Corporate community investment and development- Africa 2013
1. Corporate Social Investment
Corporate Community Investment
Community Relations
Socio Economic Development
Next Generation Consultants
Reana Rossouw
Summary of the latest African Trends
2013
2. The last six years…..
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2006: A surge in corporate
giving
2007: Corporate giving rises
moderately
2008: A gloomy outlook
2009: Businesses buckle up
2010: Businesses set flat
giving budgets
2011: No increase in giving
2012: Cash giving
decline, product giving (in
kind) increases
3. Trend 1: Recessionary Times - 2012
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49% of giving was Charitable -- defined as reactive community
giving for which little or no business benefit is expected. Ex. Disaster
relief
47% of giving was for Community Investment -- defined as proactive
grants that simultaneously aid long-term business goals and serve
a critical community need. Ex. Multi-year grants and flagship
programs
24% of giving was Commercial - defined as giving in which benefit to
the business is the primary motivation. Ex. Cause marketing and
directed giving to organisations as requested by clients or customers.
4. Trend 1: Recessionary Times - 2013
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While some companies may start new
community investment projects this
year, many are winnowing the causes
they support in favour of
fewer, bigger, higher-profile grants to
fewer organisations.
Companies are now zeroing in on
social issues that threaten their
bottom lines, like people’s ill
health, high transportation costs, or
diminishing fresh water.
They are also focusing on causes that
help them tap into new
markets, appeal to their customers
emotions, and use their employees’
skills, time and contributions.
5. Trend 2: Strategic Giving
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Varying trends by industry
Some industries, such as Energy, Utilities, Materials, and
IT, provide more than 50% of their funding as direct
corporate cash.
Financial and Industrial companies provide nearly 50% of
their charitable funding through their foundations.
Healthcare companies provide nearly half of their giving
as non-cash contributions. Most staggering of
all, Pharmaceutical companies on average provide
almost 90% of their total giving in the form of non-cash
donations.
Economic development is the new darling
Green programs are in fashion
Cost benefit analysis of investments are serious
considerations
Measuring impact and return is critical
Reporting of corporate giving is highly variable, with
relatively low take-up of any one standard
measure, making accurate assessment of the complete
picture difficult
6. Trend 3: Operational Focus
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Significant Emphasis on Strategy and Restructuring
68% of grantmakers are revising their grantmaking structure and strategy in
response to several developments, including natural disasters, government
legislation, the external business environment i.e. environmental or social
risks, and shifting business objectives
Changing Perspectives on Publicising Giving
While 71% of giving departments used PR as a communications strategy, 35%
leveraged marketing or advertising to raise awareness, and 26% issued annual
community relations/corporate responsibility reports/sustainability and
integrated reports
Decentralised Decision Making
26% of companies managed their giving departments exclusively from corporate
headquarters, 20% incorporated local or regional management into areas of
their corporate grantmaking programs, and 54% operated through a hybrid
model of the two
Popularity of Flagship Programs
55% of giving departments engaged in one or more flagship campaigns, which
are defined as significant initiatives that are a central focus of a company’s
grantmaking.
7. Trend 3 – Operational Focus Continue
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Programs serving basic needs i.e. Community/Welfare
and Economic Development, were the only two focus
areas that experienced an increase in corporate cash
contributions.
Companies became more targeted in their giving, rather
than spreading corporate funding across multiple social
issues. Furthermore, the number of grants per program
area (Rand value) of these grants increased.
As one way to maintain grant funding levels and reduce
administrative expenses, 53% of companies reduced
their management and program costs
participation and raised limits for the corporate match.
8. Trend 4: The BIG Issues
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More Demand for Outcomes:
The biggest trend is a growing demand to 1) articulate what results
companies hope their investments will achieve and 2) track whether
those results are actually happening
Decreasing Emphasis on Non-profit “Overhead”:
The bane of the non-profit sector is the meaningless and destructive
public perception that you can separate non-profit programs from the
administrative costs ...But the good news is that more and more
companies are coming to realise that you can’t just invest in programs
without the staff, infrastructure and fundraising to make those programs
happen
More Advocacy for the Sector as a Whole:
The development sector has long been a fractured grouping of
organisations of various sizes, business models, and issue areas. It has
been almost impossible to organise the disparate sector to fight for
better government regulations, improved public perception, more
funding. But that tide is starting to turn
9. Trend 4: The BIG Issues - Continue
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Savvier Donors:
Because non-profits are getting more savvy, donors are as well. In
addition to an increasing demand for proof of outcomes, donors are
slowly starting to understand the difference between two kinds of
money in the sector: revenue and capital
Increased Efforts to Rate and Compare Non-profits:
As non-profit outcomes are increasingly in demand, donors become
savvier, and the “non-profit overhead” distinction diminishes, we will
increasingly evaluate non-profits based on the results they
achieve, not on how they spend their money
Therefore
The non-profit sector will go through a revaluing process
Technology will play a major role for both non-profits and their
supporters
The world is shrinking and grantmaking borders are broadening
10. Trend 5: Anti-Trends
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It’s all about the Economy:
As the world works its way through an epic economic
crisis, jobs and the economy continue to be very much on
consumers’ minds.
The Power of Local:
It is simple. Tackle things that support people where they live.
It’s the difference between ending hunger—and ending
hunger in my community.
11. Trend 4: Anti-Trends - Continue
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Ethnicity:
Communities have become
melting pots – 2013 may well
be melting point for civil
unrest.
Minority vs. Majority
funding, youth
development, jobs, skills, inco
me, poverty, income
disparity, BEE scorecards and
mining, farming, retail, commu
nity unrest points to a future
where customers not only
have a high propensity to
support specific causes, they
also have high expectations of
companies to take on issues
that particularly impact them
personally.
What a Disaster:
Floods in
Mozambique, KZN, Limpopo,
burnt down informal
settlements, schools without
books or other resources.
Most companies have disaster
response plans in place, and
they should. Communities
and customers believe
disaster relief is a critical
issue companies should
address
12. Trend 4: Anti-Trends - Continue
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The era of fair and ethical grantmaking
Relationship Reset - Some simple rules:
Transparency
(Being clear about your intentions, actions and impacts)
Authenticity
(First having, then holding true to core values and principles)
Engagement
(Providing a spectrum of ways for stakeholders to contribute and
participate).
13. Continental Context
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Vastly different models of
development
Politically very complex operating
environments
Long history of development aid
Good News – exposed to international
developmental models specifically large
developmental agencies –
Oxfam, USAID, missionary-faith based
organisations and government support
agencies – UNDP, Danida etc.
Bad News – capacity and skills not
necessary transferred nor have
practitioners been involved in program
design and program management
Governments received the money –
which does not necessarily mean it
ended up with the intended beneficiary
communities
Development was based on developed
economies principles (Western
Solutions)
14. North Africa
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Large foundations
Wealthy individuals – Oil Barons –
Aga Khan Foundation
Politically complex
Muslim (Faith based) Closed
Foundations
War Stricken – aid complexity – who
to give to and who actually receive
Large global partnerships
Government considerations (political
correctness)
Government Recipient
15. West & East & Central Africa
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Hundreds of thousands NGO’s & High level of corruption
Big government based foundations – Nigeria
Government/Community Foundation (NGCC) – Supported by Oil
companies – i.e. Shell
Large multi sectoral partnerships – British/Dutch High
commissions, World Bank, United Nations
Integrated Programs – skills, jobs, exports, market based – Niger
Delta and Rift Valley
Development Sector has become an industry/career – Third Sector
Companies mainly involved in sponsorships, reputation building type
programs
Increased cost of doing business – licence to operate
Scalability a problem – development highly fragmented
Influenced by international development agencies and their agenda’s
Indigenous funding very low and slow – mostly multi national
companies
Strokes of brilliance – Foundations (grantmaking) collective
fundraising – management fees – capacity building for smaller NGO’s
16. Southern Africa - Regional
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South to South exchange (vs. North to
South)
Support regional integration (SADC) – cross
border investment
Growing role of emerging economies
(BRICSA) – global partnerships on
government level (no trickle down to
industry/practice yet)
Role of China in African Investment
(Infrastructure)
Major growth in private philanthropy and
its profile and birth of new
champions/philanthropists/high net worth
individuals
Growth in private , community and family
foundations – working across borders
New market based approaches to Socio
Economic Development
17. Market Based Approaches - Innovation
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Bottom of Pyramid – BOP -
Models
Micro credit movement
Venture philanthropy – Seed
Capital
Social entrepreneurs and
entrepreneurship
Impact Investment
New players –
outsourced, insourced, hybrid,
intermediary solutions
18. New Influences
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Greater emphasis on measurement
of impact
(Sustainability & Integrated Reporting)
New patterns in giving
Increasing focus on indigenous giving
and community development patterns
(poor philanthropist), growing
diaspora giving
Quest for sustainability
Definition of sustainability in socio
economic development context
Issue of stakeholder engagement
Social baseline studies, research –
evidence based development models
to clearly understand impact and
requirements of stakeholders
19. Financial Crises – The Good News
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Debate about aid /
development effectiveness
Focus more on trade and
investment approaches
Policy implementation and
systemic reform – focussing on
specific issues -
education, health, job creation
Multi-sectoral partnerships
New developmental models -
social impact investing, cause
related marketing, industry
based investments, large
scale, new innovation in
program design
More focus on measurement –
impact and return
20. Financial Crises – The Bad News
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More pressure on developmental
assistance
Donors not living up to pledges
Even though growth in community
foundations numerous NGO’s closing doors
Project based funding no operational
support
Fewer international donors and
development agencies in Southern Africa
Realisation that development takes a long
time – which might be a luxury for some
Realisation that development requires
many players and includes many facets
More isolated development – less
collaboration
More focus on sustainability
21. New Considerations
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Movement by business into
unconventional funding areas
Policy, advocacy, human
rights, gender, climate change
Partnerships with government and
civil society
Longer term investment and support
Increase in cross boarder giving and
global philanthropy – as African
companies became more global
Challenges in enabling environment –
compliance focused investment and
giving
22. Focus Areas
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Job Creation
More for Enterprise Development, SME
Development, Skills development
Environment
More funding – renewable energy, mitigate
impact, carbon off setting/trading, water
Education
Less funding for ECD, Schools, Bursaries, FET
and subject specific
(Science, Maths, Technology)
Health
Less for HIV/Aids – government refocusing and
business follows
Overall
Industry specific funding – Mines –
Infrastructure (Schools, clinics), Pharmaceutical
– Health/Primary health care, Petroleum –
Environmental, FMCG – BOP
23. Serious Issues and Questions
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Impact of government funding –
social grants
Greater dependency creation, less
sustainability, less developmental
approaches
Quest for impact and sustainability
How do we define sustainability in SED
Scalability and Collaboration
How do we move from less than $1 to
self sufficiency and give hope to the
youth
New issues – food security, water
scarcity, impact of climate change
How do we deal with future challenges
if we are not meeting today’s
requirements and issues
24. Towards the Future
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Innovation and Creativity
to solve Africa’s problems
Responsiveness and
Responsibility of
everyone to solve Africa’s
problems
Scalability and Focus to
solve particular problems
endemic to the African
Continent
25. New Patterns and Implications
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Resources
Insight and knowledge of those we are
trying to serve
Importance of needs assessments
Soliciting feedback about our efforts
Ensuring and listening to external voices
Practices
Reduce turnaround and streamline
processes
Ensure fair and ethical grantmaking
Consider general operating
support, multi-year grants and capacity
building support
Ensure proper stakeholder engagement
Embrace evaluation, monitoring and
impact assessment as learning and
improvement mechanisms
26. Hard facts and dangerous half truths
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What is good for them may be bad for you
What is good for you may be bad for them
Development takes time
Development requires specialist knowledge
and expertise – the stakes are too high
There is no ‘one size fits all’ solution/approach
Don’t cherry pick
Sustainability may be an oxymoron
Give or else mentality
War on ideas
The truth, the whole truth and nothing but
the truth
Marikana’s Legacy – what we do and what
people see
Bad things happen to good companies – Lance
Armstrong and the Cancer Association, Mama
Jackie and Carte Blanche
27. Towards the future
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A new narrative:
Companies need to view their grantmaking as contributors to break-
through collaborations and innovations that address complex social
challenges.
Inclusive operating systems:
An “investment portfolio” model aligns giving and rallies corporate
assets to benefit society and drive business success.
It’s a profession:
Corporate grantmaking is an essential, integrated business leadership
function and is considered a professional field.
Improve collaboration, communication, and knowledge sharing:
The corporate grantmaking field enhances its external leverage through
a powerful platform for communication and collaboration.
Mobilise “field level” leadership behind this agenda:
With individual leaders at its nucleus, the corporate grantmaking field
commits to increasing impact, enhancing value, and supporting
transformation.
29. Please note:
This presentation is part of a larger body of research and
knowledge.
This information is the property of Next Generation Consultants
and may not be copied or used without express permission.
More tools, articles and training information is available at
www.nextgeneration.co.za
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