CSI - Corporate Social Invesment and Community Development - 2009


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This presentation deals with the Corporate Social Investment, Community Development, Corporate Grantmaking Industry in South Africa. It is aimed at CSI practitioners and managers

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  • we are Traditional hiv/aids home based care and we help orphaned and vulnerable children and we also operate as a crises centre to our community members and we also provide them with home based care services.we would like to be helped by anyone who can donate or fund us to help this children became the better future for our country.
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CSI - Corporate Social Invesment and Community Development - 2009

  1. 1. Towards Best Practice Corporate Social Investment – 2009 Next Generation Consultants Reana Rossouw
  2. 2. Schedule of Events • CSI - The basics • CSI – The Industry • New influences • The state of giving and reputations • The latest trends • CSI Management and Implementation • Measuring, Evaluation and Impact Assessment
  3. 3. CSI – The Basics
  4. 4. CSI in context of definitions Corporate Social Investment Corporate Reputation How we care for the wellbeing of the Communities in which we operate Corporate Citizenship Corporate Social Responsibility Corporate Values Corporate Risk How we exercise accountable and How we manage material Responsible business practices risks and impacts
  5. 5. CSI has distinct elements – Is commonly defined as planned charitable giving to make a measurable and sustainable difference to recipients and communities – Has a strategic imperative where the social investment is somehow tied in with the business imperative. These strategic imperatives can be aligned with direct business activities and should be linked to corporate values – Goes beyond an organisations mandate and is extraneous to its normal business activities
  6. 6. The explanation • CSI is about the world outside the corporate walls – Communities, society, stakeholders, environment – Those people and entities that the organisation affect and/or that are affected by the organisation • CSI is… – about ensuring the sustainability of the communities that corporates are dependent on for their sustainability – If communities are too poor to buy our products, or too illiterate to read our communication/marketing materials/product information or too unskilled to become our employees – the corporate cannot be sustainable
  7. 7. Guidelines For CSI • The grant must be for the benefit of disadvantaged individuals/communities • Grants should not only be ad hoc but most should have strategic value and a quantifiable return on investment • The grant should be sufficient to cover costs for a reasonable period of time (both operational and programme costs) • The CSI process must be planned, with sensitivity towards the needs of the beneficiaries/communities • The process must have specific, identifiable and measurable impacts • There should be a monitoring and evaluation process in place to determine when objectives are reached/met • The grant should include necessary capacity building for the implementing agent and/or beneficiaries • Before any decision is made by the grant maker, the affect of the project on the beneficiaries needs to be considered (direct and indirect – intended or unintended)
  8. 8. Measurable Return Align strategic and On Investment for business imperatives Company CSI Measurable Impact on Society and Environment
  9. 9. Compliance Reputation/Risk Management Core Business Sustainability Objectives Governance CSI Company and Brand Values
  10. 10. Creating Future Markets & Protecting Existing Markets Sustainability of Client retention & acquisition surrounding Communities Support compliance (BEE & (buying power/suppliers) JSE-SRI) Future business Support Sustainability requirements (skills) strategy (Social Aspect) Less dependency on Licence to operate - grants (tax) conditions Return on Investment Development CSI Impact Jobs & Skills Houses Income Food Self Sustainability Mortality
  11. 11. CSI is NOT … • Donations or charity that do not contribute to sustainable development – they are handouts • Giving without involvement does not constitute sustainable development – it is charity • CSI is not a once-off event • A payoff or bribe – or the price for doing business • PR or marketing focus on CSI is spin doctoring not CSI • Simply a tax write off or tax benefit • A way to secure government contracts • Necessarily “a flavour of the month” thing • The latest buzzword or thinking in management • Simply a way to score points on the BEE Scorecard (compliance issue) • Simply an issue of compliance – tick box approach – making sure we do the minimum • Team building, cause related marketing, profitable sponsorships, employee volunteering, training of employees
  12. 12. CSI … • Refers to a company’s contributions (cash and non-cash) to people, organisations or communities that are external to the company – It excludes contributions to employees but may include input or giving to families of employees or local communities from which employees are drawn or where they live – Predominantly or entirely focused on disadvantaged individuals and communities – Excludes commercial sponsorship but may form a developmental arm of commercial sponsorship – Is not marketing or public relations orientated but requires a communications element – May have various legal forms - May be constituted as a Foundation or Trust, or form a company line department or division
  13. 13. CSI Rationale and Imperatives • Social Imperatives: Poverty, education, health, shelter and safety issues • Economic Imperatives: unemployment, unrest, criminal activities, skills shortages, CSR • Business Imperatives: BEE, sustainability reporting, JSE listing requirements • Political and Legal Imperatives: AsgiSA, Sector/Industry Charters, skills development, JIPSA, NEPAD • Global Imperatives: GRI, Millennium Development Goals, Kyoto or Equator Principles
  14. 14. Different Approaches to CSI • PR – CSI for reasons of publicity, primarily marketing exercise, incidental benefit to a cause, should be housed under marketing and funded by marketing not CSI. • Reputation – genuine effort to make a development difference, but prioritize the visibility factor, want to be seen as doing good, deriving short term goodwill or license to operate benefits. • Charitable giving – cheque book style donations to ad hoc range of good causes. Not easy to measure impact, and evaluation is not justified. Cannot be aligned to corporate interests. • Grantmaking – award funds according to pre-defined criteria. Company records basic project inputs and outputs, seldom evaluate project impact over time. Not able to document long term gains and lessons learnt as commitments are for 12/24 or 36 months only. • Social investment – Long-term commitment, stronger focus on returns. Returns defined from the outset and measuring outputs and evaluating impact are important. Usually an exit plan once success and continuity are reasonably assured, generally longer than 36 month commitment and investment. • Social change – Address system-wide imbalances rather than isolated causes. Requires developmental expertise and ability to influence developmental practices at advocacy, policy or government level. Striving to improve social conditions to assure long term business benefits. Generally longer than 10 year commitment and investment.
  15. 15. Towards Sustainable CSI Charity Create New Value Create Social Business as competitive Value Usual advantage Add Compliance Mitigate Risks Do what is Impacts required Control Costs Do no harm Shareholder Value Add
  16. 16. Progress towards Best Practice Traditional In Kind Venture Strategic Systemic Philanthropy Philanthropy Philanthropy Philanthropy Philanthropy Donations/ Products, Financial Aligned with core Collaborative Cheques services, skills resources, business interests, Partnerships, operational brand values, policy, advocacy advice & competencies, and and high impact expertise government goals change
  17. 17. Strategic CSI means… best practice • Formalised approach/documented strategy • Regular reporting • Senior management/board involvement • Alignment to core business • Working in partnerships • Dedicated CSI staff/team • Dedicated CSI department/foundation/Trust • Regular stakeholder consultation • Employee involvement • Regular monitoring, evaluation and impact assessment • Replication of successful projects • Development of best practice guidelines • Sharing lessons and insights
  18. 18. Benefits of CSI • Enhanced corporate reporting • Contributes to national empowerment and transformation • Supports company mission, vision, business growth objectives and brand values • Enhanced employee and community relationships • Enhanced access to new markets and specific stakeholders • Protects ‘licence to operate’ • Enhances corporate reputation, image & credentials • Contributes to sustainability and citizenship agenda • Builds stable communities around operations and supports recruitment and retention strategies • Facilitates access to governments and tenders • Uncovers new business opportunities
  19. 19. New perspectives on CSI
  20. 20. 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)
  21. 21. CSI and BEE Large Generic scorecard or Turnover greater than R35m Approved Sector Charter Enterprises applies Turnover between Qualifying Small Simplified Scorecard applies Choice of 4 of 7 elements R5m and R35m Enterprises (QSEs) All elements weigh 25% Turnover less Exempt Micro Exempt from BEE than R5m Enterprises (EMEs) And are recognised As Level 4 contributors
  22. 22. 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”
  23. 23. 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
  24. 24. CSI and the BEE Scorecard (cont’d) Direct Equity Ownership 20% Encourages the sharing of equity and voting Empower- rights with black people and black women ment Management 10% Encourages senior black decision making at executive board and senior top management levels Employ- Employment Equity 15% Encourages companies to identify and recruit ment black people at professional, middle and lower Equity management positions Skills Development 15% Encourages companies to develop black talent through spending on skills development and learnerships Indirect Preferential Procurement 20% Measures the extent to which enterprises Empower- 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 Residual Socio Economic 5% Encourages initiatives intended to directly provide black people who are natural persons with means of generating income for themselves
  25. 25. CSI and the Industry Charters • Mining Charter – Charter calls for the formulation of an Integrated Development Plan in areas where mining takes place and in labour sending areas. Also requires companies to indicate financial expenditure against such a plan • Financial Charter – Target of 0.5% of post tax operating profit, also calls for enterprise development and consumer education • ICT Charter – Target of 1.5% of pre-tax profit focus on education, health, enterprise development or part of licence conditions • Oil and Petroleum – no CSI target • Maritime Industry – no CSI target • Agriculture, Forestry & Fishing – part of residual • Building & Construction – part of residual • Media & Entertainment – 0.5% post tax profit – for advertising sector • Motor Vehicle Industry – Part of residual • Pharmaceutical & Health – Part of residual • Retail and wholesale – Part of residual • Services – Part of residual • Hospitality & Tourism – 1% of post tax profit • Other – Part of residual • Industry charters are currently being aligned with BEE framework – very SLOWLY
  26. 26. 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
  27. 27. Impact of JSE SRI Index • Increase in non-public information disclosure • Most companies now committing to sustainability – understand the imperative • Annual/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
  28. 28. 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, but no real increase in assurance/verification • Different reporting styles – Section of annual report – Section of sustainability report – Separate social/environmental report – Separate CSI report
  29. 29. Follow the money Around the world* *globalphilanthropy.org
  30. 30. Global Statistics (1) • US – 70 000 Foundations – Total charitable giving $250 billion – giving is big – a status thing – aimed at ‘evolved’ charitable concerns – university chairs, racial giving, cancer research • Canada – 10 000 Foundations - $1 billion charitable giving – 170 000 NGO’s • Latin America – Philanthropy is personal and informal, concerned with charity, emergency relief and involves an extended personal network of family, friends & neighbors. Dubious about organised giving because of corruption and mismanagement – volunteers play an unusually small role • Australia – New sector but growing strong – 600 000 non profit organisations – A$ 250 million
  31. 31. Global Statistics (2) • Europe in General – Charitable giving can be traced to the Middle Ages – 200 000 foundations in ‘old Europe’; - € 200 billion (Italy, German, Finnish, Belgium, France) – Growing sector of organised philanthropy – less Euro centric and more globally oriented and prominent – Western Europe (Austria, Belgium, France, Germany, Ireland and the Netherlands) reflect a welfare state – characterized by large civil society sector staffed by paid employees, heavily engaged in service provision, extensively financed by tax revenues and partnership between state and non profit sector – Strong influence of Catholic church – state opted to funnel social welfare through private, voluntary groups rather than delivering services themselves – Central and Eastern Europe (Czech Republic, Hungary, Poland, Romania, Slovakia) reflect soviet style regime – small scale of civil society – rely on state to provide – civil society not encouraged due to political influence
  32. 32. Global Statistics (3) • Middle East – Egypt, Morocco, Pakistan – heavily religious and significant histories of authoritarian rule – little organised civil activity – Jewish or Islamic influence in charity - Diaspora giving clearly evident • Asia and Pacific – Japan and South Korea – civil society small, passive, service oriented and reliant on fees for revenue, prone to government regulation – Mistrust of civil society, mostly family giving, no tax incentives – Thailand – charities must be endorsed by monarchy – Philippines – most dynamic NGO sector in the world, government and business partnering with civil society – NGO certification and self regulation • China – Long tradition of charity and mutual aid within communities, clans and kinships – no giving to strangers – Chinese Communist Youth League biggest civil society – volunteerism on the rise
  33. 33. Global Statistics (4) • Africa – Southern and Eastern Africa (South Africa, Kenya, Tanzania, Uganda, Ghana, Nigeria) – philanthropy robust, engaging many volunteers. Part of everyday life – Civil society small, inefficient and constrained – limited funding – dependent on foreign aid – Large development organisations, tend to be more advocacy and empowerment oriented than traditional charitable service institutions – Philanthropic resources flow predominantly to activities and services that are charitable and that the government should be doing, rather than to address longer term, more intractable and riskier issues – Work of small and medium sized non profits has been seriously denuded as donors shift toward larger and longer-term agreements with a smaller number of larger NGO’s
  34. 34. Trialogue – CSI Handbook 11th Edition R4.1 (b) = 2008 R3.2 (b) = 2007
  35. 35. Hot off the press • Funding increased by 22% – Healthier corporate profits – Better CSI Accounting – 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 – Spending remains concentrated – top 100 companies – 35% 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%)
  36. 36. Determining CSI Budgets • Percentage of post tax profit (42%) • Based on company decision/board approval (22%) • Fixed budget with variable % increase per annum (12%) • Percentage of pre tax profit (10%) • Fixed budget with fixed % increase per annum (5%) • Budget applied for based on existing expenditure (5%) • Percentage of dividends (2%)
  37. 37. What’s New • New Sectoral Classifications – Education – Social & Community Development – Health & HIV/Aids – Entrepreneurship & Job Creation – Training & Skills Development – Environment – Arts & Culture – Food Security & Agriculture – Sports Development – Safety & Security – Non-Sector Specific donations & Grants – Housing & Living Conditions
  38. 38. • Supported by 88% (92%) of all corporates Education • Accounts to 31% (37.6%) of all spent • Down by 4% from 2007 – 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
  39. 39. Social and Community Development • Supported by 78% (75%) of all corporates • Accounts to 16% (10.8%) of all spent • Down by 6% from 2007 (Shift in focus from social development to economic development) – 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
  40. 40. Health & HIV/Aids • Supported by 76% (73%) of all corporates • Accounts to 11% (15.5%) of all spent • Up by 3% from 2007 – 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. Entrepreneurship & Job Creation • Supported by 65% (61%) of all corporates • Accounts to 13% (11.7%) of all spent • Up by 4% & now third most popular area of investment – Entrepreneurial skills development – Supporting existing SMMEs – Infrastructure and facilities – Access to finance and resources – Outsourcing, procurement and sub- contracting
  42. 42. Training and Skills Development • Supported by 62% (56%) of all corporates • Accounts to 7% (11%) of all spent • Down by 4% – Technical and vocational training – Entrepreneurial training – Capacity building for the non profit sector
  43. 43. Food Security & Agriculture • Supported by 31% of corporates • Received 3% of total CSI budget – Food Relief/Feeding Schemes – Survivalist farming - Food Gardens & Permaculture – Small Scale farming – Infrastructure, facilities & equipment – Non-specific general donations
  44. 44. Safety & Security • Supported by 27% (21%) of all corporates • Accounts to 2% (1.6%) of all spent • Up 0.4% from 2007 – 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
  45. 45. Sports Development • Supported by 29% (32%) of all corporates • Accounts to 2% (3%) of all spent • Down by 1% from 2007 – Soccer – Rugby – Basketball & Netball – Cricket – Athletics – Sport for disabled
  46. 46. Arts & Culture • Supported by 32% (24%) of all corporates • Accounts to 2% (2.5%) of all spent • Down 0.5% from 2007 – Performing Arts – Visual arts – Festivals, competitions & awards – Heritage and culture – Craft – Language & literature
  47. 47. Housing & Living Conditions • Supported by 20% (15%) of all corporates • Accounts to 2% (0.9%) of all spent • Up by 1.1% from 2007 – Facilitating housing development – Employee involvement in home building – Material supply – Water & Sanitation – Energy/energy efficiency initiatives
  48. 48. Environment • Supported by 56% (42%) of all corporates • Accounts to 6% (5%) of all spent • Up by 5% from 2007 – Wildlife conservation – Waste management & recycling – Biodiversity, alien clearing – Water conservation, wetlands management – Urban greening
  49. 49. What’s in/What’s Out Sector What’s In What’s Out Why Education 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 directly Training 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 employees Environment Support of conservation projects; Operational compliance Meeting legislated obligations community clean-up projects aspects such as emissions; in SA rehabilitation requirements Job 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 SA Housing Housing programs for the general Employee housing benefits Part of pre-and post 94 community imperatives to benefit employees Arts & Culture Support of developmental Sponsorship of commercial Largely for company and/or programs, development of new events staff benefit talent Health 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 community Sport Support of developmental programs Sponsorship of commercial Primarily promotion of events or professional teams company brand rather than direct impact on sports development
  50. 50. CSI Reputations SA 2008 Trialogue Research CSI Handbook – 11th Edition
  51. 51. Rated the best Excellence in CSI Corporates NGOs Absa Anglo American Anglo American Absa Nedbank First Rand Group SAB Nedbank Sasol Standard Bank Telkom De Beers First Rand Group Sasol Old Mutual Old Mutual Standard Bank SAB Vodacom Pick & Pay Investec Telkom Outsurance Vodacom BHP Billiton Woolworths Pick & Pay BAT
  52. 52. Rated most engaged Corporates NGOs Absa Absa Anglo American Anglo American SAB Standard Bank Sasol First Rand Group Outsurance Vodacom First Rand Group Sasol Vodacom Nedbank Pick & Pay AngloGold Ashanti Telkom Old Mutual Old Mutual Pick & Pay Nedbank SAB Eskom
  53. 53. Rated for highest employee involvement Corporates NGOs Absa Absa First Rand Group First Rand Group Outsurance Outsurance Old Mutual Nedbank Pick & Pay Pick & Pay Nedbank Old Mutual Vodacom Standard Bank BP Cell C Discovery Sasol SAB Vodacom Deloitte Standard Bank
  54. 54. Sector Results Sector Corporates NGOs Financial Absa Absa Nedbank First Rand Group First Rand Group Standard Bank State Owned Enterprises Telkom Telkom Eskom Eskom Transnet Transnet Mining Anglo American Anglo American De Beers De Beers BHP Billiton AngloGold Ashanti Oil Sasol Sasol BP BP Shell Engen ICT & Telecom Vodacom Vodacom MTN MTN Telkom Cell C Pharmaceutical & Health Discovery Dis-Chem Johnson & Johnson Adcock Ingram Nedcare Discovery
  55. 55. Sector Results Continue Retail & Wholesale Pick & Pay Pick & Pay Woolworths Woolworths Edcon Shoprite Checkers Motor Vehicle Toyota Toyota Mercedes Benz Volkswagen Volkswagen Mercedes Benz Media & Entertainment SABC SABC Primedia Media24 Media24 Primedia Agriculture & Forestry Sappi Sappi Mondi Mondi AgriSA Illovo Sugar Building & Construction Murray & Roberts Murray & Roberts Group 5 Group 5 Grinaker-LTA PPC Food & Beverage SAB Coca Cola Coca Cola SAB ABI Pick & Pay
  56. 56. State of Giving South Africa
  57. 57. Giving is big business* • Listed Companies – R4.2 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 billion per annum • NGC estimation = CSI in SA is a R35 billion industry and not R4 billion *NGC own research
  58. 58. Individual Giving • 45% of the South African population gives directly • 54% give money • 3% give food • 17% give time • Gauteng (wealthiest province) gives less than Eastern Cape (poorest province) • Men give more money, Women give more time • Children are the leading recipients – 22% of total giving, HIV/Aids 21%, ‘the poor’ – 20%, disabled (8%) and elderly (5%) *CDE & HSRC study - 2002
  59. 59. Other Contributors – SMEs* • SMEs – employing less than 100 employees contribute approximately R1 billion overall to CSI in South Africa – 1% PPAT • Investments include – outsourcing to emerging businesses, partnerships/investments in empowerment ventures, secondment and executive time spent on development, staff benefits, tax contributions, training • Grants, products and donations • Mostly reactive – when approached for funding/support • Main supporter of local charitable organisations * Next Generation own research, supported by South African Foundation and Center for Development and Enterprise (CDE)
  60. 60. Reported Budgets 2008 - m Absa R60.9 Barloworld R16 Harmony R20.1 Acsa R7.5 BHP Biliton R115 HCI Foundation R37 Advtech R33.4 Bidvest R38.5 Impala Platinum R31.8 African Bank R6.2 British American Tobacco R30 Imperial Holdings R11 African Rainbow Minerals R7.5 De Beers R32.5 Investec R23.8 Afrox R6 Discovery R5.7 Liberty R20 Altech/Altron R17.5 Eskom Foundation R74.7 Lonmin R21 Anglo American R70 First Rand Group R96.8 Massmart Holdings R11 Anglo Platinum R126 Foshini Group R4.3 MTN SA Foundation R74 AngloGold Ashanti R14.1 Gold Fields R15 Murray & Roberts R10 ArcelorMittal R57 Grindrod R1.35 Nampak R7.6 Aveng R15.6 Group 5 R2.7 Nedbank R30 Netcare R37 Rainbow R1.6 Transnet Foundation R60 New Clicks Holdings R0.4 Sanlam R13.8 Truworths R28 Northam Platinum R3.2 Santam R5 Vodacom R65 Oceana Group R4.1 Sappi R16.3 Woolworths R25.6 Old Mutual R32 Sasol R50 Unilever R12.3 Palabora Foundation R25.9 Spar Group R17 Tongaat Hullet R15.7 PetroSA R44.8 Spier R7.9 Standard Bank R66 Pick & Pay R46 Telkom Foundation R51.1 Sun International R20.4 Pioneer Foods R5 Tiger Brands R25 PPC Cement R10 Primedia R53.7
  61. 61. Non Spenders Multinationals Nokia, Samsung, Erickson, Siemens L’Oreal, Revlon, Unilever, Proctor & Gamble KFC, MacDonalds, Cadbury’s, Nestle, Visa, Mastercard, American Express British Airways, British Telecom Nationals Mugg & Bean, Distell, Nando’s, BEE Companies – Rainbow and Mvelephanda, Wiphold Industries Media, Property, Services Finance – Asset Management/Investment Medical, Automotive Advertising, Hotels (Protea, City Lodge Direct Selling/Marketing – Amway, etc Sectors Retail - Pep, Ackermans, Spar Pharma – Novartis, Johnson & Johnson, Pfizer, Adcock, Aspen Oil/Petroleum – Shell, Total, BP, Engen State Owned Enterprises National Ports Authorities, Armscor, SAA
  62. 62. 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% • SO, how much is going to development work?
  63. 63. 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
  64. 64. Interesting Finding • Total Aid in 2006 in m US Dollars – 700 hundred million USD • Ten biggest donors in 2006 – 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
  65. 65. Foreign Development Aid • SA receives around 1/3 of global aid, or around US$23 billion • USAID – US$83 million • Danida, Cida, AUSAID, DFID - R2.7 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). • This is due to capacity problems. More specifically delayed requests for funding, unrealistic time frames, incomplete and inaccurate financial statements and non compliance.
  66. 66. Sectoral Focus of Donors Donor Sector European Union Water, LED, Education USAID Education, democracy and governance, health, environment, economic capacity, employment Norway Democracy, higher education, research, environment, natural resources and energy Sweden Education, private sector, cultural sector, urban sector, research, HIV/AIDS, capacity building Netherlands Justice, youth, education and local government Denmark Private Sector Development, HIV/Aids, environment
  67. 67. 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.
  68. 68. 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 Women's Entrepreneur Network • Umsobomvu Youth Fund • National Empowerment Fund • Local Economic Development Fund • uTshani Fund
  69. 69. Public-Private-Partnerships • National Business Initiative • Business Against Crime • Business Trust • Joint Education Trust
  70. 70. Concerns • Based on the trends: Have we forgot about? – The impact of government: The role and responsibility of government: • If government is spending R90 billion on social grants – what is the impact thereof on our spent? Do people still need feeding schemes? • If government is focusing on ECD? Do ECD still require private sector’s funding? • If government is no longer focusing on HIV/Aids, are paying teachers more, are providing free education – does education still need our funding? Similarly housing? • If we are recruiting social workers / NGO workers as CSI practitioners – are we not contributing to the problem of shortage of skills and funding patterns that now become distorted? • If we have become a development state – and government is focusing on social welfare – have our roles changed? • Surely poverty alleviation should be the cornerstone of development? Are we achieving this?
  71. 71. Trends in Grantmaking
  72. 72. 2 Perspectives • Emerging Trends – • Steadfast Trends – linked to economic monitored over a crises period of time – 5 years/top 20 most influencing trends for the industry overall
  73. 73. 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 CSR/Sustainability divisions – Focus on Enterprise Development and Environmental Impact • Specific industry changes – Automotive/Mining/Manufacturing industries in decline, declining budgets
  74. 74. Impacts • Co-operation is no longer a competitive factor – 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
  75. 75. 2nd Perspective Trends driving innovation INNOVATION – Is innovation possible in a socio economic development context? Is it fair to expect innovation? How will we know our solution is innovative? How will we measure INNOVATION? IMPACT? SUSTAINABILITY? RETURN ON INVESTMENT? Is it time for “back to basics” or radical innovation?
  76. 76. 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
  77. 77. Trend 1 – Social Entrepreneurship • The rise of social • Practitioners not ready entrepreneurship – Current grantmaking criteria – Mohammad Yunus does not allow flexibility • Social entrepreneurs – Cannot fund for-profits – Charles Maisel – Don’t fund individuals – Tamzin Ractliff – Fund only specific focus areas notwithstanding real needs • Social Enterprises – Risk adverse – Grameen Bank – Lack entrepreneurial • Social Venture Capital understanding & insight – Sasix – One size fits all approach to – Greater Good grantmaking • Social Collaboration – Discriminate against – Grow South Africa profitability – Don’t really understand sustainability Best Practice in SA – Sasix – Able to raise and distribute R18-m in 36 mths
  78. 78. Trend 2 – Commercialisation of CSI • The fortune at the Bottom • Driven by business of the Pyramid benefits and future profits • Products for poor people • Increased impact & • Making markets work for awareness of the poor sustainability and • The next 4 billion interconnectedness • Bringing together the 1st • Search for double/triple and 2nd economies bottom line benefits – Financial vs Social Returns • Cause Related Marketing – Financial vs Social vs • Flagship Programs Environmental Impact • Elusive sustainability Best 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
  79. 79. 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 • Driving pressure to work measure • The good, the bad and • Reporting becomes big the ugly • New strategies/new – Good - everyone now gives budgets/new focus – Bad – once spent 1% areas/new reporting lines NPAT – stop • Shifts in development – – Ugly – Reducing budgets new flavours of the month • Points drive investments Best Practice in South Africa – Enterprise Development – Investec Business Place – More than 100 new businesses
  80. 80. Trend 4 – The rise of stakeholder engagement & activism • Product and market • Ring fencing CSI – The stewardship popularity of foundations • Governance and ethics • Responsibility, • Human rights and equity Transparency and • Risk vs reputation Accountability • Giving vs getting • Give or else – mentality • Food vs fuel • Communities are becoming aware • Humanities vs Humanitarians • Issues and reputation become obstacles to giving Best Practice in SA – British American Tobacco – South African Breweries, Anglo American – Sustainability Reports
  81. 81. 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 don’t have • Strategic intent requires enough influence knowledge • Practitioners rely on others and their performance are influenced by issues outside their control Best 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, buying poles from local communities to provide income opportunities - Focus on environment – carbon trading & energy saving bulbs – 1m people 18 months
  82. 82. Trend 6 – Bigger, better models of development • Marketing is important • War on ideas • Communication (PR) is • Piecemeal approaches will important not work • Integration and alignment • Effective social change is important requires • Proving impact and return – long-term commitment is important – willingness to take risks • It just makes so much – the ability to work sense across sectors and • It becomes the new heart silos and sole of our marketing – investments in strategic campaigns research and policy analysis Best Practice in Kenya – CFW – Franchised Health Care 50c for primary health care, 4000 nurses earning $4000 py
  83. 83. Trend 7 – Green is the new black • Environmental impact is • All companies are adding driven by global agendas environmental projects to • Until now we only the funding mix focused on social impact • An idea whose time has • Agriculture/Food come Security/Green Farming/ • The raise of ethical Organic Farming/urban trading and sourcing, fair renewal and greening – trade, green trade, eco the latest CSI trade phenomenon Best Practice in SA – Woolworths – Good Food Journey Enterprise Development and Procurement, recycling targets
  84. 84. Trend 8 – Put away the gloves • Tipping points • Serious questions – Absence of Market – What have we changed Standards – What have we contributed – Lack of Proven “Return on – What is our impact Investment” – What was the return on – Market Fragmentation investment yielded – Grant Making in Isolation – What access do we have to – Insufficient Resources Knowledge – Various Investors, Various – What is our Code of Conduct Instruments – Where are the Industry – Tension between forums & collaboration competitiveness, Cost of – What about the Capital and Community/ underdeveloped Concepts government Regarding the Meaning of needs/wants/expectations “Going to Scale” – Market “Insiders” versus Market “Outsiders” Best Practice – Rift Valley – Ghana – Market Hype Versus Vision Flowers, Tea, Coffee, Vegetables Grounded in Practice From less than $1 a day to $3500 py
  85. 85. Trend 9 – Follow the money • R30 billion + per annum • New rules of engagement must yield results – Support organisations not • Donors operate programmes independent of each – Use influence not just other money • Donor motivation varies – Experiment and pilot greatly within the market – Redefine the spheres of • Metrics to assist in activity identifying effective – Influence public policy organisations are largely – Cross the borders lacking – Consider politically incorrect investment • Information systems to opportunities to fast track track effectiveness are skills, job creation and lacking poverty alleviation Best Practice in South Africa – SOE in SA – Escom, Telkom, Transnet, NDA etc – more than R1b in 2007
  86. 86. 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 much we spent) and activities implementing it doesn’t kill (what we do) and not impact your organization first (over time) and we report on • What is good for them might this be bad for you • Creating a Culture of Learning – Learn from evaluations • Great people and companies – Learn from communities succeed despite rather than – Learn with and from grantees because of some practices – Learn with and from other funders • Don’t believe your own – Learn from academic institutions brochures, PR Materials and – Learn from professionals Annual Reports – Learning from other types of information intermediaries Best Practice - Safaricom Keyna - renewable energy, recycling of handsets, providing jobs for physically challenged - Measuring impact on market – labor market, rural development, government, development sector and other corporates
  87. 87. CSI and the Development Sector
  88. 88. NGO’s - SA Industry • SA Non Profit Sector – 100 000 NGO’s, NPO’s, CBO’s – 60 000 are registered – 750 000 people employed in industry – 1.25% to GDP – 70% - Women – Funding – 40% Government, 30 % Service Fees & sale of products, 20% Companies, 10% International Organisations • 1.5 million volunteers whose labour is valued at R5.1 billion p.a. • R14 billion invested in this sector • 34% (R4.7b) is self generated – very sustainable *Graduate school of public development management, Wits 2002
  89. 89. NGO Issues with corporate funders* • Lack of information on focus areas, budgets and strategies • Delays in disbursements • Donor driven priorities and systems • Uncoordinated donor practices • Short term focus • Uncertainty about and lack of standard performance metrics and diagnostic tools • Uncertainty about roles and responsibilities • Centralised and de-centralised decision-making • Knowledge about development issues • Inflexible strategies – share in development know how, best practice, development models, research • Help with capacity building, operational and infrastructure costs *Next Generation Research amongst clients
  90. 90. NGO suggestions for best practice • Share information and research • Standardise and simplify procedures • Be transparent – communicate and provide information • Consider multi-year funding commitments • Use common/transparent performance indicators • Clear rules for grantmaking or suspension • Reduce unnecessary admin burdens • Consider operational funds and assistance
  91. 91. Best Practice • When funding specific projects, funders should presumptively pay the full, actual costs incurred by the organisation, including the fair proportion of administrative and fundraising costs necessary to manage and sustain whatever is required by the organisation to run that particular project. – Core support, or general operating support, is funding directed to an organisation's operations as a whole rather than to particular projects (project support). – If an organisation has separate programs, departments, or divisions (for example, schools within a university), support for a particular program, or program support, is tantamount to core support. Core support may be used not only for the delivery of services or other activities directly in pursuit of the organization's mission, but also for administrative and fundraising expenses (overhead). – Administrative expenses, also known as management & general expenses, are costs associated with sustaining the operations of a nonprofit organisation. – Fundraising expenses are costs incurred in raising contributions. Administrative and fundraising expenses constitute an organisation's overhead.
  92. 92. Strategic CSI
  93. 93. What is strategic philanthropy/grantmaking? • Strategy is – a carefully devised plan of action to achieve a goal, or the art of developing or carrying out such a plan – In evolutionary theory, a behaviour, structure or other adaptation that improves viability • By strategic philanthropy we mean effective giving which is designed around focused research, creative planning, careful execution and thorough follow-up in order to achieve the intended results. To be truly effective and rewarding, strategic philanthropy must also reflect and be driven by your core values and concerns – (The Philanthropic Initiative Inc) • Traditional giving helps one person at a time by providing charity for immediate short term needs. Strategic giving focuses on change and builds for the future – (Liberty Hill Foundation) • Strategic philanthropy describes practices through which companies align charitable activities such as donations and volunteerism with a social issue or cause that supports their business objectives. Thinking about giving strategically (financially, through in-kind donations, and with volunteers) means considering the value added to your business through philanthropic initiatives - (Center for Corporate Citizenship)
  94. 94. Continue • Strategic philanthropy refers both to the working philosophy and the program strategies. It originates from an entrepreneurial view of development activities which focuses around strategy, key competencies and striving for effective contributions to social change. Strategic philanthropy as understood in this view involves institutions that are driven by: – A vision of the desirable society of the future – A distinct value orientation in their activities – A concept of social change to the effect of greater social justice rather than mere grantmaking to address social problems – The conviction that grantmakers serve as laboratories to develop model solutions, new ways of thinking, and new understanding for resolving societal problems – The awareness that innovative models and approaches should include both blueprints and a focus on practical implementation and applicability – A concern for the effectiveness of their philanthropic endeavours – A proactive approach, be it in their own activities, be it in partnering or grantmaking – An awareness for capacity building and organisational learning among grantees/partners – A public policy orientation driven by the potential of taking project results to scale on policy levels – The insight that philanthropy provides for investment in the production of public goods, preferably aiming at innovations or increased effectiveness – (International Network on Strategic Philanthropy)
  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 in the country • A strategy that is so broad it encourages innovation and creativity in its application and interpretation • A strategy that so innovative and creative that it becomes a competitive differentiator for the company • A strategy that draws on all the core competencies and resources of the company • A strategy that is easy to understand, execute, communicate, monitor and evaluate • A strategy that will encourage and ensure employees’ involvement and support • A strategy so comprehensive that it will guarantee board, senior management and business unit commitment • A strategy that is so wide in its interpretation, that all operational business units and regional units have the freedom to support not only their own brand philosophy but also their business objectives • A strategy that focus on areas that correlate societal challenges with business challenges • A strategy that is still neatly boxed and clearly defined
  97. 97. Process Guidelines • Slowly gain CSI experience and expertise without compromising the basic core development principals • Have full control over the process of development and investment • Ensure that CSI efforts do not get confused with marketing, sponsorship or any other business development environments • An approach that will allow business units enough flexibility and one that is not hampered by a strict policy and outdated strategy • An approach that is so simple that all staff could identify with it and contribute according to their own personal preferences • Whatever strategy is chosen, it has to support the company, its operational divisions and business units, brand values, as well as the strategic values, objectives and vision of the company
  98. 98. 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 research and agencies most appropriate to support – (proactive awareness) • Advise communities on project planning and implementation – 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
  99. 99. Strategic Considerations • Following an inclusive process that allows all internal stakeholders to contribute any resources at their disposal to become involved in the CSI strategy • Following a proactive approach that encourages communities to interact with the organisation in a deeper and more meaningful way • Allowing for freedom of choice and innovation • Ensuring the involvement of employees in the process of Corporate Social Investment and Development • Ensuring 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 • To allow communities to share their needs and requirements rather than impose interventions on such communities • An approach that supports political, economic and social change and leaves a legacy of empowerment for the people of the country
  100. 100. CSI Practitioners – Roles and Responsibilities • Build and maintain relationships with key stakeholders • Develop the business case for CSI within the organisation • Get top management to understand the benefits of CSI • Understand the nature of development • Promote the grantmakers involvement in sustainable projects • 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
  101. 101. Management skills required • Technical Skills – solid business & grantmaking skills, project management, financial and administrative skills • Developmental Skills – Understand political context and development terrain, familiar with the process of development • Relational Skills – Understand different paradigms, engage with different stakeholders • Ability to… – Review proposals – with understanding and knowledge – Analyse the effectiveness of organisations – Read, understand and interpret financial statements – Structure evaluations / research capability – Cross boundaries and mixing worlds – Industry experience & knowledge – Strategic skills and business acumen – Development (specialist/sector knowledge) • Motivating belief – core values and belief in development • Cognitive skills – sifting information, translating different contexts, staying grounded, seeing patterns, synthesizing, flexibility • Interpersonal competence – patience and insight • Leadership skills • Sense of journey
  102. 102. Categories of CSI Practitioners Type Characteristics Strengths Weaknesses The 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 practice The 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 investment The Problem Solver Often comes into CSI as a Has the experience and May end up alienating others The 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 matter The 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 company The Purist Been there They have the knowledge Know everything The Professional CSI Done that and the experience. My model/project/legacy Practitioner 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
  103. 103. Towards the Future
  104. 104. • It's more ambitious: Today's grantmakers are tackling giant The Future of Giving issues, from remaking African education to curing cancer. • It's 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. • It's more global: Just as business doesn't 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
  105. 105. 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 Social Responsibility agenda • More requests from nonprofit organizations, 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
  106. 106. Challenges for 2009 • 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 – organizations 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 organizations, alumni giving and global disease/pandemics. • Asia is receiving the bulk of the attention as companies devote more resources to giving abroad, with particular attention devoted to China. There is much less interest in Africa. • The top three management priorities are the relationship to the broader corporate citizenship agenda, measurement of results and outcomes 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
  107. 107. 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
  108. 108. Carrots & Sticks • Are we paying lip service • 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
  109. 109. 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
  110. 110. Corporate Social Investment is all about choices: the choice to give, the choice of how to give and who to give it to, even the choice of when to declare victory or admit failure.
  111. 111. Possible Scenarios • The Pressure for Accountability – The Donor in the Driver’s Seat. What if donors decided the best way to be accountable was to stop making grants and just start their own programs? – Mutualismo, not Filantropía. What if community foundations changed their structure to become even more responsive and accountable to the needs of their communities? – The Decline of the Foundation. What if the unintended consequence of new pressures is the deprofessionalization of philanthropy? • The Demand for Effectiveness – Funding to the Test. What if the current boom of interest in measurement and metrics went too far? – Shaking Your Assets. What if grantmakers began to use their entire endowments to promote social change, rather than just the five percent of assets they annually give as grants? – Joint Venture Philanthropy. What if funders and nonprofits coordinated their efforts to create integrated strategic responses to specific challenges? • The Need for Infrastructure – Googling Giving. What if a comprehensive technological infrastructure put accessible information about giving at the fingertips of every donor? – Will You Be My Fundster? What if new networking technologies allowed people to easily link to others who share specific philanthropic interests? – The New Power Brokers. What if people began to make their charitable investments through managed philanthropic portfolios that worked much like mutual funds? – The future of Philanthropy.org
  112. 112. Contact • Reana Rossouw • Next Generation Consultants • Specialists in Corporate Responsibility and Social Investment and Development • Tel & Fax: (021) 9766291 • E-mail: rrossouw@nextgeneration.co.za • Web: www.nextgeneration.co.za