CSI Social Impact: The importance of giving during a global pandemic

By Jessie Taylor

Despite a year of unprecedented economic changes due to the global pandemic, which has in turn seen a sharp decline in national employment numbers, South African businesses have stepped in to support civil society. The amount local businesses put towards Corporate Social Investment (CSI) in 2020 increased, despite the economic downturn. Many businesses stepped up in response to Covid-19, offering relief through donations to government programmes and community outreach initiatives.

CSI, making business sense

CSI is built on a growing trend in business to put people before profits but contributing time and resources to uplift communities and invest in environmental or economic causes. CSI projects embody a commitment to respond to the socio-economic needs of our society. This commitment has seen the business community, from large corporations to sole traders, increasingly dedicating money or resources to improve the nation with no direct financial benefit to the company – as well as contributing to the betterment of society, CSI initiatives are good for business.

Just some of the reasons why CSI is vital for a company, is because it generates positive publicity, which in turn can attract new customers, as well as boosting employee morale.

For many employees, pay and benefit are just part of the reasons they choose to join and stay with a company. A growing number of employees are looking to work for companies that match their values, and CSI projects are an ideal way to reflect the company’s value system. This is evident in the number of start-ups that weave social impact messaging into their brand, ensuring that social responsibility is a part of their brand from day one.

However, aside from ensuring your company retains talent, CSI projects make business sense. CSI has become so commonplace in the business world that many companies are taking on initiatives simply to stay on par with their competitors.

Most CEOs know that CSI brings benefits such as tax breaks, increased BEE points, improved business reputation, reduction of operational risk, skills development, enhanced stakeholder relationships and compliance with international standards. It could be for these reasons that South African businesses continued their spend in the face of the global pandemic.

CSI spending in South Africa increased by around 5% year on year in 2020, according to research published in the Trialogue Business in Society Handbook. The total estimated CSI expenditure by South African businesses was R10.7 billion, compared to the R10.2 billion spent on CSI initiatives in 2019.

Beyond the bottom line

But much of the CSI expenditure was also channelled towards responding to the global pandemic. According to the report, almost all companies prioritised the health and safety of their staff and customers in their response to Covid-19. The response to Covid-19 across the country as a result of the realisation of our interdependence, both with all of humanity and our planet, said Mamphela Ramphele Co-Founder of ReimagineSA in the report.

“What was most awe-inspiring in the early days of the pandemic was how the best in us showed up. Strangers reached out to others to help them. Old people, children, and the weak and vulnerable became a central focus of neighbours, often for the very first time. We embraced this Ubuntu unselfconsciously, which gave us a glimpse of our greatness, if only we were able to continue to exhibit the power of unity in diversity,” she said.

The Solidarity Fund

Of those companies who set aside funds in response to Covid-19, two-thirds of businesses allocating CSI funding to support food security and healthcare.  But even larger donations were made to the national Covid-19 response – 80% of companies made philanthropic contributions to Covid-19-specific responses and around 60% of corporates answered the government’s call to pool resources in the face of the pandemic, by donating towards the Solidarity Fund. The Solidarity Fund was established by President Cyril Ramaphosa early in the country’s response to the pandemic.

“We have set up a solidarity fund, which South African businesses, organisations and individuals, and members of the international community, can contribute to. The fund will focus efforts to combat the spread of the virus, help us to track the spread, care for those who are ill and support those whose lives are disrupted,” Ramaphosa said at the time of the fund’s establishment.

The public benefit organisation has been mandated to support the national health response and contribute to humanitarian relief efforts by mobilising South Africans.  In seven months, the Solidarity Fund had accepted pledges for R3,16 billion from businesses, governments and individuals, of which R3,12 billion had been received.

Aside from responding to Covid-19, corporations continue to invest heavily in education initiatives, the report also found. Over half of the CSI spend in 2020 was funnelled into education initiatives, while 15% was put towards social and community development.