Ivan Swartz | CEO | Valcare | mail me |
There will be no sudden arrival of the cavalry to rescue us and that will affect the socio-economic change South Africa needs anytime soon. The only solution going forward is private/public co-operation and, as harsh as the statement might seem, it’s necessary.
Every day we read about some sort of shortcoming on the public sector’s part while, meanwhile, the indigent suffers – with the situation not getting any better.
Government is battling spiralling national debt, poor service delivery, a corruption backlog, the harsh impact of the pandemic, and growing civil unrest. Functionally, it is incapacitated to help those most in need and to generate economic and social momentum that is needed to turn South Africa around.
Urgency
As the challenges facing the public sector are so significant, South Africa finds itself in a peculiar predicament in which the onus to fast-track social impact lies with private entities, and with ever increasing urgency.
The desperation of the indigent at the most basic of levels, including food, clothing and shelter, has effectively thrown the gauntlet at the private sector – not least because many in this demographic are customers of some businesses. This is why the phrase ‘giving back’ is often used.
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.
Although businesses create jobs and help stimulate the economy, there is now a social responsibility that is becoming increasingly necessary.
It is also 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 which should ultimately result in a social and economic return.
Until the private sector correctly grasps the concept of social impact investments, we won’t see significant positive change in our country.
Corporate governance
The social impact efforts should influence corporate governance, and 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, ironically even within the African context.
For example, Companies in SA spent R10.7 billion on corporate social investment in 2020 but, as good as the effort is, it still doesn’t match the demand – even though it’s rather difficult to quantify the value of the social investments needed.
Considering that one of our main national hurdles is corruption – CSI funders, trusts, foundations and philanthropists – are advised, and challenged, to follow tested criteria in ensuring that the funds made available by the business world are used to achieve maximum social impact, rather than randomly giving out money to charities.
The fact is: 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 made available by business do, in fact, achieve meaningful impacts, a number of processes should be put in place. For the business, it’s good to partner with a credible organisation which has a focus on managing funds.
In conclusion
Having done this work for the past 18 years means that our organisation has had more than sufficient opportunity to develop the processes that allow us to maximise the positive impact within the Cape Winelands area that funds from businesses can have.
In addition to the ethical and trustworthy management of funds, an organisation should provide extensive support to the various non-profit organisations it allocates funds to.
Through providing capacity building and training, and assisting with strategic planning and guidance, governance and compliance, and the development of suitable systems and processes, partner organisations are given every opportunity to succeed.
Hopefully, the private sector will start to understand that the true measure of success is more than just the bottom line. They should work towards leaving an admirable legacy, even if it’s within the space they operate in as a start.
