CSI’s Multiplying Benefits To Government And Country

5 Oct 2016

 

 

Corporate social investment (CSI) is mainly a self-imposed voluntary tax that companies take on, encouraged through private sector agreements and state tender incentives by government.

 

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

 

But when it’s seen in the big pond of taxpayer-funded government spending in social development, then CSI is a small fish indeed. So the current combined national and provincial budget (2014/15) stands at just under R1,3 trillion, against which Trialogue estimates that companies spent R8,2 billion on CSI last year.

 

In this CSI, almost half went to projects linked to education, the development sector that 89% of companies who have CSI programmes include among their beneficiaries. That means about R4bn, compared to a state education budget of R247bn.

 

And, while slow economic growth and high spending commitments mean that government is looking for ways to raise revenue and keep costs down, the same pressures mean that CSI spending is stagnating for the first time in almost 20 years.

 

But if CSI spending is so small compared to public spending, and if both may have hit a (temporary) ceiling, why then is CSI 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 some countries include human rights in their constitutions, they almost only ever entrench the fundamental rights to things like free association and speech, and from abuse like torture – 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 and services 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 stubborn (so the old Bophuthatswana’s relatively good schooling system still comes through in the currently good North West pass rates, while Venda’s disastrous schooling still plays out in today’s Limpopo, etc.).

 

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 mostly fragile institutions.

 

Here, especially, the private sector’s CSI top-up in finding and bolstering society’s “champions” becomes critical. CSI can be used flexibly and is often the tipping point between growing success or failure for the country’s centres of excellence of all sorts.  

 

One example is in the Creating Schools Trust that brings companies, foreign philanthropists and government together in rewarding already-achieving schools with new facilities of the most progressive design for better learning results. Another is the funding of the National Youth Orchestra in its world-class 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 projects such as Vasfontein’s youth centre near Hammanskraal, PEN’s Pretoria inner-city work, and in the orphan-care work of Durban’s Liv Village, among others (see a descriptive list of top class organisations here).

 

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

 

This article was first published on the Nation Builder blog in February 2015.

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