When CSI is the tipping point

If you imagine that CSI can transform SA, then you’re doing it wrong…

  • By Paul Pereira

Corporate social investment (CSI) is essentially a voluntary tax that is self-imposed by business and encouraged through state tender award incentives by government. The major exceptions to that are the mining and Independent Power Producer industries that are compelled by operating licence conditions to undertake social investments – especially in the communities where they operate or from where mines attract employees.

CSI is but one strand of a strong South African tradition of voluntary upliftment work in local communities, good giving to charity and philanthropy of the sort typically found in “frontier” or emerging societies that have a “can do” spirit.

But when seen in the big pond of taxpayers spending through government investments in social development, then CSI is a small fish indeed. So the combined 2015/16 national and provincial budget stood at just over R1,3 trillion against which Trialogue estimates that about R8 billion was spent on CSI last year.

Of this spend, almost half went to projects linked to education ­– the development sector that nine-out-of-ten companies that have CSI programmes include among their beneficiaries. That meant about R4bn in 2015, in comparison to the state’s education budget of ­R270bn.

And, while slow economic growth and high spending commitments mean that government is looking for ways to raise revenue and keep down costs just to keep pace with existing commitments, so too is the private sector where CSI spending by our biggest companies is reducing for the first time in almost 20 years.

But if CSI spending is so small compared to public spending, why then is it so important to government and why the emphasis on encouraging it?

The answers lie mainly in our historical legacies and partly in SA’s “best constitution in the world”. Where countries include human rights in their constitutions, they almost only ever entrench protections for things like open assembly, against torture, and the like – in other words, protections against the state. Uniquely, SA went further and gives equal weight to rights “to access” in things like education, healthcare, and housing. Our government doesn’t have to provide them all, but its policies must make these things perpetually improve, says the Constitutional Court.

That, combined with the constitution’s demand for equality of opportunity, means government playing catch-up right across the country in pulling access to facilities to sameness.  It’s a long haul process with many variables. Thus, back in education, it has meant combining 15 separate and often very different departments and often curricula into one thing, and it’s expensive and difficult, with legacies remaining.

Government’s obligation to equality puts our better performing schools and other institutions at risk because it hardly has room to fund them adequately, never mind strengthen these often fragile institutions. Here, especially, the private sector’s CSI top-up becomes critical given that it can be used flexibly and is often the tipping point between growing success or failure for the country’s centres of excellence.

One example is the funding of the SA National Youth Orchestra in its excellent standards of training across all provinces. Yet another comes in CSI help for the African Children’s Feeding Scheme that includes children of illegal immigrants, excluded from state schemes, and whereby 32 000 children receive basic nourishment daily in Gauteng.

Taking a load off the state and multiplying the reach and innovation of social development, is found through CSI funding of Nation Builder associated projects such as Vasfontein’s youth centre near Hammanskraal, PEN’s Pretoria inner-city work, or in the orphan-care work of Durban’s Liv Village.

This flexibility of CSI, sometimes in matched-funding arrangements with government – affects private welfare organisations, schools, arts institutions, lifeskills programmes, and pretty everything else. It takes a load off taxpayer shoulders in ways that, cleverly done, are exponentially beneficial. It is the difference between us creating an East Germany of sameness, and a vibrant place where “a thousand flowers bloom”.

  • WHAM! Media advises the Muthobi Foundation’s Nation Builder programme (proudnationbuilder.co.za). This article was published in the Pretoria News on 20 July 2016.

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