Updated: Jun 19
The most topical matter or agenda item dominating the world today is the impact of global warming, threatening the survival of humanity for the next 100 years.
In the US, some lawmakers are still debating whether global warming is an issue and whether it deserves the attention and the investments towards curbing the impact and implications of its existence. The world has also noticed the rise a young unassuming voice of reason. Greta Thunberg has been reprimanding global leaders about their lack of action to help stem the tide and reverse further deterioration of the planet; they hear what she says, but not listening, according to her recent remarks at the World Economic Forum, Davos, January 2020. Time Magazine has named her Person of the Year, acknowledging her significant contribution towards the global warming efforts and awareness.
Big manufacturing businesses are realising the increased pressures with regards to their production practices and the impact it has on the environment. Instead of investing in traditional CSI projects their focus have shifted towards CSR practices to help minimise the impact their operations have on the environment. Resulting in their investments to be more industry related and focused.
The global warming appeal has also led to more non-profit organisations taking up the call; there is also an increase in activism and mass demonstrations to highlight the plight of the planet today. According to 2019 Trilogue CSI handbook, investments towards the environment has also increased in South Africa by 5%. This is an indication of how the global focus on the environment and efforts to save the planet.
In the South African and African context we have noticed that CSR has become almost on par with sponsorships. Corporates today approach their investments strategically, bordering on commercial gain. They are encouraging consumers to purchase products and a percentage of the profits derived from the sales are channelled towards upliftment projects. These campaigns require a Marketing budget to produce the material, a Media budget to reach the consumer and a PR budget to achieve mentions and presence in the mainstream media.
Which triggers the questions whether CSR/CSI is becoming a modern day version of sponsorship? The global economy is bleeding by the day and it is understandable that businesses need to do more with less money. Ultimately, the investments towards genuine grass roots development are dwindling.
Below are a summary verbatim from the 2019 Trilogue CSI Handbook on the spend by corporates towards CSI.
Companies in SA spent R10.2 billion on corporate social investment in 2019
Companies spent an estimated R10.2 billion on corporate social investment (CSI) in South Africa in 2019 – a 5% year-on-year increase in rand terms (2018: R9.7 billion). This growth was flat when taking inflation into account, reflecting a subdued economy. This, according to findings from the 22nd edition of the annual Trialogue Business in Society Handbook which was launched in Johannesburg today (27 November 2019).
According to the results fewer companies have been reporting on the CSI interventions. It is probably due to the pressures on budgets and their less than normal support for worthy causes. The retail and wholesale sectors have been leading the CSI investment in 2019; amounting to 22% of the total spend. They were followed by Mining and the Financial Services sectors. These three sectors combined contributed towards 57% of the total CSI spend in 2019. The publication also mentions that CSI spend grew on by 5% from the previous year in 2018.
· Education continued to receive the most corporate support
· Education was supported by 94% of companies and accounted for an average of half of companies’ CSI spend (50%) in 2019, up from 44% in 2018. Social and community development remained the second most supported sector and health the third, with 77% and 51% of companies funding these sectors respectively.
· However, food security and agriculture received a greater average percentage of CSI expenditure (9%) than health (7%) for the first time.
· The proportion of companies supporting disaster relief increased significantly, from 28% in 2018 to 41% in 2019. However, only 2% of companies’ CSI funds were directed to the sector.
· Environmental causes also saw increased support, from 30% to 38% of companies, and from a very low 2% of average companies’ CSI spend in 2018 to 5% in 2019.
Source: 2019 Trilogue CSI Handbook
In closing, we have noticed the increase presence, investments and interventions by philanthropists; with the focus on grassroots remedies to address most of the social and other humanitarian challenges.
Wikipedia defines philanthropy as follows.
Philanthropy consists of "private initiatives, for the public good, focusing on quality of life". Philanthropy contrasts with business initiatives, which are private initiatives for private good, focusing on material gain, and with government endeavors, which are public initiatives for public good, e.g., focusing on provision of public services. A person who practices philanthropy is a philanthropist.
Philanthropy is different from charity, though there is some overlap. Charity aims to relieve the pain of a particular social problem, whereas philanthropy attempts to address the root cause of the problem