MAVERICK CITIZEN

Covid-19 will throw a spanner in the works for corporate social investment

By Ufrieda Ho 25 October 2020

The blow to the corporate sector in loss of earnings and growth 'cannot be overestimated' and Covid-19’s full impacts need to be anticipated. (Photo: Gallo Images / Foto24 / Nelius Rademan)

Covid-19’s impact will strike charitable funding, but building trust, flexibility and stronger partnerships may prove that a crisis is exactly when donors should invest more, not less.

“Blood on the floor” – it’s a description of corporate South Africa haemorrhaging as the full impact of Covid-19 and lockdowns are being measured. It will have an inevitable knock-on effect for the future direction of corporate social investment.

Dr Jonathan Bloomberg, global head of the Discovery Group’s Health Insurance and the response and health lead for the national Solidarity Fund, used this imagery when he spoke at a Tshikululu Social Investment online conference on 22 October.

Bloomberg said the blow to the corporate sector in loss of earnings and growth “cannot be overestimated” and its full impacts need to be anticipated.

“Corporate SA is under huge pressure. Many of the larger and medium-sized companies in South Africa are robust and I don’t believe we will see a huge number of collapses, but we will see real struggle.

“As companies batten down the hatches they will be less expansive, they will spend less and one the victims of this will be spending on corporate social investment,” Bloomberg said.

It’s a gloomy picture but the response to the crisis of Covid-19 is also offering  reflection and lessons to be learned. The shake-up caused by the pandemic is an opportunity to rethink and reshape how almost every sector of society responds to crisis and emergencies and where gaps of resilience need to be closed.

Positives Bloomberg pointed to are a shifting focus to recognising health investment and support for the health sector as the bedrock of society. This is a government level, workplace level and even at a household level.

“There is a sudden surge in interest in health and health issues. It’s taken decades to get the message to government but Covid’s legacy has been to land the message that there is an intimate link between health and the macro economy,” he said.

Bloomberg said trust, generosity and collaboration are other positives from the local Covid-19 response.  The Solidarity Fund, he said, has enjoyed public, corporate and philanthropic trust because its board of volunteers is drawn from a range of sector representatives, is high level and have collectively committed to managing the fund (that currently stands at R3.12-billion) with an emphasis on transparency and solid governance.

He added that centralising funds has been important to avoid duplication, to target interventions strategically and to prop up public-private collaboration, especially in failing provincial health departments that he said “are woeful”.

Nicolette Naylor of the Ford Foundation spoke about the need for boldness in a time of crisis. The Ford Foundation did the opposite of cutting back on funding and instead doubled their annual global budget to $1-billion around the world.

“We also quickly realised that we are missing a global response to Covid and if anything the lessons we are learning is that  pandemic has touched on the silos that we organise ourselves in. We really have to better global and regional solidarity and we need to be more flexible, to be more coordinated and to find the right partners to work with,” she said.

Boardroom decisions are sometimes far removed from the realities NPOs’ deal with at coalface. Dr Imtiaz Sooliman, founder of disaster relief organisation Gift of Givers, says Covid-19 has made it clear that the CSI and donor funding landscape need harder reflection and re-organising.

Good partnerships, Naylor said, allow for a convergence of areas of expertise and experience. 

Good partnerships again come down to trust. She said that when this is in place it can streamline bureaucracies, speed up grant-making and getting interventions in place.

The NPOs themselves have also had to adapt to surviving in a time of Covid. Dipalesa Mpye of Tshikululu Social Investments unpacked some of the results of their annual NPO partner survey at the conference. They surveyed 179 organisations in the early months of lockdown.

Mpye confirmed the bleak realities that 66% of organisations experienced a decline of income with the expectation that the situation will worsen. Also, only 58% of the organisations had applied for public relief funding.

But Mpye said that 40% of organisations reported that they were able to work out more flexible arrangements with their donors including a relaxation on certain conditions, repurposing or diverting funds and postponing stipulated requirements.

“What has been encouraging is that the majority of the NPO partners had adapted well to working remotely and even though they said they expected the next 18 month to be tough, 61% of them said they were confident that there would be opportunities to chart a way to recovery after Covid,” she said.

Mpye also a crisis is not the time to pull out of CSI irresponsibly that comes with putting the most vulnerable in society even in more precarious situations. “Risk is inherent even in social investment,” she said.

Boardroom decisions are sometimes far removed from the realities NPOs’ deal with at coalface. Dr Imtiaz Sooliman, founder of disaster relief organisation Gift of Givers, says Covid-19 has made it clear that the CSI and donor funding landscape need harder reflection and re-organising.

“We thank the corporate sector but they also need to be able to trust that we are the experts in what we are busy saving lives – we are not there to fill in a report or to wait for months for a signature for approval,” he said.

He called out donors and funders that are out of touch when they insist on certain donations and interventions be channelled to their hospital or region of choice.

“They don’t realise that this causes duplication and can go to save lives elsewhere,” he said.

He also said the organisations like his have on-the-ground expertise and an understanding of how interlinked issues are. Covid-19 he stressed, has also been about responding to hunger, job loss and even the impact of drought in provinces like the Eastern Cape.

His point circles back to partnership, trust and flexibility. These are at the heart of better decision-making, effective response strategies and building to have lasting impact and to save lives. DM/MC

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