Trends in corporate giving

The Business in Society Virtual Conference 2020 was opened by Trialogue Director Cathy Duff, who welcomed delegates from South Africa and other parts of the worldDuff presented trends in corporate giving and some findings on the early impact of Covid-19 on CSI funding and programmes, and what this could mean for the outlook of CSI in South Africa. 

According to Trialogue’s 2019 research, estimated CSI expenditure was R10.2 billion in 2019, with the largest 100 corporates accounting for approximately 70% of this amount. Retail and wholesale, mining and quarrying, and financial services were the top three contributing industries. 

Over half of companies (56%) reported an increase in CSI expenditure in 2019, compared to two thirds in 2017 and 2018. A further 20% of companies said their CSI expenditure had remained the same, while 24% said it had decreased in 2019 compared to the previous year. Trialogue expects CSI expenditure to increase in 2020 due to the response to Covid-19. However, in the year following that, it is expected that CSI spend will decline as the impact of Covid-19 on the economy filters through to lower corporate profits. 

In 2019, only 6% of CSI was non-cash (or goods), which is most likely an underestimation as many corporates donate goods and services. The most supported development sector in 2019 was education – supported by 94% of corporates and receiving an average of 50% of expenditure. Social and community development was the next supported sector, receiving 15% of average CSI expenditure, followed by food security and agriculture (9% of expenditure) and then health (7%). 

Corporates were most likely to support projects that spanned two or more provinces, with national projects receiving an average of 38% of CSI expenditure. Gauteng was the most supported province (21% of expenditure), followed by the Western Cape (10%) and Kwa-Zulu Natal (9%). NPOs were the main recipients of CSI in 2019, with 90% of corporates directing an average of 54% of CSI expenditure to NPOs. Corporates were also the largest source of NPO income, with an average of 29% of NPO income derived from companies. 

Some of the results from Trialogue’s Business in Society Handbook 2020 research on the early impact of Covid-19 on funding and programmes were presented. One quarter of companies reported that they had increased CSI funding as a result of Covid-19, while 21% had decreased funding and 4% had stopped funding altogether. Of the non-profits surveyed, 15% reported an increase in funding levels. These were mostly NPOs in the food security and healthcare sectors. One-fifth of NPOs reported a decrease in funding levels, while one-quarter reported that all funding had stopped. 

In the snap poll, 57% of delegates (comprised of companies and NPOs) reported a decrease in funding levels while only 16% reported that their budgets had increased. Ten percent said that all funding had been put on hold. Almost one third of corporates (30%) reported reduced programming as a result of Covid-19, while one quarter had adapted their programmes due to the pandemic. Four percent of corporates had halted their programmes. Results from the NPO survey indicated that one-quarter of NPOs had experienced reduced programming, 35% had adapted their programming, and 18% reported that programmes had been halted. In addition, 71% of delegates said they had adapted their programming while 18% said they had increased programming. In general, there appears to have been a decrease in funding to the NPO sector, yet an increase in demand. 

Sectors supported by corporates during Covid-19 were food security (64% of corporates) and healthcare (60%), with 60% of corporates donating to the Solidarity Fund. 

Trialogue has devised a Covid-19 decision-matrix that splits the response to Covid-19 into three phases: 1) short-term reactive phase; 2) mediumterm “adaptation phase and 3) long-term building phase. Many corporates shifted funding outside of their focus areas to respond to the crisis. While this was entirely appropriateTrialogue recommends that in the long-term phase corporates continue to align their CSI to their core business and competenciesNPOs should similarly continue to work within their core competencies. 

For further details on the 2019 BIS Handbook research, refer to https://trialogue.co.za/publications/  to download the full copy. Look out for the 2020 BIS Handbook for the 2020 research results and analysis to be released on 26 November 2020. 

Written by Rebecca Mhere

2020-11-09T10:22:00+00:00 November 9th, 2020|Business in Society 2020|