Mpadi Makgalo: Social Investment builds trust – and trust wins support

15 April 2014 | Opinion

Companies spend millions on corporate social investment (Social Investment) because being part of the solution to society’s challenges builds trust with key stakeholders – and therefore wins their support.

Mpadi Makgalo

So said Tshikululu Social Investments’ executive: corporate affairs, Mpadi Makgalo, at the Breakthrough Strategies for Corporate Communications Conference, held at Montecasino in Johannesburg on 10 April 2014.

In her address, Makgalo enumerated how companies engage in Social Investment activities, including giving away products to those in need; investing in clean technology, in order to lower their environmental footprint; doing cause-related marketing; donating money from sales; and engaging their employees in non-profit work.

Examples Makgalo gave of companies that do high-profile Social Investment work included:

  • Nedbank and its sustainability initiatives
  • South African Breweries’ responsible drinking campaigns, enterprise development and sports sponsorship
  • Anglo American’s support for enterprise development through its Zimele Fund, and social development via its Chairman’s Fund (which is administered by Tshikululu)
  • De Beers, and its education-related activities
  • Outsurance’s pointsmen, who keep the traffic flowing on Gauteng’s roads

But, she asked, why do companies become engaged in Social Investment?

“Because being part of the solution and shouldering the responsibility in society builds trust with key stakeholders. And trust is what is needed to create support from these stakeholders in the reputation economy,” she said.

Interestingly, while certain sectors need to do Social Investment “in order to earn a licence to operate in that sector”, research done by Tshikululu among top South African business leaders has shown that most – in fact, 84% – “do it from a moral imperative”.

This is where a specialist entity such as Tshikululu – which manages social investments for such clients as Anglo American, ApexHi Charitable Trust, De Beers, Discovery Fund, Discovery Empowerment Foundation, DRA Mining, Epoch and Optima Trusts, the FirstRand Group (including FNB, Momentum, RMB and WesBank), RMB Private Bank anonymous donors, Thebe and the Uti Empowerment Trust – comes into play.

“Corporate social investment, done properly, takes a long view of development and tackles challenges with nuance and in often-complex partnerships with other donors and private and public sector players.

“The specialisations that come through working in this way can be very different to those found in changeable company market positioning, which is always vulnerable to changes in business direction and, critically, in personnel. That is why the decision of our clients to outsource the professional management of their Social Investment is so far-sighted,” said Makgalo.

“At Tshikululu, specialised development sector teams look to the interests of every fund managed, share learnings, emulate successes and avoid pitfalls across the funds. This work happens professionally, with realistic timeframes for maximum project success, in formal and informal partnerships with the state and other donors, and free from the passing fads of funding fashion.”

Click here to view Makgalo’s PowerPoint presentation from the conference.