Corporate charity as political intervention
Social investment programmes reflect the view that companies serve a range of stakeholders
The notion of "good giving" in voluntary support of community upliftment is very much a zeitgeist of our times. A global Barclays Wealth survey in 2012 found that, as a proportion of disposable income given to community causes by employed individuals, South Africans were the second-most generous people in the world, after Americans.
In 2015, Statistics SA reported that the number of people who volunteered unpaid time in support of community projects – most often through churches and schools – had almost doubled in two years, and ran into millions of South Africans.
In the private sector, corporate social investment has entrenched itself as standard practice in many companies.
Corporate social investment is that part of broader corporate social responsibility that is external to company and employee needs, external to product marketing, and aims at uplifting communities in such a way that the quality of life is generally improved and safeguarded. It is a more focused part of social responsibility than employee housing benefits, or cause-related marketing.
Corporate social investment or responsibility is business seeing its own citizenship role as broader than a responsibility to shareholders, taking a view that it has responsibilities to societal stakeholders across the board.
IN SA, IT IS MORE ABOUT WIDESPREAD POVERTY, LACK OF OPPORTUNITY AND A FRACTURED BODY POLITIC.
This broader citizenship role is assumed across the developed world. There is now an International Organisation for Standardisation certification for corporate social responsibility, ISO 26000. There are fundamental differences in emphasis and raison d’etre between how business approaches its community engagements in SA to how it is approached in much of the rest of the world.
The drivers for business social responsibility in the US and Europe coalesce around brand positioning, attractiveness of companies to especially young employees, and consumer buying habits where these are linked to values that are deemed to be inherent in particular brands or products.
In SA, it is less about brand positioning, environmental issues and other "first-world problems", and more about a reaction to widespread poverty, lack of opportunity and a fractured body politic. It’s a lot more coalface in SA and tricky too.
Apart from social investment forced through state licensing conditions in the mining and alternative-energy industries, corporate social investment in SA is a voluntary add-on.
Companies-as-citizens go beyond the inherent good of their existence to helping build SA through corporate social investment, enterprise development, skills-development programmes, employee benefits in housing and bursaries, community social and labour plans (mining and alternative energy sectors), industry transformation charters, broad-based black economic empowerment codes of conduct, King committee codes of the Institute of Directors, "pacts" on schooling, procurement, skills and a green economy, in programmes of employee community volunteering work and more.
It is often an effort in support of the National Development Plan’s call for business to be "active citizens", summed up by Brand SA as "the responsibility, and opportunity, for South Africans to engage with and among themselves". Or, as former Business Leadership SA chairman Bobby Godsell noted in 2015: "A successful society depends as much on the quality of its citizens as it does on that of its leaders. This includes a particular kind of citizen: the company, or corporate, citizen."
PERHAPS ANGLO’S GREATEST GIFT WILL ONE DAY BE SEEN IN HOW IT INFLUENCED THE PRIVATE SECTOR.
To choose to take on corporate social investment in this way is a profoundly political act.
In the 1830s, the Cape of Good Hope Bank started the Cape of Good Hope Trust as the continent’s first charitable grant-making vehicle (it still exists, now housed in Nedbank).
Formal corporate sector investment began in the second year of De Beers Consolidated Mines in 1890. In that year’s annual report, chairman Cecil John Rhodes argued the case for philanthropy being part and parcel of the company’s duty.
Then, founded in 1917 by Ernest Oppenheimer, Anglo American started its community-giving campaign two years later to help assuage the devastating Spanish Flu. It would be through Anglo American that the defining choices would be made that would set the scene for how SA’s private sector should behave in relation to broader society — especially later to those South Africans excluded by apartheid.
Anglo American benefited from migrant labour law and labour practices that were dodgy in the extreme – as recent and pending class-action suits attest about silicosis and tuberculosis being allegedly caused unnecessarily on the mines.
Benefiting from the flexibility of movement that came with enjoying enlightened leadership in the Oppenheimer owner-management set-up, it nevertheless also made some extraordinary decisions that went beyond its business concerns. It did so in speaking to a duty to a broader South Africanism that was in direct conflict with the ruling political mores of the day.
In 1954, Oppenheimer defined Anglo American’s purpose: "The aims of the group have been – and they remain – to earn profits, but to earn them in such a way as to make a real and permanent contribution to the wellbeing of the people, and to the development of southern Africa." The scale of this commitment became clear in 1956, when police descended on Sophiatown in Johannesburg, tearing down the suburb that got renamed Triomf. Oppenheimer provided finance to build 15,000 houses in the black settlement southwest of the city — the start of Meadowlands in Soweto.
During the Treason Trial in the 1950s, Anglo put all the trialists on its payroll to help their families survive the ordeal. Throughout the apartheid years, Anglo published its chairman’s statement annually in double-page spreads that hardly dealt with the company’s fortunes, but rather on the political and economic crisis, with calls for reform and specific suggestions.
The English press was supported, bought and secured for opposition voices. In the 1980s, Frontline magazine was funded when it hit the wall and The Weekly Mail newspaper was saved from collapse with Anglo carrying its printing costs.
The voice of opposition was kept alive through financial and other support given to the Progressive Federal Party, forerunner of the DA. The premier anti-apartheid research house, the South African Institute of Race Relations, received support and, with the collaboration of others in the private sector, the Urban Foundation was set up in 1977.
The foundation became SA’s leading independent development agent, creating the expertise still relied on today in the provision of low-cost urban housing. It electrified Soweto and its work on alternatives to apartheid legislation had important effects in preparing the way for the repeal of influx control, the land acts and the Group Areas Act.
It acted also as a conduit for collaboration between diverse parties such as the Dutch Reformed Church and the Soweto Civic Association.
Anglo’s setting up of the Institute for Industrial Relations in 1976 began the professionalisation of industrial relations in SA and, importantly, did so with trustees drawn from the ranks of employers and trade unions.
Years before the Wiehahn commission’s liberalisation of black trade union activity, Anglo’s Harry Oppenheimer was calling on business to recognise and negotiate with black trade unions.
Intertwined with all these was Anglo’s corporate social investment work, which formed the basis of what we do in that arena across the South African business community today. This started ramping up in the 1950s with the formation of a chairman’s fund, followed by a decision in the early 1960s that at least half of the company’s social spend should directly benefit black people.
In 1974, a momentous decision was taken that would create South African corporate social investment as we know it today. Anglo created a department to develop and carry out social investments. For townships and villages, it heralded the coming of the cavalry, called the Anglo American and De Beers Chairman’s Fund.
Led by Michael O’Dowd, it was the start of a massive infrastructure development project, the Rural Schools Programme, which exists to this day with rand-for-rand state support. It built the first black technikons, the SOS Children’s Villages and backed Johannesburg’s African Children’s Feeding Scheme, still feeding 31,000 youngsters daily.
Later led by Margie Keeton, the Anglo American and De Beers Chairman’s Fund became a standalone and developed what became a uniquely relevant South African approach to best-practice corporate social investment operating systems, philosophies and community partnership protocols.
The Anglo corporate social investment model in SA’s business community may also be at work in more than 40 countries today — South African mining’s unique gift to humanity.
The Chairman’s Fund department was transformed in 1998 into a nonprofit company that could house the corporate social investment trusts of Anglo and De Beers, but also those of other companies, and called Tshikululu Social Investments. It now houses the corporate social investment work of 23 South African companies, from Anglo American to FirstRand.
Anglo’s contribution to community development work in SA in 2016 topped R1bn, but this is a company in decline. Perhaps its greatest gift will one day be seen in how it influenced others in the private sector.
• Pereira is editor at corporate social investment specialist communications hub, WHAM! Media. This is an edited extract of his speech at the annual Nation Builder conference.