| Limited communication |
| No Knowledge-sharing |
| Voluntary |
2. 0 Strategic CSI
| An investment |
| Integrated into the business |
| Strong corporate influence |
| Clear points of alignment |
| Proactive project selection |
| Fewer, more strategic projects |
| Some collaboration beyond implementing partner |
| Enhanced M&E focused on outputs and outcomes |
| Cash, in-kind and time (volunteerism) |
| Marketing, increased transparency |
| Limited knowledge-sharing |
| Legislation recognition |
3.0 Leveraged CSI
| An investment |
| Core to the business |
| Strong corporate interdependence |
| Leveraged alignment |
| Company-initiated and driven programmes |
| Fewer, broader programmes |
| Collective impact initiatives |
| Applied research focused on impact |
| Cash, in-kind and time all core components and qualified; new financing mechanisms |
| Built into brand proposition |
| Wide knowledge-sharing and advocacy |
| Disclosure requirements |
Charitable CSI, strategic CSI and leveraged CSI are not ‘milestones’ to be achieved, but interdependent approaches that each have a role to play in development. Companies should not view CSI 3.0 as a ‘new model’ that renders previous models ineffective. Rather, they should be deliberate about how each approach is included in their strategy.
As part of its CSI strategy, a company could choose to allocate a percentage of spend to charitable CSI to cater for requests and events, a larger portion to well-aligned strategic CSI and another portion to leveraged CSI to focus on longer-term systemic change.
There will always be a need for charitable donations, divisional and employee contributions and disaster relief, for example, and companies should not shy away from ad hoc giving, which has its place (as we see each year on Mandela Day). However, they need to think carefully about when and how they give, how they leverage their budgets, and which approach suits which circumstance.
“Corporate social investment (CSI) has evolved over the decades, from the early days of charitable giving to a new approach that considers how to achieve systemic impact through leveraged CSI.”
A further important point is that the relevance of CSI 2.0 is not decreasing. Strategic CSI is the predominant approach today and will continue to be a useful framework that allows companies to think more deeply about their programmes and the impact they deliver. However, to deliver more systemic impact, it may become necessary to incorporate some elements of CSI 3.0 in your approach.
The more consultative approach that characterises CSI 2.0 finds further expression in CSI 3.0, with its focus on collective initiatives and strong corporate interdependence. This is a key trend that will influence the direction of CSI.
These three approaches offer additional tools in an expanding toolkit, and knowing which approach to use in which instance will become vital.
The future of CSI: leveraged CSI
The CSI approach of the future leverages both internal assets, skills and competencies and external expertise, data and collaborations.
The paradigm shift towards leveraged CSI involves recognising CSI as an integral part of the business. CSI is no longer ‘on the fringes’, eliminating the need to view programmes as ‘add-ons’ that align with business goals and strategic objectives. The points of alignment that form part of a strategic approach are in this instance leveraged, drawing on the entire business capability to expand reach and impact.
The fewer, broader programmes in which companies choose to invest will reflect the priorities of their core business, thereby enhancing their strategic relevance and longevity.
Externally, CSI programmes will be integrated into broader collaborative initiatives, tapping into the skills and experience of stakeholders who specialise in particular sectors or systems. Comprehensive efforts will be made to understand lead practice and stakeholder dynamics within the chosen developmental field, ensuring that a company contributes to advancing existing practice rather than operating in isolation.
Collaborative relationships will be formed with a conscious understanding of varying stakeholder interests, all united by a common goal.
This approach is inherently more complex and requires longer time frames due to the need to manage relationships and coordinate activities. It necessitates investment in supportive processes beyond programmatic funding. Learnings will be widely shared and used to refine programmes while influencing policy and practice on a broader scale.
Trends driving the evolution of CSI
The following three ‘megatrends’ are driving the shift towards CSI 3.0 and are likely to influence the CSI landscape in the coming years.
Increasing integration within the company
This trend sees companies becoming increasingly strategic about how they view CSI. As it becomes more integrated with other divisions and functions, there is a strong possibility that the term ‘CSI’ may simply be used less often as the idea of social impact driven across the business takes hold.
As CSI programmes progressively become integrated into business operations, companies will use CSI in their corporate brand messaging and their stakeholders, for example, employees, suppliers, clients and investors may be encouraged to explore how they can use their capabilities and resources to drive greater developmental impact.
As companies become synonymous with the social impact they create, they will be able to attract talent and drive employee engagement, providing increasing opportunities for volunteerism. A company with a clearly defined purpose can offer meaningful work to employees, and these employees may not view ‘giving back’ as something they do but as a function of who they are in the workplace.
| INCREASING INTEGRATION WITHIN THE COMPANY |
| 1. Increasingly strategic CSI |
| 2. Aligned to business and draws on company’s skills, resources and competencies |
| 3. Involves company stakeholders- customers, suppliers, value chain partners |
| 4. Increased employee engagement and volunteering opportunities |
| 5. Embedded into brand messaging |
| 6. CSI terms falls away – social impact across the business |
Towards systemic impact in society
We have already seen that companies are taking a position on social and political issues as they focus on achieving systemic impact in society and advocating for social justice, which involves realising people’s rights, defending community interests and potentially influencing policy outcomes to improve people’s lives.
This pivot means companies will increasingly be taken seriously as the voice of particular social issues, with additional resources channelled into applied research, networking and thought leadership within their chosen developmental field.
Collective impact models will become more prevalent, with coordinating bodies determining the trajectory of programmes. This impact will look beyond flagship programmes, however strategic they may be, to effect societal change more collaboratively. To this end, companies will share knowledge and pool resources to achieve common goals.
Aiming for systemic change and social justice
Next-level collaboration – collective impact models with coorinating bodies
Support for advocacy and research
Applied research to influence changes in broader sector
Intentional knowledge – sharing
TOWARDS SYSTEMIC IMPACT IN SOCIETY
Enhanced ways of working
New ways to leverage finance will be explored, with alternative and blended financing models gaining in popularity. Social enterprise, impact bonds, loan financing and crowdfunding will be explored alongside traditional grant funding, while social funding outside of traditional CSI or trust structures will come to the fore. We are likely to see more social spending by business units and a general increase in impact investments.
Outcomes-based funding is another trend to watch, with funders investing on the condition that certain social or environmental outcomes are achieved. To this end, companies will use technology and data to accelerate their learning and monitoring, with artificial intelligence driving applied measurement.
Alongside this, giving practices are shifting, with trust-based localised giving becoming more common. Ultimately, this requires a rebalancing of power between companies, non-profits and communities, with more voice and decision-making given to those on the ground.
Although the #shiftthepower movement has gained more traction with private foundations and philanthropists, we expect that it will impact corporate giving in the future.
Increased use of innovative finance
Outcomes based funding
Social funding from sources other than traditional CSI
Improved giving practices
Increased uses of data and AI
Continuous learning through applied measurement
Source: The original version of this article was published in the Trialogue Business in Society Handbook 2023 (26th edition)
