CSI and social justice: towards partnership with northern donors?

South African corporates have traditionally shied away from investment in human rights and social justice programmes. In this feature article, Colleen du Toit and Gerald Kraak from the Atlantic Philanthropies propose co-operation between northern donors and local companies to enhance the impact of mutual investments in addressing the country’s enduring inequalities.

Local companies should move beyond enlightened self-interest and narrow corporate social investment and join with northern donors in advancing human rights and social justice. A radical contention? We argue ‘not’. Such a partnership makes good business sense, and it would improve social cohesion and enhance the standing of the corporate sector as an agent for positive change.

Our social fabric is unravelling

Much has been achieved in South Africa since the advent of democracy in 1994, including political stability, sustained economic growth, a burgeoning middle class and delivery on housing, access to water, electricity and other services. Yet, 13 years into democracy, South Africa remains a deeply divided society, as evidenced in high unemployment and a widening gap between the wealthy few and the poor majority. Under the multiple strains of the HIV pandemic, violence against women, and increasingly against children, as well as rising crime, our social fabric is unravelling.

Despite a progressive constitution and a legal framework that provides for comprehensive social protections, many of the poorest and most marginal in society have yet to access these rights and services. Government’s difficulties in making an impact on some aspects of poverty and inequality are well known; lack of skills and capacity and sometimes lack of political will are significant obstacles, as uneven delivery and the annual failure to spend budgets on key services demonstrate. But for the first time since the anti-apartheid struggles of the Eighties, there is now growing social unrest around insufficient service delivery. None of this is good for democracy; nor in the long term is it good for doing business, attracting foreign direct investment and for continued economic growth.

How do funders respond to these conditions?

Significant resources have been mobilised to address these issues. In addition to government spending, overseas development aid (ODA) allocations mostly channelled through government amount to about R1.7 billion per annum, while private northern donors contribute about R615 million to development projects each year (State of Social Giving in South Africa Research Report, 2005).It is notable for our argument that local corporates are the largest contributors to development work, providing about R2.8 billion annually as estimated by Trialogue in 2006 in the form of CSI spending across ten development sectors.

We contend that co-operation between northern donors and the CSI sector has the potential to have much greater impact than government in some areas. Multi-sectoral partnerships between northern donors, companies and non-profit organisations (NPOs) could tackle problems in a more focused and strategic way. Were northern donors and local companies to combine forces and resources, they could make larger and more long-term impacts. The R2.8 billion CSI allocation could be an even more formidable resource if waged strategically in this way.

Beyond enlightened self-interest

There are very few examples of collaboration between the CSI sector and northern donors. With some exceptions, most companies have invested in their own backyards to the benefit of their employees and the communities in which they live, or in less immediate, high-end infrastructure such as tertiary education and health. Over the last ten years, The CSI Handbook has tracked CSI spending in ten development sectors. While budget sizes have changed, the largest portion of the overall CSI spend typically goes to education and the smallest to housing. There is, however, very little CSI funding currently invested in human rights and social justice initiatives.

We believe that in the light of the very generous CSI funding available, some investment should be made by corporates in initiatives that assist poor and vulnerable communities to access those rights and services that are their due. The time has come for a more imaginative approach, for thinking outside of the boxes inherited from the past. The time is also ripe for the business case for CSI to evolve, both in substance and approach, and to move beyond enlightened self-interest. This evolution should encompass human rights and social justice.

A social justice approach

It is perhaps useful, here, to define more clearly what we mean by human rights and social justice. In wielding the term human rights, we refer to the socio-economic rights vested in the South African Constitution and legislation, which entitles people to social justice and access to their rights. Because legislation is often not yet properly implemented, and there is poor delivery in many parts of the country, poor and marginalised people are not part of the socio-economic transformation of the country for which the Constitution provides.

Atlantic Philanthropies therefore supports organisations mostly NPOs which aim to help the poor and marginal to access the rights and services due to them. Typically, our support is for organisations which carry out research on social and economic problems, lobbying and advocacy for redress,campaigns,legal advice and support to poor people to access their socio-economic rights, mediation with government departments to improve service delivery, and finally where all else fails, litigation to force the State to comply with its constitutional and legal obligations.

There is nothing revolutionary in all of this. Our work underpins the intentions of the Constitution the covenant of a democratic South Africa. South African business can make a vital and path-breaking contribution to ensuring that this convenant is upheld. Our argument is that CSI could do this in collaboration with northern donors and, where appropriate or possible, with government, forming a ‘tripartite alliance’ for positive change. Our approach is one of creating social partnerships, co-operation and mutual accountability to build strong and effective programmes.

Why should CSI respond and how?

The CSI sector could significantly enhance both its social relevance and its strategic business value by including human rights and social justice within its purview. This investment should take place within a strategic and co-operative paradigm, adopting ‘accountability’ as an overarching principle. In line with Bonbright and Batliwala’s definition, we see accountability as respect for the perspectives and rights of all constituents in the development process, and as an important step in advancing the larger human project of creating more democratic, equitable and just societies.

South African corporates are certainly much more involved in responsibility beyond profit than in the past, but it seems to us that these initiatives are often still regarded as something separate from both the marketplace and the socio-political arena. As Michael Porter points out: “Philanthropic initiatives are typically described in terms of dollars or volunteer hours spent, but almost never in terms of impact” ( Harvard Business Review, December 2006).

It is now widely accepted that successful companies assume a role in contributing to the sustainable development of society. This is illustrated in South Africa through such mechanisms as the SRI Index, an initiative of the Johannesburg Stock Exchange to measure the ‘triple-bottom-line’ performance of listed companies. A further important means toward social equity through business is Black Economic Empowerment (BEE), now legislated through an Act of Parliament and codified in various sectoral charters as well as the Department of Trade and Industry’s BEE Codes. In the words of Women’s Investment Portfolio Holdings (Wiphold) CEO, Wendy Luhabe: “We are experimenting with the spiritual transformation of capitalism, shifting the emphasis from greed to enlightened self-interest, from elitism to economic democracy, from the fundamental doctrine of profit at any cost to a conscious capitalism that espouses money and morals.”

Yet support for social justice does not appear in the menus of many CSI programmes. In a recent article published by the Global Equity Initiative at HarvardUniversity, Christa Kuljian observes that in spite of the fact that corporate giving is one of the largest sources of funding for civil society in South Africa,” … companies remain reluctant to work with the most marginalised, promote their voice and support advocacy campaigns.” Even innovative initiatives such as Anglo American’s HIV/Aids programme focus on service delivery and not policy reform.And organisations that advocate for policy change are minimally supported by corporates. The Treatment Action Campaign, for example, relies almost solely on international funding to support its vital work.

Strengthening social justice frameworks

As we have pointed out, CSI funding is usually spent in local communities on issues such as education, health, housing and sport. These are important issues. We are not suggesting that they are not supported. But we do suggest that in the face of ongoing global conflict, vulnerability of populations, and intractable poverty, corporates work with international funders and the NPOs which they support, to strengthen social and economic frameworks for social justice and political and economic stability.

In his book Development as Freedom (2001), Economist and Nobel laureate Amartya Sen, argued that: “Development requires the removal of major sources of unfreedom: poverty as well as tyranny, poor economic opportunities as well as systematic social deprivation, neglect of public facilities as well as intolerance … Despite unprecedented increases in overall opulence, the contemporary world denies elementary freedoms to vast numbers perhaps even the majority of people.”

Sen’s work is important for our argument because he envisions a role for business beyond the ‘profit motive’. Sen emphasises that successful operation of the exchange economy depends on powerful systems of values, norms and trust. However, he argues that despite its effectiveness, the ethics of capitalism are limited, particularly with regard to economic inequality and environmental protection. The enormity of challenges such as these leads Sen to stress the need for co-operation between sectors. He emphasises that the market economy could flourish further through development of ethics and practices sensitive to eradication of inequality.

Corporate South Africa has much to gain by supporting organisations promoting human rights and social justice. These organisations perform a vital social function, the success of which benefits all sectors, including business. Their advocacy for legislative change, women’s and children’s rights, legal recognition of gay people, the homeless and refugees, would not be possible without funding. Long-term and systemic social equity, for which human rights organisations stand, also happens to be the best environment for business. The assumption that social and economic objectives are separate is a false dichotomy: business operates to maximum efficiency in stable and peaceful societies. The civil society sector, and in this case those human rights organisations committed to ensuring access to justice, cannot operate without financial support. It is time for CSI to step up to the bar here:international funding will not always be available.

A rights-based approach to CSI practice

CSI strategies that include support for human rights and social justice can be guided by instruments such as the United Nations Declaration on Human Rights, and the South African Constitution, and in particular the Bill of Rights. These provide for basic human and socio-economic rights, greater accountability on the part of all societal sectors, a greater stress on empowerment, participation and non-discrimination, and attention to vulnerable groups.They stress that rights are inalienable, universal, non-negotiable, indivisible and inter-dependent. Rights-based approaches can, in fact, be useful in planning the entire CSI strategy. According to Dzodzi Tsikata, rights-based approaches:

•Ensure enhanced accountability,

•Focus on structural injustice rather than short-term relief,

•Target specifically the vulnerable, such as women,

•Show that people have agency, can drive change and are therefore not passive recipients of development funding,

•Promote institutional change rather than charity,

•Encourage collective action and alliances rather than individual efforts.

A rights-based approach can provide guidance in laying down CSI strategies, and in turn help business legitimacy and credibility. CSI funding, alone or combined with other funding, has distinct advantages in the human rights arena because it is more flexible and could take on urgent issues more quickly when necessary.

Co-operative structures are the way forward

We suggest that networks that include civil society organisations, international funding agencies and corporates could be created in support of social justice initiatives. These would potentially combine the creativity of people and organisations in developing communities, the energy and expertise of capital, and the prior developmental experience of international funders. Such collaborative approaches are far more likely to result in stronger and more effective programmes to the benefit of all.

The Atlantic Philanthropies is a private foundation that has programmes in seven countries. Its mission is to bring about lasting changes in the lives of disadvantaged and vulnerable people. In South Africa, Atlantic spends an average of $42 million (R294 million) each year on human rights and social justice. Contact Gerald Kraak and Colleen du Toit, tel: 011 – 880 0995, email: g.kraak@atlanticphilanthropies.org or c.dutoit@atlanticphilanthropies.org.