Corporate Social Investment in South Africa

Striving for Meaningful Societal Impact

By Raine St.Claire

Driven by a moral commitment to foster positive social change, South African companies are evolving their Corporate Social Investment (CSI) efforts. The majority of their R11.8-billion corporate social investment (CSI) in 2023 was directed toward supporting nonprofit organisations (NPOs). This marks a significant increase of R0.9-billion (8.26%) from the estimated R10.9-billion spent on CSI allocations in the 2022 financial year.

CSI Sector Focus: Education, Social Development and Food Security

The focus is on achieving systemic impact through collaboration, research, networking, and thought leadership, even in the face of government budget cuts. The primary areas of emphasis in the development sector - education, social and community development, and food security and agriculture have remained consistent.

Unlike the trends observed in the United States, where 25% of CSI spending is allocated to health and social services on average, South African companies dedicate only 6% on average to the health sector in 2023.

Although there has been a slight decrease in support for education, it remains a top priority for local companies, with an increase in average spending.

Education

• Support declined from 98% in 2022 to 78% in 2023

• Average spending increased from 44% to 48%

Social and Community Development

• Supported by 74% of companies

• Average allocation is 13% of CSI

• Food Security and Agriculture

• Supported by 60% of companies

• Average allocation is 9% of CSI

Sector Allocation Trends: Health, Environment and NPOs

Social and community development retained strong backing from almost three-quarters of companies, with no change from the previous year, allocating a significant portion of their CSI in this realm. Similarly, food security and agriculture continued to receive notable support from 60% of companies in 2023.

Health

• South African companies allocate only 6% of CSI

• Support dropped from 43% in 2022 to 38% in 2023

• Environmental Causes

• Receive 3% of CSI on average

• 37% of companies claim support

• NPOs

• Primary recipients, with 84% of companies directing 63% of their spend to NPOs in 2023

Sources:TheGoodNews|Bizcommunity

Diverse Funding Channels: NPOs, Institutions and Social Enterprises

NPOs continued to be vital, with schools, universities, hospitals, and government institutions being the second most common funding channel.

• These institutions received allocations from 57% of companies, with an average allocation of 19% of their CSI expenditure

• Support for social enterprises has increased significantly, rising from 17% in 2022 to 28% in 2023

• Social enterprises now receive an average of 5% of CSI expenditure

Alignment With Sustainable Development Goals (SDGs) and CSI Operations

Many companies aligned their CSI with Sustainable Development Goals (SDGs) with an average of 5.6 SDGs.

• 63% integrated their CSI with SDGs

The prevailing approach for CSI operations was internal management, with a significant portion opting for a separate legal entity.

• 71% managed CSI operations internally

• 56% opted for a separate legal entity

CSI & Tech Integration

AI adoption was limited, with only a small percentage of companies and NPOs investing in AI for core operations and an even smaller proportion incorporating AI for CSI work.

• 35% of companies invested in AI for core operations

• 15% of NPOs invested in AI for core operations

• 10% of companies invested in AI for CSI work

This holistic overview showcases the dynamic landscape of CSI in South Africa, where companies strive for meaningful and impactful contributions to societal development.