Defending Corporate Social Investment in charities in South Africa

Future World Giving

President Jacob Zuma addresses the Broad Based Black Economic Empowerment (BBBEE) Summit at Gallagher Convention Centre in Midland. (Photo: GCIS) from GovernmentZA via Flickr

The following open letter from CAF Southern Africa’s CEO, Colleen du Toit was first published in Business Day on November 6th 2013. I think that readers of the Future World Giving blog will be interested to read Colleen’s response to cynicism about the role that South African business is playing in redressing the wrongs of apartheid and in particular her role that charities play in tackling the most pressing social issues.


I am not sure where Braam Malherbe obtains his information (Who is taking a rake-off from your charity?, November 4) — if indeed his extraordinary set of assertions and generalisations is based on any evidence.


The article attacks the corporate social investment (CSI) due-diligence practices of business, suggesting that as companies are careless about the governance of CSI, some of this investment is going into the coffers of “the murkier for-profit organisation”. As no specific examples are given, one is left to contemplate an unsolved mystery.


However, more damaging are the assumptions Mr Malherbe makes about what he calls neglect by corporate South Africa: “It is in many instances failing the community by not applying those same stringent criteria of accountability and transparency to charity organisations that it supports through financial donations and investment.”


The purpose of the organisation I lead is to encourage all forms of giving and CSI to strengthen the work of the nonprofit sector. We work closely with many of South Africa’s largest companies and I can assure Mr Malherbe that our clients practise the strictest standards of due diligence in their CSI.


I suggest to Mr Malherbe that he obtains just one or two current integrated or sustainability reports produced by “corporate South Africa”.


With the advent of broad-based black economic empowerment legislation [standards designed to promote social transformation used in the awarding of government contracts], industry sector charters [sets specific targets within each industry] and the King 3 corporate governance guidelines in South Africa, and the global focus on Corporate Social Responsibility, large companies are obliged to manage their CSI investments as prudently as any other activities.


The final, but most serious, issue I take with Mr Malherbe’s views is about what he terms the “charity industry”. The proud reputation, critical social development role, and positive achievements of our civil society (or nonprofit) sector stand to be tarred with the same corrupt brush as the mysterious “murky for-profits” within the wide sweep of his judgments. While it is a sad reality that corruption is now evident in all sectors, it is simply irresponsible to imply that, due to the purported neglect of corporate donors, every nonprofit becomes an investment risk. Without this sector’s vital contributions in myriad vital areas, South Africa would be greatly impoverished. During this time of economic uncertainty, withdrawal of international funding and questionable functioning of state funding institutions such as the lotteries, it behoves all who recognise and understand the vital contributions of civil society to build public trust in the sector and its work.


Colleen du Toit
CEO, Charities Aid Foundation Southern Africa

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