Overview of the latest trends in corporate social investment, corporate community investment from Africa and South 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…..
20/02/2013Next Generation Consultants12
 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
20/02/2013Next Generation Consultants3
 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
20/02/2013Next Generation Consultants4
 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
20/02/2013Next Generation Consultants15
 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
20/02/2013Next Generation Consultants6
 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
20/02/2013Next Generation Consultants7
 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
20/02/2013Next Generation Consultants8
 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
20/02/2013Next Generation Consultants9
 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
20/02/2013Next Generation Consultants10
 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
20/02/2013Next Generation Consultants21
 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
20/02/2013Next Generation Consultants12
 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
20/02/2013Next Generation Consultants23
 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
20/02/2013Next Generation Consultants14
 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
20/02/2013Next Generation Consultants15
 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
20/02/2013Next Generation Consultants16
 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
20/02/2013Next Generation Consultants17
 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
20/02/2013Next Generation Consultants18
 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
20/02/2013Next Generation Consultants29
 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
20/02/2013Next Generation Consultants30
 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
20/02/2013Next Generation Consultants21
 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
20/02/2013Next Generation Consultants22
 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
20/02/2013Next Generation Consultants23
 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
20/02/2013Next Generation Consultants24
 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
20/02/2013Next Generation Consultants25
 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
20/02/2013Next Generation Consultants36
 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
20/02/2013Next Generation Consultants27
 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.

28. Questions you have to consider
20/02/2013Next Generation Consultants28

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
20/02/2013Next Generation Consultants29