IVAN SWARTZ: A private affair
With the government incapacitated by debt, corruption and the coronavirus, the private sector’s role in social upliftment is more important than ever
There will be no last-minute arrival of the cavalry to rescue us and effect the socio-economic change SA so desperately needs. The only solution is private/public co-operation.
Every day we read about some shortcoming on the public sector’s part, while the indigent continue to suffer. Government is battling spiralling national debt, poor service delivery, corruption, the coronavirus pandemic and growing civil unrest. Functionally, it is incapacitated to help those most in need and to generate the economic and social momentum needed to turn SA around.
The result is SA finds itself in a peculiar predicament: the onus to fast track social upliftment lies with private entities, and with ever increasing urgency.
The desperation of the indigent at the most basic of levels — food, clothing and shelter — speaks directly to the private sector, not least because many in this demographic are customers of businesses. Hence the phrase “giving back”.
The disconnect between the needy and private industries comes into play when big business treats corporate social investment (CSI) as a tick-box affair, rather than a plausible opportunity to help millions of desperate South Africans break out of the poverty cycle.
Though businesses create jobs and help stimulate the economy, there is now also an increasingly necessary social responsibility. It is in the businesses’ own interest to ensure that their market, their stakeholders, staff, and their suppliers exist in a stable and thriving environment. In essence, social activity is an investment that should ultimately result in a social and economic return.
Until the private sector fully grasps the concept of social impact investment, we won’t see positive fundamental change in our country.
The social impact efforts should influence corporate governance, not vice versa. The essence of ubuntu, or humanity, is a social creed that the private sector has, to a large extent, left unminded in their MacBook records and Google documents.
Companies in SA spent R10.7bn on CSI in 2020 and, as good an effort as this was, it clearly doesn’t match demand (granted that it is difficult to quantify the value of the social investment needed).
Given the deep-seated nature of corruption in SA, CSI funders, trusts, foundations and philanthropists are advised, and challenged, to follow tested criteria to ensure the funds made available by the business world are used to achieve maximum social impact, rather than randomly handing money to charities.
Businesses will never invest in something with a low economic return, and in the same way they shouldn’t invest in something with a low social return.
To ensure that the funds offered by business do achieve tangible impacts, a number of processes are required. For the business, it’s good to partner with a credible organisation that has a focus on managing funds. We have witnessed this first-hand at Valcare, a non-profit company that professionally manages the distribution of funds to ensure maximum social impact.
This Western Cape organisation has 18 years of experience in developing the processes that allow it to maximise the positive impact within the Cape winelands area.
In addition to the funding received non-profit organisations also require support via capacity building and training, assisting with strategic planning and guidance, governance and compliance, and the development of suitable systems and processes.
Hopefully, the private sector will start to understand that the true measure of success is more than just the bottom line. They should also work towards building a legacy, even if it’s only within the space in which they operate.
• Swartz is Valcare CEO.
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