Is your NGO or NPO in trouble or closing down?


How corporates have singlehandedly created CSI genocide in South Africa

As host of Funders’ Round, I have spoken with CSI managers who manage some of the most impressive and ground-breaking CSI budgets in South Africa.  Close conversations over the last year reveal a reality I have long sensed; that our country’s corporates have effectively gotten away with CSI genocide.

South Africa is one of a handful of countries in Africa that legislates CSI.  CSI forms part of the gazetted BBBEE Code of Good Practice and, in addition, the Johannesburg Stock Exchange has made a certain standard of CSI practice an imperative for BBBEE compliance. But is business towing the line?

I listened to SAFM the other day as Bonang Mohale, CEO of Business Leadership SA, spoke about the state of business in South Africa.  Business Leadership SA has strong ties with 53 CEOs, of whom 30 or 35 are personally responsible for the bulk of South Africa’s GDP.

And yet, as I discovered in talking to some of their CSI managers, few of these powerhouses see CSI as a vital component of what they do. WBHO’s CSI manager works half-day, PPC Cement is in the process of closing down their CSI division, and many others give vague and incomplete answers when questioned about their CSI activities. They actually seem lost on this topic and refer me to their HR departments. It got me thinking:  Why are those at the helm of our strongest companies so out of touch with CSI?

Ground breakers breaking the law

The new trend is for corporates to start their own foundations in a bid to stop giving funds to NGOs, claiming that NGOs are too resource-less, too dependent and a bottomless pit. In reality, siphoning money to a company’s own foundation enables the company to enrich itself; money channeled in this way can easily be reclaimed. These ‘ground breaking’ foundations are breaking nothing but the law.

Some CSI managers are simply unscrupulous  – there is no other word for it. They are CSI managers in name only, and part of the scourge of corruption that has swept our country. On fairly modest salaries, they live the kinds of lifestyles that only massive cash injections make possible. Many have registered foundations or NGOs that exist on paper only. Funds intended for the poor pour into their accounts, and you find these people buying ever bigger homes, bigger cars, fancier educations for their children – on embezzled money. Corruption in our country is pervasive, and not confined to government employees.

All of this happens against a backdrop of NGOs and NPOs in crisis. Honest, experienced and long-serving NGOs and NPOs are struggling to keep their doors open. These are the people who have served communities for years – who know the people, are in touch with the needs, and have made a tangible difference.

Chances are that if you ask NGOs and NPOs where they see themselves five years from now, 50% to 80% will say they don’t see themselves in existence at all. That this should be the case is tragic – we’re losing good people and strong organisations because they simply have no funding to continue.

It’s time to look closer

Well-run NGOs and NPOs are vital to the health of communities yet face closure due to the drying up of funds. In response, CSRNEWSSA is launching an investigative department to probe organisations that evade compliance with the law with regard to CSI.  If corporates simply refuse to cooperate with what was legislated for the greater good of our country, what hope have we?

Some time ago I sat down with members of the BBBEE Commission in a bid to foster a partnership – one that will begin to challenge organisations that claim to comply with CSI legislation, yet do not.  We’re taking this on because we believe that NGOs and NPOs form a vital component of South Africa’s development and form, in effect, an extension of government’s work.  Without the contributions of NGOs and NPOs, South Africa is so much the poorer, yet by choosing the routes they do, our corporates are cutting off their lifeblood and starving them out of existence.

What is CSI?

Many corporates don’t really grasp what CSI is and the vital roles it plays.

Later this month we’ll be hosting discussions with ten to fifteen CSI managers to thrash out the questions essential to the health of the CSI sector.  We’ll be asking, ‘What is CSI in the South African context? Where does it fit in, and why is it so vital?’ In the past, we’ve asked this of CSI managers who manage funds ranging from ZAR45 million to ZAR180 million, and each has a different answer.

Because we have never defined an industry standard for CSI, we have no common understanding from which to work, and each company pretty much does as it pleases. This is why some are closing down their CSI divisions, some are channeling money back to themselves through their own ‘foundations’, and some claim to be ‘fully committed’, with funds tied up in three-year strategies, not allowing any organisations to tender for funding. Yet the next thing you hear, those who headed the three-year strategies have left for greener pastures and are heading new CSI departments in other companies, without having made so much as a dent with the funds at their disposal in the last job.

And this is why our NGOs and NPOs continue to scrape and scramble and face immanent closure. We need to understand that CSI work is not optional. It is a legal requirement, and within those parameters, CSI managers have the power to make life and death decisions for our crucial NGOs and NPOs.

I am excited about my new role as National Director for the SA CSI Council – another avenue through which we intend to ensure that corporates hold to their legal CSI obligations. We aim to see that CSI – and by extension our much-needed NGOs and NPOs – receive the shot in the arm they so direly need.

Leave A Reply

Your email address will not be published.