The Business Case for More Innovative Corporate Social Investments in South Africa

August 12, 2015Michelle Matthews

“It is not a lack of resources that holds back change in schools; it is a lack of imagination,” wrote University of Free State Vice-Chancellor and well-know education commentator Jonathan Jansen in the foreword of the 14th edition of The Trialogue CSI Handbook. “Business” he urges, “use your drive for excellence and innovation to help turn education around.”

In South Africa, corporate philanthropy is commonly called corporate social investment (CSI). The ‘social investment’ moniker reflects some unique realities about the South African development situation: there is an understanding that the need is vast and corporate spending, despite being less than 1% of government spending on social issues (approximately R744 billion in 2014), can make a meaningful difference, if done strategically.

How companies currently invest in education

Trialogue, a 20-year-old CSI consultancy, estimated South Africa’s total CSI spent in 2014 at R8.2 billion. Trialogue’s primary research with 100 South African companies suggests that half (49%) of this budget is directed to education initiatives.

Over half (52%) of these education initiative budgets are invested at the FET (grades 10 – 12) and tertiary level. When the CSI education spending is analysed by type of intervention, it reveals that nearly a quarter of the spending (24%) is going to bursaries and scholarships. And when companies are asked what proportion of their budgets they dedicate by subject area, 35% of allocations are directed to maths and science (compared with 12% to language and literacy).

A significant amount of the CSI spending in education is going to sector-specific bursaries (e.g. Mondi will fund forestry students, Discovery will support medical students, etc.), and maths and science initiatives that aim to increase the pass rate and performance of learners writing matric STEM subjects. Whether these types of initiatives help to address core issues in the South African education system is a topic that is hotly debated in CSI. While bursaries and supplementary programmes are necessary and welcome interventions for individuals with promise, they do not address systemic problems: but then, is it the role of corporate funders to tackle these problems?

A weak education system is not good for business

The ‘why’ of CSI gives insights into why innovation is not more prevalent in corporate philanthropy: Some of the strongest drivers are regulatory or reputational, rather than strategic or purpose-driven. In Trialogue’s 2014 research, 85% of respondents cited ‘moral imperative’ as a motive for giving, followed by ‘reputation’ (65%) and the ‘dti’s BBBEE Codes’ (46%).

However, as Prof. Jansen has noted, when a business is faced with a threat to its fundamental model, it can often come up with creative and effective solutions. Skills shortages are a serious competitive constraint for individual South African companies, and unemployable school leavers result in a stagnating economy, impacting all businesses. Giving young South Africans access to a meaningful education is a business issue – insightful leaders such as First Rand CEO Sizwe Nxasana, who founded the National Education Collaboration Trust, recognise this.

Corporate social investors are more likely to foster new and interesting approaches by aligning initiatives closer to their core business, building on their company’s strengths. When a company leverages its existing infrastructure, supply chains and skills to address a relevant social issue, it unlocks resources that can make a significant impact on the problem. 

At the same time, to be considered more than ‘commercial grantmaking’, CSI projects need to aim for maximum beneficial social impact, which means working closely with partners in the community and civil society who know how to move beyond outputs to making change happen. Companies must acknowledge the strengths of their development partners and contribute intellectual, financial and other resources in a productive and collaborative way, to create joint ventures for social change.

With a bit of imagination, corporate social investment can drive innovation in the South African education sector.

Michelle Matthews is the Innovation Programme Manager at Cape Innovation and Technology Initiative (CiTi).

Photo Credit: MRP Foundation

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