Towards Best Practice Social Investment andCommunity Development          2011 Next Generation Consultants       Reana Ros...
Day One• Session One  – An introduction and    contextual overview• Session Two  – Best practice in Africa• Session Three ...
IntroductionContextual OverviewDefinitions in Practice
CSI in the context of definitions                              Corporate Social Investment                              (C...
New terminology• CSR – an overarching value-based framework   – (the corporates contribution to a society’s sustainable   ...
Strategic CSI                       Align strategic Measurable                            and    Return                   ...
Progress towards Best PracticeTraditional    In Kind            Social          Strategic          SystemicPhilanthropy   ...
Towards Sustainable CSI         Charity                              Create New       Create                         Busin...
Strategic CSI means…     best practice   • Formalised approach/documented strategy   • Regular reporting and communication...
New perspectives on CSI   Regulation is a key driver
CSI and BEE                                       Generic scorecard orTurnover greater than R35m             Approved Sect...
CSI and the BEE Scorecard (cont‟d)Direct     Equity Ownership           20%   Encourages the sharing of equity and votingE...
CSI and the BEE Scorecard• Residual Element – Code 700 Socio Economic Development – 5  points – target 1% of NPAT or 0.125...
CSI and the BEE Scorecard (cont‟d)• Enterprise Development – Code 600 – 15 points – 3% of NPAT or  0.375% of turnover• Key...
Impact of Charters & BEE Codes•   Increased communication of CSI•   More formalised approach to CSI•   New/Refined CSI Str...
Impact of JSE SRI Index• Increase in non-public information disclosure• Most companies now committing to sustainability an...
Impact of Sustainability Reporting• Accounting – accurately  valuing the CSI contribution• Accuracy – measuring input  and...
Sustainability Reporting on CSI•   Top 3 indicators for Education and Training     – 1. Number of people benefited/reached...
CSI in AfricaA local and continental overview         of the practice
Continental Context•   Vastly different models of development•   Politically very complex operating    environments•   Lon...
• Large foundationsNorth Africa     – Wealthy individuals – Oil                   Barons – Aga Khan                   Foun...
West & East & Central Africa           •   Hundreds of thousands NGO’s           •   High level of corruption             ...
Southern AfricaTrends (1) - Regional• South to South exchange (vs. North to  South)• Support regional integration (SADC) –...
Trends (2) –     Market Based Approaches - Innovation• Bottom of Pyramid – BOP -  Models• Micro credit movement• Venture p...
•                 Trends (3) – New Influences    Greater emphasis on    measurement of impact     – (Sustainability report...
Trends (4) - Legislation• Motivation has changed  – Compliance with Broad Based Black Economic    Empowerment – BBBEE Act ...
Trends (5) – Financial Crises• Good News   – Debate about aid /     development effectiveness   – Focus more on trade and ...
• Bad News   – More pressure on                                            Trends (5)     developmental assistance   – Don...
Trends (6) - Business• Movement by business into  unconventional funding areas  – Policy, advocacy, human rights,    gende...
Trends (7) – Focus Areas• Job Creation   – More for Enterprise Development, SME     Development, Skills development• Envir...
Issues• Impact of government funding –  social grants   – Greater dependency creation, less     sustainability, less devel...
Towards the Future• Innovation and  Creativity to solve  Africa’s problems• Responsiveness and  Responsibility of  everyon...
Follow the moneyTrialogue – CSI Handbook        13th Edition      R5.4 (b) = 2010      R5.1 (b) = 2009      R4.1 (b) = 200...
Hot off the press• Funding increased by 5.9% - (inflation 5.8% -  NO real growth)   – Improved CSI Accounting   – Broader ...
Impact of the recession        • 14% cut in CSI budgets – 2010        • 20% cut in 2009        • 23% cut in 2008          ...
Evolving CSI practice      • Legislation key driver         – Sector charter, licence to operate,           stakeholder pr...
What’s New• New Sectoral Classifications   – Education   – Social & Community     Development   – Health & HIV/Aids   – En...
Popularity   • Education = 32% of all               funding – but decrease of               nearly 10% in amounts         ...
••    Supported by 93% of all corporates    Accounts for 32.4% of all spent                                               ...
Health & HIV/Aids• Supported by 64% of all corporates• Accounts to 16.7% of all spent   –   Hospices   –   Primary Healthc...
Social and Community                                       Development• Supported by 78% of all corporates• Accounts to 12...
Food Security & Agriculture• Supported by 35% of  corporates• Received 6% of total CSI  budget   – Food Relief/Feeding    ...
Enterprise Development• Supported by 40% of all  corporates• Accounts to 5.6% of all spent  – Entrepreneurial skills    de...
Environment      • Supported by 49% of all        corporates      • Accounts to 6.8% of all        spent         – Wildlif...
Training, Capacity Building and      Skills Development                • Supported by 44% of                  all corporat...
Arts & Culture       • Supported by 35% of         all corporates       • Accounts to 4.6% of         all spent         – ...
Safety & Security         • Supported by 21% of all           corporates         • Accounts to 2.3% of all           spent...
Housing & Living Conditions              • Supported by 19% of all                corporates              • Accounts to 3....
Sports Development• Supported by 30% of  all corporates• Accounts to 2.2% of  all spent  –   Soccer  –   Rugby  –   Basket...
NPO Sector• Decline in funding:  – Global financial crises and ensuing economic    slowdown  – BEE Codes• Impact  – Strugg...
What‟s in/What‟s OutSector           What’s In                             What’s Out                      WhyEducation   ...
State of Giving South Africa
Giving is big business*• Listed Companies – R5.6 billion per annum• Unlisted Companies – R2 billion per annum• State Owned...
Reported Budgets 2010 - mAbsa                       R102    Barloworld                 R7.6    Harmony               R27.6...
Non SpendersMultinationals – Telecoms    Nokia, Samsung, Erickson, SiemensFMCG                         L’Oreal, Revlon, Un...
Budget Trends• Included in the budgets of corporates for CSI are:   – Spent on Events and awards – 45%   – Monitoring and ...
Other Contributors*•   Zennex Foundation - R30 m          •   Mott Foundation – R20 million•   Oprah – R150 m             ...
Interesting Finding• Total Aid in 2008 in m US  Dollars   – 700 hundred million USD• Ten biggest donors in 2008   – EU Com...
Foreign Development Aid•   SA receives around 1/3 of global aid, or around US$30 billion•   USAID – US$85 million•   Danid...
Sectoral Focus of Global DonorsDonor             SectorEuropean Union    Water, LED, EducationUSAID             Education,...
Private Foreign Foundations• More than 70 foreign based private foundations in SA• More than 60 foreign faith based organi...
Special Funds•   Initiatives by government to address poverty and development•   Budget – R55 billion per annum from Gover...
Public-Private-Partnerships•   National Business Initiative•   Business Against Crime•   Business Trust•   Joint Education...
Trends, Drivers andChallenges in Grantmaking
2 Perspectives• Emerging Trends – linked to economic  crises• Steadfast Trends – monitored over a  period of time – 5 year...
1st Perspective     Emerging Trends linked to economic crises• Adjustment of budgets    – No new MOU’s, only focused on co...
• Co-operation is no longer            a competitive factorImpacts      – Communities in distress               needs help...
New Patterns and influencers• Leveraging core assets   –   Distribution channels   –   Suppliers – value chain   –   Acces...
2nd Perspective       Trends driving innovationINNOVATION –Is innovation possible in asocio economic development context?I...
Top Trends• Most influential trends driving innovation   –   Trend 1 – Social Entrepreneurship   –   Trend 2 – Commerciali...
Trend 1 – Social Entrepreneurship•   The rise of social entrepreneurship   •   Practitioners not ready     – Mohammad Yunu...
Trend 2 – Commercialisation of CSI • The fortune at the Bottom of       • Driven by business benefits   the Pyramid       ...
Trend 3 – The influence of compliance• Tick box approach                 • Add to burden of• Legislation are driving      ...
Trend 4 – The rise of stakeholderengagement & activism• Product and market                • Ring fencing CSI – The  stewar...
Trend 5 – The pressure to measure• Reporting requires                         • Practitioners are not  measurement indicat...
Trend 6 – Bigger, better models ofdevelopment• Marketing is important            • War on ideas• Communication (PR) is    ...
Trend 7 – Green is the new black• Environmental impact is driven     • All companies are adding  by global agendas        ...
Trend 8 – Put away the gloves•   Tipping points                    •   Serious questions     – Absence of Market Standards...
Trend 9 – Follow the money• R40 billion + per annum must       •   New rules of engagement  yield results                 ...
Trend 10 - Hard facts, dangerous half truths and total nonsense•   Build to last, great to good              • All we meas...
Why do CSI Fail? (1)•   Limited understanding of the often complex local context:     –   Companies have sometimes commenc...
Why do CSI Fail? (2)•   Responding to local requests in an ad hoc manner:     –   Ad hoc approaches are typically opportun...
Why do CSI Fail? (3)•   No exit or handover strategy:     – Commencing activities without planning in advance for the comp...
Getting Started and  Making it work
Our Approach• Strategic Review   –   Business   –   Brand   –   Operations   –   Sustainability• Internal and External Sta...
Group Feedback and Interaction•   Defining the business case•   Developing the strategy and policy•   Developing focus are...
The Ages and Stages of CSI*Business Age            Stage of CSI Modus                    Key Enabler   Stakeholder        ...
Process of Strategic CSIAssess the   Assess the      Engage           Invest in     Set the         Select          Measur...
Guidelines for Best Practice•   Set out a 3-5 year plan for the company’s community investments•   Establish community rel...
Getting Smarter: Support         • DO YOU?           – Devote a portion of the annual             grantmaking budget to ge...
Getting smarter:         Application practices• Do you?  – Have a common (single/standard) application    form  – Have fin...
Getting Smarter:            Reporting Practices• Do you?  – Require final reports often or always  – Read Grant reports (b...
Getting Smarter: Feedback         • Do you?           – Solicit feedback of any kind             (anonymous or non anonymo...
Getting Smarter: Stakeholder            Engagement• Do you?• Meet with grantee leaders to learn more about mutual  issues ...
Steps to more strategic            grantmaking• Clarify your values (e.g. social justice)• Create a vision (e.g. health in...
CSI – Strategy guidelines• A strategy that   – Will support and contribute to positive social change   – That encourages i...
CSI policy guidelines• Support and promote projects with a specific relevance to  the organisation• Focus on communities c...
Strategic Considerations• Follow an inclusive process that allows all internal  stakeholders to contribute any resources a...
CSI Practitioners –     Roles and Responsibilities• Build and maintain relationships with key stakeholders• Develop the bu...
Categories of CSI PractitionersType                   Characteristics                     Strengths                       ...
Towards the Future
• Its more ambitious: Todays                         grantmakers are tackling giantThe Future of Giving     issues, from r...
The Future of Grantmaking• More scrutiny from legislators and  regulators• More skepticism from consumers and  the general...
Challenges for 2011•   Aligning the giving program more closely with the business needs.•   Desired impacts are not being ...
Tipping Points or Flux• Tough questions   – How is contributions spent   – How much is being spent   – Are we making a    ...
Carrots & Sticks     • Are practitioners between a       rock and hard place – do       they have influence?        – Are ...
Please note: This presentation is part of a larger body of research                     and knowledge.  This information i...
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Towards Best Practice - Community Investment and Development - 2011

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Presentation about Corporate Social Investment, Community Relations, Investment and Development in South Africa as well as Africa - presented and developed 2011.

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Towards Best Practice - Community Investment and Development - 2011

  1. 1. Towards Best Practice Social Investment andCommunity Development 2011 Next Generation Consultants Reana Rossouw
  2. 2. Day One• Session One – An introduction and contextual overview• Session Two – Best practice in Africa• Session Three – Trends, Drivers, Challenges• Session Four – Getting Started and Making it work
  3. 3. IntroductionContextual OverviewDefinitions in Practice
  4. 4. CSI in the context of definitions Corporate Social Investment (CSI) How we care for the well being of the communities in which we operate – (by investing resources into communities through CSI programme management) Corporate Governance Corporate Social How CSI is managed – Responsibility (CSR) now through accountable, CSI superseded by Corporate responsible, transparent, Definitions Sustainability ethical investment How CSI contribute to practices mitigating economical, environmental and social impacts and risks Corporate Citizenship How CSI contributes to managing internal and external stakeholder relationships both up and downstream
  5. 5. New terminology• CSR – an overarching value-based framework – (the corporates contribution to a society’s sustainable development goals)• CSI – a voluntary social giving activity – (strong developmental theme – improving the lives of under- privileged and previously disadvantaged communities)• SED – A discretionary transformation framework – (emphasises developmental initiatives that equip disenfranchised individuals with skills and/or resources to play an active role in the economy)• LED – A mandatory framework – (Social and Labour Plan to secure ongoing licence to operate – Mineral and Petroleum Resources Development Act – focus on job creation with measurable outcomes)• Corporate Sustainability – Managing risk, impact, influence and control
  6. 6. Strategic CSI Align strategic Measurable and Return OperationalOn Investment business and for Brand Company imperatives CSI Align and Measurable support Impact ongovernment Society andPriorities and Environment Community needs
  7. 7. Progress towards Best PracticeTraditional In Kind Social Strategic SystemicPhilanthropy Grantmaking Entrepreneur- Investments SocioDonations/ Products, ship Aligned with EconomicCheques services, skills Financial core business Development resources, interests, brand Collaborative operational values, Partnerships, advice & competencies, influencing expertise, and policy, access to government contributing markets goals advocacy and (trade) high impact change
  8. 8. Towards Sustainable CSI Charity Create New Create Business as Value competitive Usual FLAGSHIPS advantageSocialValueAdd Mitigate Risks Compliance Impacts Do no harm Do what is Control Costs required Sustainability Strategy Shareholder Value Add
  9. 9. Strategic CSI means… best practice • Formalised approach/documented strategy • Regular reporting and communication (internal & external) • Active Senior management/board involvement • Alignment to core business and operational business • Working in collaborative partnerships • Dedicated CSI staff/team/department/foundation/Trust • Regular stakeholder consultation and engagement • Employee involvement and recognition • Regular monitoring, evaluation and impact assessment • Replication of successful projects • Development of best practice guidelines • Sharing lessons and insights
  10. 10. New perspectives on CSI Regulation is a key driver
  11. 11. CSI and BEE Generic scorecard orTurnover greater than R35m Approved Sector Charter appliesTurnover between Simplified Scorecard applies Choice of 4 of 7 elementsR5m and R35m All elements weigh 25% Turnover less Exempt from BEE than R5m And are recognised As Level 4 contributors
  12. 12. CSI and the BEE Scorecard (cont‟d)Direct Equity Ownership 20% Encourages the sharing of equity and votingEmpower- rights with black people and black womenment Management 10% Encourages senior black decision making at executive board and senior top management levelsEmploy- Employment Equity 15% Encourages companies to identify and recruitment black people at professional, middle and lowerEquity management positions Skills Development 15% Encourages companies to develop black talent through spending on skills development and learnershipsIndirect Preferential Procurement 20% Measures the extent to which enterprisesEmpower- procure from BEE compliant companies.ment Encourages spend on SME’s and Black owned companies Enterprise Development 15% Encourages development or expansion of SME’s and black owned companies Socio Economic 5% Encourages initiatives intended to directly provide black people who are natural persons with means of generating income for themselves
  13. 13. CSI and the BEE Scorecard• Residual Element – Code 700 Socio Economic Development – 5 points – target 1% of NPAT or 0.125% of turnover• Key Principles – Aimed at natural black persons, communities where at least 75% are natural black persons or rural infrastructure development. • Rural development programs • Health, HIV/Aids programs • Education support • Environment support • Arts & Culture • Sport• Aims to encourage initiatives intended to directly provide black people who are natural persons with means of generating income for themselves• SED is defined as: “monetary or non-monetary contributions actually initiated or implemented in favour of beneficiaries …with the specific objective of facilitating sustainable access to the economy for those beneficiaries”
  14. 14. CSI and the BEE Scorecard (cont‟d)• Enterprise Development – Code 600 – 15 points – 3% of NPAT or 0.375% of turnover• Key Principles – Provision of seed capital – Professional/consulting services – Licencing/registration fees – Industry specific levies – IT services – Payments made to 3rd parties to perform enterprise development on their behalf – Preferential credit facilities/guarantees/better payment terms – Training/mentoring – Enterprise Development unit• Aims to encourage development or expansion of black, small medium enterprises• Specifically aimed at supplier development in most organisations
  15. 15. Impact of Charters & BEE Codes• Increased communication of CSI• More formalised approach to CSI• New/Refined CSI Strategy• Greater board/management involvement• Increased/decreased expenditure on CSI• Restructuring of CSI department• Change in focus area/project selection• Change in beneficiary/recipient communities
  16. 16. Impact of JSE SRI Index• Increase in non-public information disclosure• Most companies now committing to sustainability and corporate responsibility – understand the imperative• Sustainability Reports starting to be structured according to Index Criteria• Distinction between real performance and window dressing becoming clearer• Still lacking some understanding about specific issues such as the difference between direct and indirect impacts• CSI measurement now becoming critical• Clear guidelines for focus areas and impact• External reporting (and therefore results) now drive CSI communications
  17. 17. Impact of Sustainability Reporting• Accounting – accurately valuing the CSI contribution• Accuracy – measuring input and outputs• Data collection – measuring impact of investment• Indicators – development of indicators for measurement - impact on society, environment or economic impact• Strong uptake of GRI, and real increase in assurance/ verification• Different reporting styles – Section of annual report – Section of sustainability report and integrated report – Separate social/environmental/ESG report – Separate CSI report
  18. 18. Sustainability Reporting on CSI• Top 3 indicators for Education and Training – 1. Number of people benefited/reached by the education initiatives – 2. Amount of money invested/donated in the education initiatives – 3. Number of education-related activities (e.g. seminar, classes, conferences etc.) held• Top 3 indicators for Philanthropy and Charitable Giving – 1. Sum of money donated/raised/contributed to community initiatives – 2. Percentage or number of people (organizations) granted/sponsored/supported/covered by the donated services – 3. Number or quantity of scholarships/material/services donated (no value of money indicated)• Top 3 indicators for Community Services and Employee Volunteering – 1. Number of people/organizations/projects benefited, served or implemented – 2. Number of volunteers – 3. Number of volunteering hours• Top 5 indicators for Total Community Expenditure – 1. Amount of money spent in community investment – 2. Percentage of profit/revenue/income spent in community investment – 3. Percentage increase of money spent on social investment, compared to last year – 4. Number of people benefited in community investment activities – 5. Number of projects developed and completed• Top 3 indicators for Community Engagement and Dialogue – 1. Number of visitors, audience and participants reached – 2. Percentage/number of sites where community engagement activities were performed – 3. Frequency of meetings
  19. 19. CSI in AfricaA local and continental overview of the practice
  20. 20. Continental Context• Vastly different models of development• Politically very complex operating environments• Long history of development aid – Good News – exposed to international developmental models specifically large developmental agencies – Oxfam, USAID, missionary-faith based organisations and government support agencies – UNDP, Danida etc. – Bad News – capacity and skills not necessary transferred nor have practitioners been involved in program design and program management • Being recipients of development aid meant that we did not necessarily understood, engaged or were part of the development process – Governments received the money – which does not necessarily mean it ended up with the intended beneficiary communities – Development was based on developed economies principles (Western Solutions)
  21. 21. • Large foundationsNorth Africa – Wealthy individuals – Oil Barons – Aga Khan Foundation – Politically complex • Muslim (Faith based) Closed Foundations • War Stricken – aid complexity – who to give to and who actually receive • Large global partnerships • Government considerations (political correctness) • Government Recipient
  22. 22. West & East & Central Africa • Hundreds of thousands NGO’s • High level of corruption – Big government based foundations – Nigeria Government/Community Foundation (NGCC) – Supported by Oil companies – i.e. Shell – Large multi sectoral partnerships – British/Dutch High commissions, World Bank, United Nations – Integrated Programs – skills, jobs, exports, market based – Niger Delta and Rift Valley • Development Sector has become an industry/career – Third Sector • Companies mainly involved in sponsorships, reputation building type programs • Increased cost of doing business – licence to operate • Scalability a problem – development highly fragmented • Influenced by international development agencies and their agenda’s • Indigenous funding very low and slow – mostly multi national companies • Strokes of brilliance – Foundations (grantmaking) collective fundraising – management fees – capacity building for smaller NGO’s
  23. 23. Southern AfricaTrends (1) - Regional• South to South exchange (vs. North to South)• Support regional integration (SADC) – cross border investment• Growing role of emerging economies (BRICSA) – global partnerships on government level (no trickle down to industry/practice yet)• Role of China in African Investment (Infrastructure)• Major growth in private philanthropy and its profile and birth of new champions/philanthropists/high net worth individuals• Growth in private , community and family foundations – working across borders• New market based approaches to Socio Economic Development
  24. 24. Trends (2) – Market Based Approaches - Innovation• Bottom of Pyramid – BOP - Models• Micro credit movement• Venture philanthropy – Seed Capital• Social entrepreneurs and entrepreneurship• Impact Investment• New players – outsourced, insourced, hybrid, intermediary solutions
  25. 25. • Trends (3) – New Influences Greater emphasis on measurement of impact – (Sustainability reporting – GRI G3.1)• Growth in volunteerism – Global networking, social networks/media – Recession – leverage and extend funds• New patterns in giving – Increasing focus on indigenous giving and community development patterns (poor philanthropist), growing diaspora giving• Quest for sustainability – Definition of sustainability in socio economic development context• Issue of stakeholder engagement – Social baseline studies, research – evidence based development models to clearly understand impact and requirements of stakeholders
  26. 26. Trends (4) - Legislation• Motivation has changed – Compliance with Broad Based Black Economic Empowerment – BBBEE Act – Compliance with industry based regulation • SLP, LED (Mining) & ED (BEE) , Financial Access (Financial Charter), Education – Impact of Johannesburg Stock Exchange Socially Responsible Investment Index (JSE-SRI) – Sustainability Reporting have become Integrated Reporting (King III)• Companies have become very sensitive to socio economic development – the value, expectations, requirements and impact
  27. 27. Trends (5) – Financial Crises• Good News – Debate about aid / development effectiveness – Focus more on trade and investment approaches – Policy implementation and systemic reform – focussing on specific issues - education, health, job creation – Multi sectoral partnerships – New developmental models - social impact investing, cause related marketing, industry based investments, large scale, new innovation in program design – More focus on measurement – impact and return
  28. 28. • Bad News – More pressure on Trends (5) developmental assistance – Donors not living up to pledges Financial Crises – Even though growth in community foundations numerous NGO’s closing doors – Project based funding no operational support – Fewer international donors and development agencies in Southern Africa – Realisation that development takes a long time – which might be a luxury for some – Realisation that development requires many players and includes many facets – More isolated development – less collaboration – More focus on sustainability
  29. 29. Trends (6) - Business• Movement by business into unconventional funding areas – Policy, advocacy, human rights, gender, climate change – Partnerships with government and civil society – Longer term investment and support – Increase in cross boarder giving and global philanthropy – as African companies became more global – Emphasis on ROI and impact – Challenges in enabling environment – compliance focused investment and giving
  30. 30. Trends (7) – Focus Areas• Job Creation – More for Enterprise Development, SME Development, Skills development• Environment – More funding – renewable energy, mitigate impact, carbon off setting/trading, water• Education – Less funding for ECD, Schools, Bursaries, FET and subject specific (Science, Maths, Technology)• Health – Less for HIV/Aids – government refocusing and business follows• Overall – Industry specific funding – Mines – Infrastructure (Schools, clinics), Pharmaceutical – Health/Primary health care, Petroleum – Environmental, FMCG – BOP
  31. 31. Issues• Impact of government funding – social grants – Greater dependency creation, less sustainability, less developmental approaches• Quest for impact and sustainability – How do we define sustainability in SED• Scalability and Collaboration – How do we move from less than $1 to self sufficiency and give hope to the youth• New issues – food security, water scarcity, impact of climate chance – How do we deal with future challenges if we are not meeting today’s requirements and issues
  32. 32. Towards the Future• Innovation and Creativity to solve Africa’s problems• Responsiveness and Responsibility of everyone to solve Africa’s problems• Scalability and Focus to solve particular problems endemic to the African Continent
  33. 33. Follow the moneyTrialogue – CSI Handbook 13th Edition R5.4 (b) = 2010 R5.1 (b) = 2009 R4.1 (b) = 2008 R3.2 (b) = 2007
  34. 34. Hot off the press• Funding increased by 5.9% - (inflation 5.8% - NO real growth) – Improved CSI Accounting – Broader spectrum of giving/spending – CSI Definitions and measurement in state of flux • SED in BEE Codes • LED in Industry Charters • Social & Labour Plan in Mining Charter • Contributions – Cash, Non-Cash (product/employee time) – BEE Act – more are giving and giving more – Spending remains concentrated – top 100 companies – 70% of all CSI spend – SOE and Mining outspending the rest – “Facilitate economic inclusion & enterprise development” influenced increase at the expense of welfare-based spending – Big 4 – Education (31%), Social Dev (16%), Entrepreneurship (13%), HIV/Aids (11%)
  35. 35. Impact of the recession • 14% cut in CSI budgets – 2010 • 20% cut in 2009 • 23% cut in 2008 – More than 50% over last three years • 35% of all budgets are spent nationally • 23% of CSI spend is concentrated in Gauteng • Remaining 39% of spend is across 8 provinces • Many of the poorest provinces (Eastern/Northern Cape) receives little funding • Spend/budgets now include LTO programs i.e. financial literacy - banks and access – healthcare and financial services, infrastructure - mines
  36. 36. Evolving CSI practice • Legislation key driver – Sector charter, licence to operate, stakeholder pressure, reputation, BEE Codes • Less than half of CSI funding goes to NPO’s – Direct funding to industry initiatives (eg. NBI), direct to government programs, directly to schools, universities, hospitals, directly to development own programs) • Monitoring and Evaluation is gaining traction • Partnership models is increasing
  37. 37. What’s New• New Sectoral Classifications – Education – Social & Community Development – Health & HIV/Aids – Entrepreneurship & Job Creation – Training, Capacity Building & Skills Development – Environment – Arts & Culture – Food Security & Agriculture – Sports Development – Safety & Security – Non-Sector Specific donations & Grants – Housing & Living Conditions
  38. 38. Popularity • Education = 32% of all funding – but decrease of nearly 10% in amounts • Health = 16 of total funding% - decline of 11% • Social and Community Development = 10% - decline of 16% • Food security and agriculture – 5% of all funding, increase of 4% • Enterprise Development = 10% increase of almost 10% • Environment – 8% - increase of 3% • Remaining 7 categories receive less than 5% of budgets
  39. 39. •• Supported by 93% of all corporates Accounts for 32.4% of all spent Education• Most funding to school system 29% (GR 10 – 12); 28% to GR 1-9), bursaries and scholarships – 25%• Maths and Science 30% – Further education & training (FET 10- 12) – Tertiary education (universities, technikons) – General education (Gr 1-9) – Early Childhood development – Adult basic education & training (ABET) – Bursaries and university chairs – Maths, science and technical education – Information technology/computers – Infrastructure, buildings, facilities – Teacher Development – Life skills – Curriculum development/course materials/text books – School governance and functionality – Language development
  40. 40. Health & HIV/Aids• Supported by 64% of all corporates• Accounts to 16.7% of all spent – Hospices – Primary Healthcare – Training Healthcare workers – Research & Education – Health Infrastructure, equipment & medicines – Specialist care• HIV/Aids – Support - Aids orphan support, testing, home-based care, counseling – Education & awareness – employee family education, community education, health worker training, school-based education – Treatment – infrastructure provision, provision of medicines
  41. 41. Social and Community Development• Supported by 78% of all corporates• Accounts to 12.5% of all spent – Orphans & vulnerable children – OD & Capacity building – People with disabilities – Feeding schemes – The aged – Victims of violence and abuse – The destitute/homeless/shelters – Disaster relief – Livelihood strategies – Preventative programmes, prisoners – Animal care – Multi-service delivery (multi-purpose centers, etc) – Organisational, Capacity & Community Development
  42. 42. Food Security & Agriculture• Supported by 35% of corporates• Received 6% of total CSI budget – Food Relief/Feeding Schemes – Survivalist farming - Food Gardens & Permaculture – Small Scale farming – Infrastructure, facilities & equipment – Non-specific general donations
  43. 43. Enterprise Development• Supported by 40% of all corporates• Accounts to 5.6% of all spent – Entrepreneurial skills development – Supporting existing SMMEs – Infrastructure and facilities – Access to finance and resources – Outsourcing, procurement and sub-contracting
  44. 44. Environment • Supported by 49% of all corporates • Accounts to 6.8% of all spent – Wildlife conservation – Waste management & recycling – Biodiversity, alien clearing – Water conservation, wetlands management – Urban greening
  45. 45. Training, Capacity Building and Skills Development • Supported by 44% of all corporates • Accounts to 5.2% of all spent – Technical and vocational training – Entrepreneurial training – Capacity building for the non profit sector
  46. 46. Arts & Culture • Supported by 35% of all corporates • Accounts to 4.6% of all spent – Performing Arts – Visual arts – Festivals, competitions & awards – Heritage and culture – Craft sector – Language & literature
  47. 47. Safety & Security • Supported by 21% of all corporates • Accounts to 2.3% of all spent – Business against crime – Rehabilitation of prisoners, victim support, trauma counseling, gang-related violence, road safety – National campaigns, community police forums, school crime & safety programmes – Capacity building/empowerment programmes
  48. 48. Housing & Living Conditions • Supported by 19% of all corporates • Accounts to 3.5% of all spent – Facilitating housing development – Employee involvement in home building – Material supply – Water & Sanitation – Energy/energy efficiency initiatives
  49. 49. Sports Development• Supported by 30% of all corporates• Accounts to 2.2% of all spent – Soccer – Rugby – Basketball & Netball – Cricket – Athletics – Sport for disabled
  50. 50. NPO Sector• Decline in funding: – Global financial crises and ensuing economic slowdown – BEE Codes• Impact – Struggling to survive – Closed down – Discontinued projects – Cut back in service offering
  51. 51. What‟s in/What‟s OutSector What’s In What’s Out WhyEducation Support of community facilities, Bursaries for job placement, Part of company normal bursaries for underprivileged within the company, crèche activity as it benefits without employment obligations facilities for employees employees directlyTraining Community training, skills In-company training, Can be reclaimed under development for unemployed, adult workplace courses, adult Seta/Income Tax Act basic education and training in the basic training and education community for employeesEnvironment Support of conservation projects; Operational compliance Meeting legislated obligations community clean-up projects aspects such as emissions; in SA rehabilitation requirementsJob Creation Job creation and small business Affirmative or small business Assisting BEE and development projects external to procurement; outsourcing, procurement targets to meet the workplace retrenchment programs legislated obligations in SAHousing Housing programs for the general Employee housing benefits Part of pre-and post 94 community imperatives to benefit employeesArts & Culture Support of developmental Sponsorship of commercial Largely for company and/or programs, development of new events staff benefit talentHealth Support of community clinics, Occupational health and Meeting legislated obligations health programs in the community, safety, workplace AIDS in SA AIDS awareness and care projects awareness, clinic facilities in the community, ARV’s for and ARV’s for employees communitySport Support of developmental programs Sponsorship of commercial Primarily promotion of events or professional teams company brand rather than direct impact on sports development
  52. 52. State of Giving South Africa
  53. 53. Giving is big business*• Listed Companies – R5.6 billion per annum• Unlisted Companies – R2 billion per annum• State Owned Enterprises – R1.5 billion per annum• SMEs – R1 billion per annum• Individuals – R1 billion per month• Private Individuals/Family Foundations – R1 billion per annum• International Giving – R2 (3=2010) billion per annum• NGC estimation = CSI in SA is a R45 billion industry and not R5 billion*NGC own research
  54. 54. Reported Budgets 2010 - mAbsa R102 Barloworld R7.6 Harmony R27.6Acsa R24 BHP Biliton R115 HCI Foundation R37Advtech R42 Bidvest R25.3 Impala Platinum R61African Bank R8.2 British American Tobacco R30 Imperial Holdings R13African Rainbow Minerals R19.3 De Beers R43 Investec R29Afrox R4.2 Discovery R6.3 Liberty R20Altech/Altron R12.4 Eskom Foundation R79.5 Lonmin R64Anglo American R600 First Rand Group R101 Massmart Holdings R20Anglo Platinum R245 Foshini Group R24.3 MTN SA Foundation R74AngloGold Ashanti R21.3 Gold Fields R15 Murray & Roberts R21ArcelorMittal R40 Grindrod R2.3 Nampak R8Aveng R17 Group 5 R2.7 Nedbank R30Netcare R37 Rainbow R1.6 Transnet Foundation R60New Clicks Holdings R14.4 Sanlam R19 Truworths R28Northam Platinum R9.5 Santam R5 Vodacom R68Oceana Group R4.1 Sappi R16.3 Woolworths R297Old Mutual R32 Sasol R50 Unilever R12.3Palabora Foundation R32.6 Spar Group R6.4 Tongaat Hullet R15.7PetroSA R44.8 Spier R7.9 Standard Bank R94Pick & Pay R61 Telkom Foundation R47 Sun International R20.4Pioneer Foods R5.6 Tiger Brands R25 PPC Cement R10Primedia R53.7 AVI R15.5 Engen R18.7
  55. 55. Non SpendersMultinationals – Telecoms Nokia, Samsung, Erickson, SiemensFMCG L’Oreal, Revlon, Unilever, Proctor & GambleFast Food KFC, MacDonalds, Cadbury’s, NestleFinancial Visa, Mastercard, American Express British Airways, British TelecomAutomotive BMW, SAAB, KIA, HondaNationals Mugg & Bean, Distell, Nando’s, BEEFast Food and BEE Companies – Rainbow and Mvelephanda, WipholdIndustries Media, Property, Services Finance – Asset Management/Investment Medical, Automotive Advertising, Hotels (Protea, City Lodge Direct Selling/Marketing – Amway, etcSectors Retail - Pep, Ackermans, Stuttafords Pharma – Novartis, Pfizer, Adcock, Aspen Oil/Petroleum – Shell, Total, BPState Owned Enterprises National Ports Authorities, Armscor, SAA
  56. 56. Budget Trends• Included in the budgets of corporates for CSI are: – Spent on Events and awards – 45% – Monitoring and Evaluation of projects – 43% – Marketing and Promotion of CSI programs – 40% – CSI Reporting – 34% – External Expertise – 30% – Own administration – 28%• SOOOO,• how much is going to development work?
  57. 57. Other Contributors*• Zennex Foundation - R30 m • Mott Foundation – R20 million• Oprah – R150 m • Bernard van Leer Foundation – R10 m• Bill and Melinda Gates –R642 m • Joseph Rowntree Charitable Trust• Carnegie Corporation - R200 m - R10 million• Ford Foundation – R78 m • Difid Foundation– R30 million• MacArthur Foundation – R30 m • Shuttleworth Foundation – R50m • Family Foundations• Rockefeller Foundation - R30 m – Ackerman Foundation(R40m)• Kaiser Family Foundation – – Oppenheimer (R30m) R195m – Murray (R20m)• Atlantic Philanthropies – R125 m – Rupert (R50m)• Open Society Foundation – R50m – Appelbaum (R80m)• Kellogg Foundation - R25 m *NGC Own research
  58. 58. Interesting Finding• Total Aid in 2008 in m US Dollars – 700 hundred million USD• Ten biggest donors in 2008 – EU Commission – 173 m USD – US – 137 m USD – UK – 70 m USD – Netherlands – 55 m USD – Germany – 37m USD – France – 28 m USD – Global Fund (GFATM) – 26m USD – Sweden – 23 m USD – Denmark – 18 m USD – Belgium – 18 m USD• Together with other CSI funds this is a LOT OF MONEY
  59. 59. Foreign Development Aid• SA receives around 1/3 of global aid, or around US$30 billion• USAID – US$85 million• Danida, Cida, AUSAID, DFID – R3.7 billion• Largest investors are USAID, European Investment Bank, EU, Germany and Sweden• What they give – grants, technical assistance and loans• The RDP fund acts as a clearing housing for money donated to SA.• The fund showed refunds since 2002-(R79 million), 2003- (R40 million), 2004-R66 million, 2005 – (R72 million), 2006 – (R80 million), 2007 – (R79 million), 2008 (R87 million).• This is due to capacity problems. More specifically delayed requests for funding, unrealistic time frames, incomplete and inaccurate financial statements and non compliance.
  60. 60. Sectoral Focus of Global DonorsDonor SectorEuropean Union Water, LED, EducationUSAID Education, democracy and governance, health, environment, economic capacity, employmentNorway Democracy, higher education, research, environment, natural resources and energySweden Education, private sector, cultural sector, urban sector, research, HIV/AIDS, capacity buildingNetherlands Justice, youth, education and local governmentDenmark Private Sector Development, HIV/Aids, environment
  61. 61. Private Foreign Foundations• More than 70 foreign based private foundations in SA• More than 60 foreign faith based organisations in SA• More than 100 foreign NGOs in SA• Function as grantmakers, supporting specific programmes and run their own projects• Providing volunteers, professional services, material resources, exchange programs.• Most popular focus areas education, technology/communications, capacity building, environment, HIV/Aids & Health, culture, justice, women, children, justice/peace/conflict resolution, poverty.
  62. 62. Special Funds• Initiatives by government to address poverty and development• Budget – R55 billion per annum from Government, R5 billion from donors• Special Poverty Relief Account• Independent Development Trust• Isibaya Fund• Khula• National Development Agency• National Lottery Board• National Skills Fund• Operation Jumpstart Association• Ntsika• South African Womens Entrepreneur Network• Umsobomvu Youth Fund – (Replaced by National Youth Development Fund)• National Empowerment Fund• Local Economic Development Fund• uTshani Fund
  63. 63. Public-Private-Partnerships• National Business Initiative• Business Against Crime• Business Trust• Joint Education Trust
  64. 64. Trends, Drivers andChallenges in Grantmaking
  65. 65. 2 Perspectives• Emerging Trends – linked to economic crises• Steadfast Trends – monitored over a period of time – 5 years/top 20 most influencing trends for the industry overall
  66. 66. 1st Perspective Emerging Trends linked to economic crises• Adjustment of budgets – No new MOU’s, only focused on committed, signed agreements• Stronger focus on non-cash giving – Product and services, volunteer hours, skills, time• Stronger focus on measurement – Monitoring and evaluation and impact assessment• Stronger focus on new strategy development – New focus areas• Increased employee volunteerism & matched giving – To try and leverage budgets• Greater alignment with Sustainability divisions – Focus on Enterprise Development and Environmental Impact• Specific industry changes – Automotive/Mining/Manufacturing industries in decline, declining budgets
  67. 67. • Co-operation is no longer a competitive factorImpacts – Communities in distress needs help, working together will leverage funds • Industry bodies need to address specific issues – Unions demand greater involvement and assistance and recognition of social imperatives • Communication with development partners is crucial – Consider operational costs to ensure successful delivery of programmes • All stakeholders will watch how companies respond to economic crises – Greater opportunity for stakeholder involvement and participation
  68. 68. New Patterns and influencers• Leveraging core assets – Distribution channels – Suppliers – value chain – Access to markets – customers – Access to sustainability – income generation – social entrepreneurship• Impact of climate change – Reduced access to water – Reduced food production – cost of food – Need for local producers to reduce carbon footprint (importing)• Sustainability – The race to zero carbon impact – offsetting carbon emissions
  69. 69. 2nd Perspective Trends driving innovationINNOVATION –Is innovation possible in asocio economic development context?Is it fair to expect innovation?How will we know our solution is innovative?How will we measureINNOVATION?IMPACT?SUSTAINABILITY?RETURN ON INVESTMENT?Is it time for “back to basics” or radical innovation?
  70. 70. Top Trends• Most influential trends driving innovation – Trend 1 – Social Entrepreneurship – Trend 2 – Commercialisation of CSI – Trend 3 – Influence of Compliance – Trend 4 – The rise of stakeholder engagement – Trend 5 – The pressure to measure – Trend 6 – Bigger, better models of development – Trend 7 – Green is the new black – Trend 8 - Put away the lenses/gloves – Trend 9 – Follow the money – Trend 10 - Hard facts, dangerous half truths and total nonsense
  71. 71. Trend 1 – Social Entrepreneurship• The rise of social entrepreneurship • Practitioners not ready – Mohammad Yunus – Current grantmaking criteria does• Social entrepreneurs not allow flexibility – Charles Maisel – Cannot fund for-profits – Tamzin Ractliff – Don’t fund individuals• Social Enterprises – Fund only specific focus areas – Grameen Bank notwithstanding real needs• Social Venture Capital – Risk adverse – Sasix – Lack entrepreneurial understanding & insight – Greater Good – One size fits all approach to• Social Collaboration grantmaking – Grow South Africa – Discriminate against profitability – Don’t really understand• NOTE:2011 sustainability• ISSUE OF ENTERPRISE DEVELOPMENT! • NOTE 2011: • ISSUE OF SOCIAL ENTERPRISE SOCIAL ENTREPRENEURSHIPBest Practice in SA – Sasix – Able to raise and distribute R32-m in 36 mths
  72. 72. Trend 2 – Commercialisation of CSI • The fortune at the Bottom of • Driven by business benefits the Pyramid and future profits • Products for poor people • Increased impact & awareness • Making markets work for the of sustainability and poor interconnectedness • The next 4 billion • Search for double/triple bottom • Bringing together the 1st and line benefits 2nd economies – Financial vs Social Returns – Financial vs Social vs • Cause Related Marketing Environmental Impact • Flagship Programs • Elusive sustainability • NOTE 2011: • NOTE 2011: • ISSUE OF HIGH PROFILE • MAJOR FMCG COMPANIES PROJECTS – OUTSURANCE – REVENUE MODELS / DIAL DIRECTBest Practice in SA – Nedbank Affinity Program – R2m for NMCF in 6 months, R75 m for WWF in 24 months, excluding Sports Development and Arts & Culture Programmes
  73. 73. Trend 3 – The influence of compliance• Tick box approach • Add to burden of• Legislation are driving administration both for motivation grantees and grantors• Compliance are hard work • Driving pressure to measure• The good, the bad and the ugly • Reporting becomes big – Good - everyone now gives • New strategies/new – Bad – once spent 1% NPAT – budgets/new focus areas/new stop reporting lines – Ugly – Reducing budgets • Shifts in development – new• Points drive investments flavours of the month• NOTE 2011: • Enterprise development at the cost of social development and• ISSUE OF „BLACK‟ welfare RECIPIENTS – the poor not necessarily classified by • NOTE 2011: race anymore • ISSUE OF ASSURANCE AND GOVERNANCE Best Practice in South Africa – Linking Enterprise Development (ED), Local Economic Development (LED), and Procurement to CSI spent.
  74. 74. Trend 4 – The rise of stakeholderengagement & activism• Product and market • Ring fencing CSI – The stewardship / responsibility popularity of foundations• Governance and ethics • Responsibility, Transparency• Human rights and gender and Accountability equality • Give or else – mentality• Risk vs reputation • Communities are becoming• Giving vs getting aware• Food vs fuel • Issues and reputation become• Humanities vs Humanitarians obstacles to giving• NOTE 2011: • NOTE 2011:• ISSUE OF LABOUR UNIONS • ABILITY TO USE CSI FOR AND GOVERNMENT NON RESEARCH AND SERVICE DELIVERY STAKEHOLDER ENGAGEMENT Best Practice in SA – British American Tobacco – South African Breweries, Anglo American – Sustainability Reports
  75. 75. Trend 5 – The pressure to measure• Reporting requires • Practitioners are not measurement indicators development specialists• Measurement indicators • Practitioners have good hearts requires objectives and targets but not good / expert• Objectives and targets require knowledge strategic intent • Practitioners rely on others and• Strategic intent requires their performance are knowledge influenced by issues outside• NOTE 2011: their control• CAREFUL OF HOW AND • Practitioners don’t understand WHAT YOU REPORT – how to prove ROI and Impact SUSTAINABILITY REPORT • NOTE 2011: • INDICATORS NEED TO BE ALIGNED WITH THE STRATEGY OBJECTIVESBest Practice in Kenya – Kenya Power & Electricity Co in Kiburu - Pro-poor strategy – (prepaid meters, ready board, least cost alternative (alternative energy sources),local sustainability – planting trees – offset carbon footprint, buying poles from local communities to provide income opportunities – enterprise development- Focus on environment – carbon trading & energy saving bulbs – 1m people 18 months
  76. 76. Trend 6 – Bigger, better models ofdevelopment• Marketing is important • War on ideas• Communication (PR) is • Piecemeal approaches will not important work• Integration and alignment is • Effective social change requires important – long-term commitment• Proving impact and return is – willingness to take risks important – the ability to work across• It just makes so much sense sectors and silos• It becomes the new heart and – investments in strategic sole of our marketing research and policy analysis campaigns • NOTE 2011:• NOTE 2011: • THE ISSUE OF EXIT AND• IMPACT OF RECESSION ON SUSTAINABILITY NEEDS TO NUMBER OF FOCUS AREAS BE PRE-DEFINED AND DEVELOPMENT SECTORS Best Practice in Kenya – CFW – Franchised Health Care 50c for primary health care, 4000 nurses earning $4000 py
  77. 77. Trend 7 – Green is the new black• Environmental impact is driven • All companies are adding by global agendas environmental projects to• Until now we only focused on the funding mix social impact• An idea whose time has come • Agriculture/Food• The raise of ethical trading and Security/Green Farming/ sourcing, fair trade, green Organic Farming/urban trade, eco trade, carbon trade renewal and greening –• NOTE 2011: the latest CSI• INTEGRATE CSI WITH phenomenon SUSTAINABILITY • NOTE 2011: STRATEGY TO MITIGATE AND MANAGE RISK! • NOT ALL GREEN PROJECTS ARE EQUAL Best Practice in SA – Woolworths – Good Food Journey Enterprise Development and Procurement, recycling targets
  78. 78. Trend 8 – Put away the gloves• Tipping points • Serious questions – Absence of Market Standards – What have we changed – Lack of Proven “Return on – What have we contributed Investment” – What is our impact – Market Fragmentation – What was the return on – Grant Making in Isolation investment yielded – Insufficient Resources – What access do we have to – Various Investors, Various Knowledge Instruments – What is our Code of Conduct – Tension between – Where are the Industry forums & competitiveness, Cost of collaboration Capital and Community/ – What about the underdeveloped government needs/wants/ Concepts Regarding the expectations Meaning of “Going to Scale” – Market “Insiders” versus – NOTE 2011 – ARE WE (CSI Market “Outsiders” INDUSTRY) SUSTAINABLE? – Market Hype Versus Vision Grounded in Practice Best Practice – Rift Valley – Ghana Flowers, Tea, Coffee, Vegetables From less than $1 a day to $3500 py
  79. 79. Trend 9 – Follow the money• R40 billion + per annum must • New rules of engagement yield results – Support organisations not• Donors operate independent of programs each other – Use influence not just money – Experiment, pilot, scale• Donor motivation varies greatly – Redefine the spheres of activity within the market – Influence public policy• Metrics to assist in identifying – Cross the borders effective organisations are – Consider politically incorrect largely lacking investment opportunities to fast track skills, job creation and• Information systems to track poverty alleviation effectiveness are lacking • NOTE 2011:• NOTE 2011: • THE IMPORTANCE OF• IT IS NOT ABOUT THE SOCIAL BASELINE STUDIES NUMBERS! BUT THE AND STAKEHOLDER IMPACT AND SROI ENGAGEMENT Best Practice in South Africa – SOE in SA – Escom, Telkom, Transnet, NDA etc – more than R1b in 2008
  80. 80. Trend 10 - Hard facts, dangerous half truths and total nonsense• Build to last, great to good • All we measure is input (how• It might help you, if implementing much we spent) and activities it doesn’t kill your organisation first (what we do) and not impact• What is good for them might be (over time) and we don’t report bad for you on ROI• Great people and companies • Creating a Culture of Learning succeed despite rather than – Learn from evaluations because of some practices – Learn from communities• Don’t believe your own brochures, – Learn with and from grantees PR Materials and Annual/ – Learn with and from other funders Sustainability Reports – Learn from academic institutions• NOTE 2011: – Learn from professionals• WHAT ARE WE DOING – Learning from other types of DIFFERENTLY – COMPARED information intermediaries TO PREVIOUS YEARS?Best Practice - Safaricom Keyna - renewable energy, recycling of handsets, providing jobs for physically challenged - Measuring impact on market – labor market, rural development, contribution to GDP, leverage ofgovernment resources, development sector capacity and other corporates
  81. 81. Why do CSI Fail? (1)• Limited understanding of the often complex local context: – Companies have sometimes commenced community relations, investment and development initiatives without fully understanding the socio-cultural context or how their presence and actions can affect the complex dynamics between and among local stakeholder groups. This has led to a range of unintended consequences, including the exacerbation of tensions or creation of conflict among communities• Insufficient participation and ownership by local stakeholders: – Delivery of community projects without sufficient involvement of local communities and local government in decision making around development priorities has resulted in projects with low relevance to local stakeholders (and therefore by implication – low impact).• A perception of “giving” rather than “investment” (Including lack of clear objectives): – The tendency to view community relations, investment and development as charity, rather than as an investment linked to the business and operational objectives – has resulted in vague mandates and a lack of direction and purpose for socio economic development strategies and programs.• Detachment from the business: – Community investment and development programs have tended to be planned and implemented in isolation from business activities and other day-to-day actions affecting stakeholders. This has limited CSI’s effectiveness in helping the company to address key social risks and opportunities at the site level or to take advantage of business efficiencies and competencies in support of local communities.
  82. 82. Why do CSI Fail? (2)• Responding to local requests in an ad hoc manner: – Ad hoc approaches are typically opportunistic and focus on short-term outputs rather than catalysing long-term change. The risk, in many cases, is that the sum of all these disparate contributions to local causes does not add up to anything that either the company or host communities can point to as a tangible or lasting socio economic development benefit.• Lack of professionalism and business rigor: – Few CSI programs are held to the same standards that companies apply to other business investments they make (in terms of professional rigor, a clear business rationale, planning and budgeting processes, and accountability for results). This often reflects the low priority given to CSI by senior management when there is no perceived link to the company’s bottom line.• Insufficient focus on sustainability: – It is only in recent years that the sustainability of CSI activities supported by companies has become a key factor in project selection and design. In the past, short- term objectives took priority over longer-term considerations, and sustainability policies and criteria were not given much emphasis.• Provision of free goods and services: – While well-intended, the long-term consequences of providing free goods and services, or infrastructure for that matter, have not proven to be in the interests of either the company or local stakeholders. The lack of requirements for matching contributions (whether financial or in-kind) has made it difficult to generate shared ownership or financial sustainability, and has instead fostered dependency.
  83. 83. Why do CSI Fail? (3)• No exit or handover strategy: – Commencing activities without planning in advance for the company‟s eventual withdrawal has rendered many company-supported programs unsustainable and created difficulties for the company around its “social license to exit” in times of financial cutbacks or project end.• Overemphasis on infrastructure and under emphasis on skills/capacity building: – Traditionally, CSI programs have been dominated by company-led, bricks-and-mortar types of projects (particularly in the mining industry) with a significant lack of investment in the participatory processes, such as skills building, and organisational development necessary to affect and maintain long-term change.• Lack of transparency and clear criteria: – Unclear criteria have led to numerous cases of conflict between and among communities over who gets what and why. When transparent criteria are lacking, company practice in distributing benefits may be perceived as secretive, unpredictable, and susceptible to manipulation.• Failure to measure and communicate results: – In many cases the effectiveness of CSI programs is unknown because it has not been systematically tracked or measured the way most other business activities or expenditures would be. Common shortcomings include the lack of proper baseline data (i.e. social impact studies) and a focus on measuring the volume of spend (inputs) or the number of outputs rather than the actual quality of outcomes.
  84. 84. Getting Started and Making it work
  85. 85. Our Approach• Strategic Review – Business – Brand – Operations – Sustainability• Internal and External Stakeholder Dialogue – Management, Executive, Employees – Partners, Beneficiaries, Intermediaries• Benchmarking – Local, Global, Inside and Outside Industry – Comparative and Competitive Analysis – Industry / Sector Review• Social Baseline Studies / Sector Specific Research – Education, Health, etc.
  86. 86. Group Feedback and Interaction• Defining the business case• Developing the strategy and policy• Developing focus areas• Developing grantmaking criteria• The process – application, consideration, approval, contractual, funding, monitoring/ evaluation/impact assessment, reporting, communication
  87. 87. The Ages and Stages of CSI*Business Age Stage of CSI Modus Key Enabler Stakeholder Operandi TargetGreed Defensive Ad Hoc Investments Shareholders, Interventions government and employeesPhilanthropy Charitable Donations Projects CommunitiesMarketing Promotional Public Media General Public RelationsManagement Strategic Management Codes Shareholders, Systems NGO’s, CSO’sResponsibility Systemic Business Products Regulators and Models Customers The Age of Responsibility – CSR 2 – Dr Wayne Visser
  88. 88. Process of Strategic CSIAssess the Assess the Engage Invest in Set the Select Measure andbusiness local Communities Capacity Parameters implementa- communi-case context Building tion models cate resultsBusiness Socio Community Needs Objectives, In-house BaselineCase Economic Planning Assessment guiding Assessment principles and criteriaRisk and Stakeholders Assets and Target Investment Multi- Indicatorsopportuni- and opportunities Groups Areas stakeholderties networks partnershipsCore Institutional Visioning and Types of Exit strategy Third Party Communitycompeten- mapping prioritisation capacities perceptionscies and skillsInternal Partners Expectations Options and Budget Foundation Return onAlignment management strategies investmentProject Environment Gender Hybrid Models Communica-Cycle al Scanning tions Strategy Industry/ Competitors Benchmarking
  89. 89. Guidelines for Best Practice• Set out a 3-5 year plan for the company’s community investments• Establish community relations, investment and development strategic objectives that are linked to the business case• Identify target stakeholder groups and specify eligibility criteria• Link the Community Strategy to the local context by drawing upon socio economic baseline studies• Establish an iterative process of engagement with local stakeholders and partners on Community Relations, Investment and Development• Draw on the company’s core competencies and resources to support communities• Promote cross-functional coordination and accountability for supporting CSI objectives• Integrate CSI with other company programs that involve communities (stakeholder engagement, grievance process, environmental and social impact management, local hiring and contracting as well as Human Rights)• Set out criteria and guiding principles against which all Community Investment and Development proposals is screened• Identify the key program areas in which the company will invest• Identify the implementation model and decision-making / governance structures• Define roles and responsibilities, budget, scope, and timelines• Describe the company’s (and in particular the specific programs) exit / handover and sustainability strategies• Consider both short-term and long-term objectives• Describe how project results will be monitored and communicated
  90. 90. Getting Smarter: Support • DO YOU? – Devote a portion of the annual grantmaking budget to general operating support grants – Renew one-year grants sometimes, often or always – Support capacity-building activities among grantees – Award multiyear grants of two years or more sometimes, often or always – Directly support grantee leadership development activities – Is your general operating support grants greater now than it was three years ago
  91. 91. Getting smarter: Application practices• Do you? – Have a common (single/standard) application form – Have financial and other standard applicant information available online – Accept proposals that were prepared for other funders – Compensate nonprofits for their time if you approached them and requested a proposal – but then ultimately rejected it
  92. 92. Getting Smarter: Reporting Practices• Do you? – Require final reports often or always – Read Grant reports (by at least one, two or three staff members) – Use Grant reports to foster learning and a useful exchange between yourself and the grantees often or always – Ensure reporting requirements are often or always proportionate to the size and type of grant (e.g., a one-page report requirement for a small grant or event sponsorship) – Acknowledge receipt of grant reports within four weeks – Require Interim reports often or always – Have a common grant report form often or always
  93. 93. Getting Smarter: Feedback • Do you? – Solicit feedback of any kind (anonymous or non anonymous) from grantees and beneficiaries through surveys/interviews/focus groups – Test/compare the results and outcomes of your projects/programs against benchmarks or results of other funders or industry standards
  94. 94. Getting Smarter: Stakeholder Engagement• Do you?• Meet with grantee leaders to learn more about mutual issues and trends from their perspectives – Conduct site visits – Attend grantee events (e.g., fundraisers, performances) – Assess the needs of the communities or field(s) you serve (e.g., through surveys, interviews or focus groups) – Bring together funders and grantees to discuss matters of mutual interest – Invite grantees to address board members sometimes or often – Seek external input on grant proposals from representatives of recipient communities or other grantees – Seek advice from a grantee advisory committee about policies, priorities, practices or program areas – Delegate funding decision-making power to representatives of recipient communities or other grantees
  95. 95. Steps to more strategic grantmaking• Clarify your values (e.g. social justice)• Create a vision (e.g. health insurance/primary education for all South Africans)• Determine the best way to achieve intended results (through research, planning, use of best practices, careful execution and follow through)• Stay focused (it is hard to be strategic when you spread yourself too thin)• Align your resources (your expertise and network might be as useful as your money)
  96. 96. CSI – Strategy guidelines• A strategy that – Will support and contribute to positive social change – That encourages innovation and creativity in its application and interpretation – Is so innovative and creative that it becomes a competitive differentiator for the company – Draws on all the core competencies and resources of the company – Is easy to understand, execute, communicate, monitor and evaluate – Will encourage and ensure employees‟ involvement and support – Is so comprehensive that it will guarantee board, senior management and business unit commitment – Focus on areas that correlate societal challenges with business challenges – Is still neatly boxed and clearly defined
  97. 97. CSI policy guidelines• Support and promote projects with a specific relevance to the organisation• Focus on communities close to areas of business and operations• Collaborate with other funding and development agencies to promote and develop CSI (collective effort and greater contribution)• Collaborate with government – (consult and identify need for contribution)• Advise communities on project planning and implementation – to ensure project success• Focus on and strive to consolidate initiatives that derive greatest benefit to communities (large scale funding and economies of scale – cluster and rank initiatives)• Audit implementation and accomplishments – ascertain results and outcomes• Review and refine strategy and focus – continuous improvement
  98. 98. Strategic Considerations• Follow an inclusive process that allows all internal stakeholders to contribute any resources at their disposal to become involved in the CSI strategy• Follow a proactive approach that encourages communities to interact with the organisation in a deeper and more meaningful way• Ensure the involvement of employees in the process• Ensure that the objectives of the CSI strategy follow ethical grant making principals that support integrity, respect, and nurture and reflects diversity and cultivates mutual respect, with a bottom up approach• Allow communities to share their needs and requirements rather than impose interventions on such communities• Supports political, economic and social change and leave a legacy of empowerment
  99. 99. CSI Practitioners – Roles and Responsibilities• Build and maintain relationships with key stakeholders• Develop the business case for CSI• Get top management to understand the benefits of CSI• Understand the nature of development• Promote strategic CSI over compliance based CSI• Document processes, procedures and lessons learnt• Share development lessons and experiences• Ensure proper utilisation of all resources• Promote the integration of CSI into every business unit• Communicate CSI activities to all stakeholders• Understand what elements of project management are relevant• Ensure good governance and practices are ingrained• Ensure success of projects/programmes and interventions
  100. 100. Categories of CSI PractitionersType Characteristics Strengths WeaknessesThe Helper Often comes from a Often has a good May struggle to identify with community development understanding of community corporate culture and to align background issues and needs CSI with core business practiceThe Marketer Usually comes from a Has a good grasp of the May struggle to gain an marketing or communications company’s interests and is understanding of and background able to get the company acceptance by community brand value for its social organisations investmentThe Problem Solver Often comes into CSI as a Has the experience and May end up alienating othersThe Purist specialist in an area of resources necessary to in the process of addressing interest or with regard to a address a particular need or the need owing to his or her perceived need of a issue within the community expertise and specialist community knowledge of the subject matterThe Incidentalist The CSI function is only one Is often chosen on the basis May not have the time and of a number of other roles of proximity to the leaders of support to develop a well- that he or she fulfils within the the company conceptualized CSI model companyThe Purist Been there They have the knowledge Know everythingThe Professional CSI Done that and the experience. My model/project/legacyPractitioner Know everyone Can walk the talk and interact Knowledge is power Know all the rules at all levels. Don’t need to learn Know all the legislation Have developed best practice Don’t contribute to development models. learning/knowledge/ industry Very clear on what is right/wrong/ what is needed – best practice
  101. 101. Towards the Future
  102. 102. • Its more ambitious: Todays grantmakers are tackling giantThe Future of Giving issues, from remaking African education to curing cancer. • Its more strategic: Donors are taking the same systematic approach they used to compete in business, laying out detailed plans that get at the heart of systemic problems, not just symptoms. • Its more global: Just as business doesnt stop at national borders, neither does charitable giving. Donors like B. Gates to George Soros and Bono have sweeping international agendas. • It demands results: The new grantmakers and philanthropists attach a lot of strings. Recipients are often required to meet milestone goals, to invite foundation members onto their boards, and to produce measurable results--or risk losing their funding
  103. 103. The Future of Grantmaking• More scrutiny from legislators and regulators• More skepticism from consumers and the general public regarding motivation and impact of corporate giving, particularly cause marketing initiatives• More integration of corporate grantmaking with the larger Corporate Sustainability agenda• More requests from nonprofit organisations, both large and small, to help close budget gaps, particularly from social service providers facing more people in need every day• More pressure from internal management to cut costs, and possibly even grantmaking budgets• More emphasis on the role of companies as global citizens, with an obligation to help those in developing countries affected by HIV/AIDS and other global health issues
  104. 104. Challenges for 2011• Aligning the giving program more closely with the business needs.• Desired impacts are not being achieved – social problems persist and may even be worsening• Government has changed its involvement – organisations can no longer rely on government as a source of funding or support (resources) – disillusionment with government as a partner is growing• The challenge of global giving is putting more pressure on funders and their already diminishing budgets• Education issues, diversity and environment/sustainability are gaining in importance. Issues that are declining in importance include culture and the arts, faith-based organisations, alumni giving and global disease/pandemics.• Asia is receiving the bulk of the attention. There is much less interest in Africa.• The top three management priorities are the relationship to the broader corporate citizenship/sustainability agenda, measurement of results such as impact and return on investment and volunteerism.• The two biggest changes in corporate giving programs observed since 2007 are the greater alignment of giving programs with the business and cuts in budget and staff
  105. 105. Tipping Points or Flux• Tough questions – How is contributions spent – How much is being spent – Are we making a contribution or facilitating change – Are we entering a tick box mindset – Are we getting better at it, can we measure our impact – Are we talking about the same things
  106. 106. Carrots & Sticks • Are practitioners between a rock and hard place – do they have influence? – Are we strategic – Are we entering moral and ethical debates • Developers & implementers vs facilitators • The Achilles Heel - Measurement
  107. 107. Please note: This presentation is part of a larger body of research and knowledge. This information is the property of Next Generation Consultants and may not be copied or used without express permission.More tools, articles and training information is available at www.nextgeneration.co.za

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