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South African companies reduced their CSI spend to R10.3bn in 2021

25th November 2021

By: Tasneem Bulbulia

Senior Contributing Editor Online

     

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South African companies spent an estimated R10.3-billion on corporate social investment (CSI) this year, representing a 7% decrease in real terms from the R10.7-billion spent on CSI in 2020.

This is according to CSI consultancy Trialogue, which released its findings in its latest yearly Trialogue Business in Society Handbook.

Trialogue has been tracking CSI spend for almost a quarter of a century, and for the first time ever, over half of companies reported decreased CSI expenditure, according to director Cathy Duff, who notes that Covid-19 and a decrease in corporate profits have contributed to this.

This contrasts with the US, where total community investments showed unprecedented growth as companies attempted to alleviate the negative effects of the pandemic.

More companies reported making non-cash contributions of products, services and time during the current financial year – almost one-third of the 69 companies included in the analysis reported on this, up from 19% in 2011.

However, non-cash giving as a proportion of total social investment was only 13% on average this year – significantly lower than the 22% reported by US companies.

CAUSES AND REGIONS

As in previous years, education was the most popular cause, accounting for an average of 39% of CSI spend. This is significantly less than the average of 50% spend received last year, owing to increased support for food security and agriculture (10%, up from 7% last year) and disaster relief (9%, up from 4% last year).

Social and community development was the second-most supported sector (17% of CSI spend) and, for the first time, food security and agriculture was the third-most supported sector.

The cross-cutting issues of environmental sustainability, psychosocial support and gender equity are most commonly incorporated into some CSI projects or considered at a programme level, with few companies having specific CSI projects dedicated to these issues.

Where company leadership chooses to take a stand on major issues, 61% speak out against gender discrimination, followed by inequality at 58% and climate change at 57%.

Unsurprisingly, few company leaders take a public stand on the minimum wage at 21%, or excessive executive pay at 7%.

Less than half of CSI spend, 47%, was allocated to projects with a national footprint. Gauteng was the most supported province this year, with 57% of companies having directed funding to projects in the province, which received on average 21% of companies’ CSI expenditure.

This was followed by KwaZulu-Natal, supported by 45% of companies, and the Western Cape which was supported by 39% of companies.

UNSUPPORTED

Despite the obvious benefits of unrestricted funding (where recipients can choose how to spend the funds), which have become clear during the Covid-19 pandemic, most companies (90%) do not offer unrestricted funding, and 86% are not willing to consider it.

Some 38% of companies make funding contingent on project outcomes, with 39% considering doing so in future.

Similarly, more than a third of companies have provided funding to help non-profit organisations to self-generate funding at 35%, with 33% considering doing so in future.

NONPROFIT ORGANISATIONS

In line with previous years, nonprofit organisations (NPOs) were the most popular recipients of company CSI funds, with 87% of companies directing an average of 53% of their spend to NPOs in this year (slightly less than in 2020).

An average of 28% of NPO income came from South African companies this year.

COVID-19 RESPONSES

This year, priority responses to Covid-19 included ensuring the health and safety of staff with 99%, protecting customers with 81%, and making philanthropic contributions to Covid-19-specific responses with 80%, in line with 2020’s findings.

Of concern is the percentage of companies retrenching staff or not renewing contracts at 22%, and issuing notices of force majeure to suppliers at 13%, having doubled from 2020.


 

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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