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Economy tight but SA business still invests generously in social projects

27 November 2019 - 12:31 By TimesLIVE
The top three sectors supported by SA corporates are education, social and community development and health.
The top three sectors supported by SA corporates are education, social and community development and health.

Companies spent an estimated R10.2bn on corporate social investment (CSI) in South Africa in 2019.

This is a 5% year-on-year increase in nominal terms (2018: R9.7bn) but flat when taking inflation into account, reflecting a subdued economy.

This is according to findings from the 22nd edition of the annual Trialogue Business in Society Handbook which was launched in Johannesburg on Wednesday.

The report said spending remained concentrated, with the top 100 companies by CSI spend accounting for 68%, or R6.9bn, of total CSI expenditure. Of the R6.9bn spent by the top 100 companies, almost two-thirds was spent by the 19 companies whose CSI expenditure was more than R100m in 2019.

Which companies are most committed

For the first time, this year the retail and wholesale sector accounted for the largest portion of CSI expenditure (22%). “This could be due to the increasing value of product donations,” said the Trialogue report.

The mining and quarrying (previously the largest sector) and financial services sectors were the second and third largest contributors, respectively.

Together, these three sectors accounted for 57% of CSI expenditure in 2019, down slightly from previous years.

Fewer companies reported increased CSI expenditure in 2019

Just over half of all surveyed companies (56%) reported increased CSI expenditure in 2019, down from almost two-thirds in 2017 and 2018.

A quarter of companies (24%) reported decreased expenditure, consistent with survey findings in 2018, and down from 2016 when more than a third of companies reported decreases.

Education continued to receive the most corporate support

Education was supported by 94% of surveyed companies and accounted for an average of half of companies’ CSI spend (50%) in 2019, up from 44% in 2018.

Social and community development remained the second most supported sector and health the third, with 77% and 51% of companies funding these sectors respectively. However, food security and agriculture received a greater average percentage of CSI expenditure (9%) than health (7%) for the first time.

The proportion of companies supporting disaster relief increased significantly, from 28% in 2018 to 41% in 2019. However, only 2% of companies’ CSI funds were directed to the sector.

Environmental causes also saw increased support, from 30% to 38% of companies, and from 2% of companies’ CSI spend in 2018 to 5% this year.

As for the recipients of CSI funding, 90% of surveyed companies gave to nonprofit organisations (NPOs) in 2019. The average proportion of CSI funding directed to NPOs was 54%.

The next most common recipient was government institutions (including schools, universities, hospitals and clinics), which were funded by 72% of companies and received an average of 29% of companies’ CSI expenditure in 2019.

Funding of, and average expenditure on, government departments decreased slightly to 18% and 4% respectively.

The Trialogue Business in Society Handbook 2019 can be downloaded here.