How Some Corporates In South Africa Have Single Handedly Created CSI Genocide

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As host of Funders’ Round and Chief Editor of CSRNEWSSA, I have spoken with CSI managers who manage some of the most impressive and ground-breaking organisations in South Africa. Close conversations at our 2018 Funders’ Round 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, 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 ‘groundbreaking’ foundations are breaking nothing but the law. 

Some CSI managers have actually started their own foundations, plumping them up with funds from the corporates where they worked. In this way, the small portion of corporate profits intended by legislation for the rural poor, for schools, for environmental and community projects circulates in the same small pool, controlled and dispersed by a handful of people.

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 in 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 ZAR350 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 does as it pleases. This is why some are closing down their CSI, 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. 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. 

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.

Simphiwe Mtetwa
Simphiwe Mtetwa is the Managing Director and Editor-In-Chief for Corporate Social Responsibility News South Africa.

2 Comments

  • Susan Daly says:

    Yes, yes, yes. Well done. I never fully understand why Companies who know business, decide they know better than embedded NGO’s who are on the ground in communities and then start their own foundations. I would love to see more discussions and partnerships about why a Company chooses this route “claiming that NGOs are too resource-less, too dependent and a bottomless pit”. I would imagine their own Foundations become fully dependent and reliant on the parent company for all resources and remain ‘a bottomless pit’ too. Rather – look at what social problems are being addressed and recognize that developmental work takes many many years to see sustained change. That’s not a bottomless pit.

    • CSR NEWSSA says:

      Susan as always, we truly appreciate your contribution to this industry and space. You are the reason we continue to do what we do. We will certainly look at starting these types of conversations in the space.

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