SOUTH African companies need a new approach towards corporate social investment (CSI), says Sizile Mabaso, head of BoE Private Clients’ TBS Consulting.

Although companies may have the best intentions in the world when it comes to CSI, an outdated approach has already left many of them with millions of rands spent ineffectively or on the wrong beneficiaries, says Mabaso.

Mabaso, who has worked in the field for more than 12 years, has seen many instances where corporations have spent money foolishly, simply in order to comply with the government’s scorecards.

“These days the principal problems in the industry revolve not around a lack of funding, but the lack of a professional, long-term mindset by companies when approaching CSI,” she says. “The days of having a simplistic ‘charitable’ attitude are over — more sophisticated solutions are necessary to contribute toward lasting community development.”

Far too often, companies employ people with charitable mindsets to run their CSI programmes. These individuals are focused on dispensing funds and feeling good about what they have done. And although these efforts are commendable, Mabaso says, they are likely to be fleeting and superficial. Often this short-term approach does not provide long-term development solutions to communities in need.

“The first step in any effective CSI programme is for a company to have a strategic, long-term planner at the helm,” says Mabaso. “They must have a wide understanding of the issues and be able to design and implement a long-term strategy that delivers. Of course one does need empathetic people, but they should equally be business-minded.”

A company must also have a defined strategy, with a clear vision of what it wants to achieve with its CSI programmes over a three- to five-year timeframe. This should be closely aligned to its business strategy and values, such as targeting the communities in which it operates or contributing to causes that have an impact on its operations.

“Companies need to take time to reflect on what they want to accomplish with their money, not simply go out and spend it in an ad hoc fashion in order to comply with the government’s guidelines,” Mabaso says. “Only through strategic planning can they contribute to transformation and empowerment of communities in a real way. Often funds are wasted because companies don’t know what the end goal is.”

For example, even if one can point to 300 previously disadvantaged people being trained through a CSI programme, what exactly has this accomplished? Have these people gone on to start their own companies or gained employment as a result? What was the effect on their income or on the wider community?

“Companies must start looking at CSI as a real investment, rather than a purely emotional involvement,” she says. “Not in terms of profit for themselves, but in terms of real delivery.”

The next step is to employ the proper resources necessary to deliver the goals of the programme, as well as to have a good understanding of development issues. Without this understanding, the company won’t get results. “You must directly research the needs of the community, or at least understand exactly what the nongovernmental organisation (NGO) or charity receiving the funds is achieving, and how they achieve it.”

Once the right people, strategy and adequate resources are in place, it is essential to evaluate and review regularly the programme’s activities, successes and failures. “Organisations should interrogate both themselves and the beneficiaries of their CSI funds about the effectiveness of the programme and invite suggestions for improvement. They must be more critical of themselves, and ensure that their CSI strategies are still relevant and appropriate as they mature.”

She says donor companies must also adopt a more professional, long-term attitude towards NGOs and other charity organisations if they want their own CSI investments to be productive.

“NGOs and charities do play critical rolls in empowering communities and have become much more professional in recent years. They should be seen as partners who can educate the donor companies about what is really happening on the ground, and help to prioritise community needs. It is also important that the donor and the recipient agree on an outcome, as well as measurable guideposts in the process.

“All too often donor companies actually jeopardise the operations of NGOs and charities by requiring applications for new funding every year and not allowing them to build up reserves, which would be the obvious sound business approach. Financial reserves are vital for the long-term sustainability of a group and can be seen as evidence of a successful business; yet donors very often use these reserves as reasons not to give additional funds. This type of short-term thinking damages the NGO sector.”

Finally, Mabaso advises, companies can learn a lot directly from communities receiving CSI funds. “They should be allowed to suggest their own solutions to empowerment and development, rather than having these imposed on them from the outside. In many cases money is not the only solution.”

Using these guidelines a company a should be able to leave a lasting legacy through its programme, one that can create sustainable results and lead to development and empowerment, she says.