Dec 9, 2021

Mawazo Writing Africa

Writing about the main

Poverty levels show as companies boost support for food security initiatives

The direct impact of Covid-19 on the social investments of companies in South Africa can be seen in the increased support for initiatives for food security and community development.

This emerges from the CSI consultancy Trialogue , who said on Thursday that companies in South Africa spent an estimated R 10.3 billion on social investments (CSI) in the last fiscal year, a 7% drop in real terms from R 10.7 billion in 2020.

Education was again the most popular reason to support, averaging 39% of CSI spending. However, this was significantly less than the average spending of 50% last year, due to increased support for food security and agriculture (10%, down from 7% last year) and disaster relief (9%, down from 4% last year) .

Social and community development was the second most supported sector (17% of CSI spending) and for the first time food security and agriculture were the third most supported sectors.

“The vast majority Majority of companies have changed their sector allocation, with most moving into food security, agriculture and disaster relief, which shows the direct impact of the pandemic on sector spending, “said Trialogue Director Cathy Duff.

Less than half of the CSI expenditure (47%) was allocated to projects with a national presence.

Gauteng was the most supported province in 2021 (57% of companies had projects in the province that averaged 21% of corporate CSI spending). It was followed by KwaZulu-Natal (supported by 45% of companies) and the Western Cape (supported by 39% of companies).

Non-profit organizations are the most popular recipients of CSI funding, > with 87% of companies directing an average of 53% of their expenditures to NPOs in 2021 (slightly less than in the previous year). An average of 28% of NPO revenues that year came from South African companies.

Schools, universities, hospitals and other government institutions were supported by 71% of the companies, with 24% of CSI spending going to them .

Covid-19 responses – and job losses

This year, one of the priority responses to Covid-19 was ensuring the health and safety of employees (99%), customer protection (81%) and philanthropic contributions to Covid-19 specific responses (80%), in line with 2020 results.

Companies have mainly changed CSI programming by adapting existing programs to cope with the effects of Covid-19 (65%) or reducing programming in response to Covid-19 (31%). One positive result is that more than half of the companies expect the increased cooperation experienced last year to continue (57%) and 45% of the companies expect the increased consultation between donors and beneficiaries to continue.

< p> Trialogue’s estimate of total CSI spend is based on analysis of data from sources including financial results from 201 companies, CSI information from 121 JSE listed companies and data of the SA Revenue Service.

The surveyed companies were large, more than two thirds (67%) had an annual income of more than R1 billion and more than a third (38% ) an income of more than R10 billion. Forty-two percent of the companies employed more than 5,000 people, 17% more than 20,000 people.

The strained economy of SA was a warning sign for the researchers.

“An alarming development is that the proportion of companies that lay off employees or do not renew contracts (22%) and inform suppliers about force majeure (13%) has doubled compared to 2020 “, says Trialogue.