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STRENGTHENING NPO SECTOR

FUNDING & SUSTAINABILITY

TARGET GROUP: BUSINESS & NPOS

NELSON MANDELA BAY

CORPORATE SOCIAL INVESTMENT (CSI)

BREAKFAST &

WORKSHOP

VENUE: LA COLLINE COUNTRY ESTATE DATE: 31ST OCTOBER 2014

TIME: 07H30 – 14H00

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1. Introduction

In light of the changing funding world and turbulent economic environment, sustainability is a challenge

for most NPOS in Eastern Cape and around the globe. The key challenge for the sector therefore is to

devise sustainable mechanisms that allow them to diversify their funding bases suitable to their

organisations.The threat to the NGO sector has led the Eastern Cape NGO Coalition to develop a

Provincial Corporate Social Investment (CSI) Programme for the Eastern Cape. The ECNGOC officially

launched a donor’s forum in 2014 and has conducted a series of dialogues to capacitate and innovate

other ways to source funding.

The Eastern Cape NGO Coalition (ECNGOC) is a representative and membership organisation established

in 1995, with more than 700 member organisations in Eastern Cape. The ECNGOC lobbies and advocates

with and behalf of our member organisations on socio economic issues affecting the nation. The

ECNGOC focus (2014 – 2017) is “An integrated response to the triple challenge – poverty,

unemployment & inequality”.

In addressing the Vision 2030 – the Triple Challenge – Poverty, Unemployment and Inequality the

ECNGOC is of the view that collective voice, collective action and collective outcomes will contribute

significantly in changing the development landscape and improving the lives of the masses of the EC

population. Therefore the ECNGOC is a key proponent in championing both the Eastern Cape Anti

Poverty Strategy as well as the Eastern Cape Development Plan. Both of these strategies have been

endorsed by the 5th Provincial Administration in the State of the Province Address (SOPA) 2014 and are

founded on social mobilisation with people at the centre of their own development. In addition a key

strength of the strategies is the multi stakeholder approach to addressing development within the

Eastern Cape.

In strengthening the NPO Sector the ECNGOC focuses on 3 critical areas. Therefore the key focus areas

during the period under review are: The first focus area is strengthening the NPO Sector – Legislation

and Compliance. The Eastern Cape is characterised as predominantly rural and is made up of a total

population of 6,6 million people with 10 382 registered NPO’s as per statistics released by the National

NPO Directorate, of which almost 73 % remain non compliant to the NPO norms and standards as per

the NPO Act of 1997. The Eastern Cape continues to remain among the 3 highest Provinces in the

country in terms of the Human Poverty Indicators. The second key focus area is a shift in the

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Development Trajectory in the Eastern Cape from a “needs based “to an “assets orientation” to

development. The model that ECNGOC promotes, termed as “Assets Based Community Development

“(ABCD) is being championed as an innovative approach in enhancing planning processes and

strengthening meaningful public participation. The third key focus area is Sustainability of the NGO

sector with a key focus on community philanthropy (giving for agency) as well as exploring the

Corporate Social Investment (CSI) space.

Therefore the purpose of engaging a multi agency approach is to analyse the “shared value “approach in

business and how shareholder interests can also address developmental goals. A key starting point for

ECNGOC has been donors, partners and well as the different Chambers of Business.

As a result the ECNGOC has a goal of seeing the Eastern Cape as a destination for funding which will

ultimately transform the lives of the masses of our people, ensuring a better quality of life for all.

2. CONTEXTUAL ANALYSIS

The eight Millennium Development Goals (MDGs) – which range from halving extreme poverty rates to

halting the spread of HIV/AIDS and providing universal primary education, all by the target date of 2015

forms a blueprint agreed to by all the world’s countries and all the world’s leading development

institutions. They have galvanized unprecedented efforts to meet the needs of the worlds poorest.

South Africa in its 20th year of political transition is still facing the challenges of poverty, inequality and

unemployment. According to a report by Statistics South Africa (StatsSA), it is estimated that 45% of

South Africans are still living in poverty in post-apartheid dispensation. This goes on to show that almost

21 million citizens are living below the poverty line, which is less that R422 per month. Majority of the

poor are situated in the rural areas and the Eastern Cape and Limpopo being the most poverty stricken

provinces of South Africa. The Eastern Cape remains one of the most poverty stricken provinces in South

Africa. Stats South Africa, reported that the population of South Africa in July 2011 was 50.59 million,

and approximately (6 829 958 people) 13.5% of the population were living in the Eastern Cape. The

province of Eastern Cape only contributes 7.5% of the GDP of South Africa (Stats SA, 2011). It is

predominantly rural. South Africa is struggling with food insecurity, ill health, poverty, unemployment

and crime.

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The Planning Commission released a National Development Plan (NDP) in 2011. The plan sets two

targets, namely, to eliminate poverty and reduce inequality by 2030. The diagnostic work that formed

the basis for the plan found that the major challenges South Africa face is the high rate of

unemployment and the poor quality of education for the majority of people (IAPS). The National

Development Plan (NDP) plan clearly articulates a vision for the country, The Triple Challenge – Poverty,

Unemployment and Inequality. The key drivers in achieving good governance are: Strong Leadership,

Good Governance, and Active Citizenship.

In this Province, the Eastern Cape Planning Commission was established in April 2012 to facilitate

development of a comprehensive long-term plan – Vision 2030. In drawing up the vision, the ECPC has

been engaging with social partners to develop a broad alliance for a sustainable, multi-generational

future. Vision 2030 will thus chart the direction for our collective journey towards a qualitatively

different and better future. The Diagnostic Report of the NPP has revealed that the core of all the

challenges faced by the Province is the “ Alienated Human Condition “ , in simple terms People are not

at the centre of their own Development. The Eastern Development Plan is available.

3. CSI EVENT (BREAKFAST & WORKSHOP)

IMPORTANT NOTES FOR BUSINESS TO CONSIDER

Partnerships

Migration to Strategic CSI

Shared value approach

Multi sector collaboration

Tri-sector partners ( public / private / society)

Sharing , learning and reflection platforms

3.1. Background

In responding to the Triple Challenge of Poverty, Inequality and Unemployment which requires the

involvement of both organised sectors as well as the active citizens the ECNGOC intends to address the

sustainability challenges faced by many NGOs as a result of the global recession. This economic

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downturn has forced many NGOs to either close down or drastically reduce operations which in our

view can create a social catastrophe in the Eastern Cape. In strengthening the NPO sector which serves

as a key mechanism ( 10 382 NPOs) for social service delivery the ECNGOC work aims to strengthen

sustainability of the NGO Sector by shaping the funding space. In assessing the sustainability threat to

the NPO sector it is clear that sustainability goes far beyond funding or money , its looks at product

differentiation , innovation , shift in positioning of the NPO Sector to adapt to these changing

circumstances. Therefore the ECNGOC in partnership with ABSA, Eastern Cape Socio Economic

Consultative Council (ECSECC) and the Nelson Mandela Bay Business Chamber organised a dialogue that

was themed “Migration to Strategic CSI.”

3.2. CSI Breakfast (Programme Attached)

Programme Facilitator (Rooks Moodley, Director – ECNGOC)

Theme “Migration to Strategic CSI “(invite attached)

Opening Remarks

“Business cannot succeed in a FAILING Society “forces a Migration to Strategic CSI. The key focus of the

breakfast session is the “Shared Value “approach and how does one satisfy business interests while at

the same time meeting developmental goals.

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Welcome – Kevin Hustler (CEO, NMB Business Chamber)

In his welcoming remarks Kevin expressed his excitement for the initiative as well as the partnership on

which this CSI dialogue platform is being built. He also shared the Chambers Initiative with the Nelson

Mandela Civil Society Coalition and the impact in terms of addressing critical issues facing the Nelson

Mandela Metro. Kevin indicated that he looks forward to the outcome as he is unable to stay for the

duration of the vent due to other commitments.

Purpose - Andy De La Mare (CSI Manager – ABSA)

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Why are we here?

Andy focused on the partnership and applauded the fact that 4 partners were on board in planning this

event. He also stressed the importance of cross sector collaborations. This platform also provides re

opportunity for learning, sharing and reflections and provides an opportunity to strengthen levels of

awareness on CSI.

Why do we do CSI?

Shareholders’ interests (targets) versus community investment. There has to be a reciprocal relationship

between business and society. The SA grant makers still remains one of those institutions that provides

opportunity for learning and sharing. We also need to create a CSI Community of Practice. The need for

CSI multi sectoral partnerships are also key. The issue of the tri – sector partnership is becoming more

and more critical.

Key Note Address – Nick Rockey (CEO, Trialogue) – Presentation attached

Nick indicated his appreciation for the invitation and his excitement to be part of this CSI breakfast. The

key focus area of the presentation is “Migration to Strategic CSI. “ The CSI spend in the 2013 financial

year has been 8 billion of which under 10 percent was allocated to the Eastern Cape. A total of 3, 5

billion of the 8 million was distributed to the NPO sector. The analysis of the 7 percent allocation to the

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Eastern Cape must also be seen in the light of spending patterns , spend is higher where there is

business footprint. The main focus areas are Education and then Social and Community Development.

There has also been significant collective spend. It must also be stressed that development issues are

complex. There is also a lot of exposure to executive interference which shapes the funding flow of CSI

spend. There is also subjection to both corporate agenda’s as well as corporate compliance.

The notion of Strategic CSI to meet Corporate Interests?

Strategic CSI addresses societal issues. The shared value model reflects on the following:

Puts social responsibility ahead of profits in order to make money

Developmental CSI

Strategic CSI

Charitable grant making

Commercial grant making

All of the above versus social benefits.

Social benefits Dimensions

Beneficial impact

Beneficial outcomes

Visible outputs

Launched Strategic CSI Award

Fickleness of CSI Investment

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Nick reflected on CSI becoming more strategic in his concluding remarks. He stressed the importance of

being proactive rather than reactive. CSI in support of brand recognition (e.g. We Care). Many of those

interested in CSI would say I am not really interested in the CSI conversation but we just want to help.

DISCUSSIONS

Enterprise development and understanding BEEE codes

Focus should be on value chain versus supply chain

Government spending collaboration with business and other sectors will increase

effectiveness of spend

CSI and Enterprise Development? Are they different and how they affect the score card?

The need to conduct needs assessments –companies fund differently

Proactive funding ( create awareness)

Mature partners create easier access and better funding flow

The breakfast session concluded with emphasising the value of partnerships and appreciating

the investment made by the speakers to shape the thinking on “Migration to Strategic CSI.”

3.3. CSI Workshop

Facilitator – Gary Koekemoer

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Opening Remarks

The workshop was a follow up from the breakfast and is aimed at how the Nelson Mandela Bay

can look at integrated and collaborative efforts to strengthen CSI while at the same time

respond to the Triple Challenge of Poverty, Inequality and Unemployment. The commonality is

that “true value lies in its people. “

Speaker 1 – Margie Keeton (presentation attached)

Key Characteristics and success factors – effective Social Investment

Margie shared the history of CSI which went as far back as the 1970’s. There has been loads of

collaborative history; South Africa is ranked strong as a social actor. The context of CSI cannot

be ignored which focuses on global business realities. Some of the key topics include CSR,

Corporate Citizenship, Sustainability, Sustainable development and the triple bottom line.

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A focus on the definition of CSI was well articulated. The 4 key pillars were also cited:

Governance, Research and Strategy, Partnership and monitoring impact.

A case study of how the De Beer’s Chairman’s fund developed was also shared and key lessons

were highlighted.

Margie concluded with a very critical question of where do we go from here?

Speaker 2 – Irna Senekal (presentation attached)

Understanding impact

The key phrase was pressure to measure. The focus was on the purpose for evaluations,

investment versus outcomes, accountability and accumulating lessons.

Irna also focused on key definitions that highlighted economy, efficiency and effectiveness.

She concluded with thinking around is impact or evaluation important for us and why?

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DISCUSSIONS

Designing a collaborative tool for monitoring and assessment

How do we set up a community of practice for CSI

Critical reflection on why other initiatives have not worked

Partners to engage and catalyse the process

Collaboration of CSI initiatives

Ongoing Learning , sharing and reflections

CSI Mapping Exercise – NMB

Possibility of a structured working process

Way forward

After a lengthy discussions of various possibilities the following was agreed upon

DETAILS TIME FRAME PERSON RESPONSIBLE

1. Develop a report

outlining key actions

20/11/2014 Rooks to compile report and

circulate

2. Task Team set up 31/10/2014 Rooks to create database and

circulate report

3. Task Team 10/12/2014 To analyse report outcomes

and develop an action plan for

2015 and communicate with

broader group

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4. Partners/ Speakers 12/12/2014 Partners to engage on

strategic areas for 2015 and

engage speakers for technical

expertise.

Conclusion

A vote of thanks was done by Andy and expressed deep appreciation for the partnerships, the

speakers and the attendees and look forward to implementing the key outcomes from the CS

breakfast and workshop. The general feeling is the room was that the passion and drive for CSI

has been reignited and shaped to shift towards “Migration to Strategic CSI. “

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