The CSI sweet spot
Businesses don’t exist in isolation. A growing awareness of this has led to corporates investing in their communities through corporate social investment (CSI) initiatives.
CSI is a way for businesses to serve a goal beyond the profit motive. The goal is simple: to make society better.
And the world is full of worthy causes. For corporates to support a worthy cause the CSI manager must separate the wheat from the chaff. And in so doing they seek to find the CSI sweet spot.
The sweet spot
This investment sweet spot may be different from one business to another, yet there are a few general criteria likely to hold pride of place on the CSI manager's checklist. These criteria range from the non-negotiables of 'good governance' and 'alignment' to the CSI-holy-grail of self-sustainability.
Alignment is important. Put simply, this means the purpose of the chosen non-profit organisation (NPO) beneficiary should be closely related to the business' core function or fall within the area of concern the company has determined will have the greatest social benefit.
Good governance is easy to define and demonstrate. It implies there are sufficient checks and balances to ensure that CSI funds are put to the intended use.
Reporting, continuous communication, and the high quality of board members all promote good governance.
CSI managers are also drawn to projects that define outcomes, and that measure results – independently. Proof of benefit is expensive, but it’s critical if we are as a CSI community to become more competent and effective.
An NPO’s ability to demonstrate the potential for self-sustainability is, however, possibly the most important draw card for CSI funding.
The infinite benefit
Why is self-sustainability such a big draw card? The reason is simple: once the NPO becomes self-sufficient the CSI's social upliftment return becomes infinite. In this manner, a little can go a long way.
The benefit of this scenario is two-fold. Not only does the corporate benefactor reap a return from the specific NPO, but it's then able to divert funds to other worthy causes. Thus, the total social impact return on investment multiplies exponentially. This is good for the CSI manager; the corporate benefactor and society as a whole.
To the experienced CSI Manager, all this may seem too good to be true. Yet, there are real world examples of such NPOs, with a real shot at self-sustainability. In such cases what is needed is a hand-up – not a hand-out.
Richard Dixon, Chairman of Forest Farm Centre, couldn’t agree more, “Forest Farm is one of the few care facilities for severely afflicted adult Cerebral Palsy (CP) patients. We have seen financial contributions dwindle over the years as families can no longer afford the necessary care, and as corporates spend their CSI budgets on narrower and narrower causes. CP just isn’t as ‘sexy’ as other sectors.”
Despite this the NPO hasn’t given up the hope of realising self-sustainability. It has plans in place to achieve this goal in about seven years through an annuity driven income stream.
In the interim, Forest Farm must continue to support its residents, but the specialised care its residents need comes at a price. Fundraising to cover immediate costs remains an imperative.
Donations are needed, not only to support Forest Farm on its journey to self-sustainability but also to enable it to make meaningful donations to its outreach programmes.
Forest Farm's plan for self-sufficiency is clearly defined. All it needs is an investment boost to help it bridge the gap.
The organisation can demonstrate it has the winning formula for self-sustainability. All it needs is a short term funder to balance the equation.
Get in touch with us and we can take you through our winning formula.
Contact Deon Smith - firstname.lastname@example.org