The social sector (social enterprises, charities, social impact, shared value) has been utterly fascinating and I firmly believe that the world is unlikely to succeed in it's current format. Pure capitalism has failed. Pure charity has failed. Which means the place to play is in the middle.
Here are some thoughts around charity, volunteering, CSI, employee engagement, HR and other important bits and bobs.
We live in a business world where PURPOSE is becoming as important as PROFIT - and these are the trends shaping that space.
A shorter version of this was published on BizCommunity CSI.
Thank you to Katherine Robertson (Head of Clients and Programs @ forgood) for her help with this article.
Employee engagement is back!
CSI is no longer just focused on communities external to their business. This is not only because of a move away from traditional donor funding models, but also due to the documented benefits of directly engaging staff with social investment projects. Employees are deep diving into an area that was traditionally left to small teams and Trusts.
Employees, especially Millennials, want to know and experience the purpose of the brands they work for - and reports indicate that there is real value in providing staff with the means to be involved in things that happen outside their cubicle.
Involving employees in volunteering programmes for instance, has direct HR benefits, including increased employee productivity, retention and morale. To date, this has not been leveraged on any grand scale in South Africa.
However, I expect “employee engagement” will soon re-enter the fray as a business buzzword (it was big back in 2006). As this happens, we will see a greater consolidation of the teams managing social investment, stakeholder engagement and employee satisfaction projects.
The boundaries between CSI, Sustainability and HR will blur
The link between CSI and sustainability is perhaps most obvious in the current South African landscape: CSI practices need to be sustainable and good CSI can lead to sustainable business practice. Under broader business strategy, these two will become increasingly linked and eventually converge.
Perhaps less established is the link between CSI and HR. Although these teams seldom sit in on the same meetings, employee wellness, engagement and talent retention can all be linked to a business’ social commitment and performance.
CSI will see pressure from Enterprise and Skills Development requirements
CSI projects and their budgets are coming under serious pressure from enterprise and skills development (ED and SD) based strategies. In South Africa, investing in the sustainability and support of black-owned businesses in your supply chain promises far higher BBBEE points than CSI initiatives do. To be fair, it's probably a better short term idea anyway!
Initially, this might result in shrinking budgets for CSI teams – but as we move more towards a “shared value” business approach, ED and SD will need to be supplemented by some form of reinvented CSI.
The volunteer bus will cease to be the only strategy
Events in which thousands of employees gather at once to take part in a generic actvitiy are great for team building, easy to organise and have immediately visible output for reporting. Think 67 minutes of anything.
However, these events are not great for long term impact, or even intermediate outcomes. The thinking behind the forgood business product was the potential in this space for unstructured volunteering. By providing employees with a broad set of volunteer opportunities, staff can engage their individual skills and passions while still contributing to required CSI measures and reports. Unstructured, personalized programmes create greater value, relevance and scale – therefore, greater impact.
CSI Teams will become more pro-active
Effective CSI requires structure, strategy and deeper involvement in projects – and teams are starting to wake up to that. They are no longer able to just react to incoming funding requests, but are increasingly required to actively seek out and create brand and staff relevant opportunities.
While the old-school approach of giving R1m to an NGO involved in technology empowerment is still around, more and more corporates are preferring to build and brand infrastructure (think 50 new ICT centres with free wifi) instead.
Enabling this is the growth of digital platforms that allow NGOs, communities and corporates to connect and communicate around actual needs on-the-ground. Facebook and democratized publishing is one. We're another.
Impending legislative issues
If you visit the Department of Social Development website and trawl through some of their reports, you'll find completely different data conclusions on the NPO sector. Seemingly, South Africa has anywhere between 100 000 and 250 000 registered non-profit organisations - in various states of compliance.
We tested the downloadable database of NPO email addresses with an unfortunate 99.8% bounce rate across 3 provinces.
That's just the data.
At forgood, we're also seeing quite a lot of evidence that not all social projects fit under the “traditional” definition of charity, meaning that they are a NPC (not for profit company) and have at least Section 30 (tax exempt) or Section 18A (tax exempt and can issue tax deduction certificates) status.
Firstly, any organization without an 18A is usually disqualified from most corporate CSI funding. Secondly, and more worryingly - how many grassroots NPO's that haven't taken on this admin burden (getting and maintaining an 18A status is not easy) are actually tax paying entities?
This all feeds the detrimental cycle that only the big professional organizations – those with the money to do the audit and compliance work required by many corporates - are getting supported.
Great work (as usual) is happening at grassroots, but it's struggling and needs structural support.
Expect to see more attempts to understand company structures, tax efficiency and increase transparency of what's required (and necessary) for corporate compliance.
Things are getting interesting... What are your thoughts?