JOHANNESBURG—March 13, 2025—For South African businesses, implementation of the country’s corporate social investment (CSI) regulations is slowly evolving from a tick-the-box compliance exercise to a commitment to achieve lasting social and economic benefit. Six specific practices are leading the way, according to a new study by The Bridgespan Group titled, Delivering on the Promise of Corporate Social Investment in South Africa.

To encourage businesses to participate in the country’s socio-economic development, the South African government passed the Broad-Based Black Economic Empowerment (B-BBEE) Act in 2003. The act created a set of practices that strongly encourage CSI to enable meaningful participation of Black people in the South African economy as well as to support community development, education, and poverty alleviation.

As South Africa marked its 30th year of democracy in 2024, this milestone offered the Bridgespan team an opportunity to reflect on how well CSI has fulfilled its intended contribution to the nation’s social and economic development. As they assert, CSI is not just a regulatory framework. It’s also a mechanism for uniting corporates and nonprofits in a mission for social and economic transformation.

Amid this scenario, Bridgespan set out to learn how CSI expenditures – nearly 13 billion rand (US$686 million at the current exchange rate of R18.94) in 2024 – can achieve lasting change. Bridgespan’s research included interviews with three dozen corporate, NGOs, and social sector leaders and identified six approaches corporates have taken to evolve their CSI initiatives from transactional (focused on compliance with B-BBEE regulations) to transformational (focused on lasting change in people’s lives):

• Build trust as the cornerstone to productive relationships: Without trust, CSI gets stuck in a transactional rut that restricts funding and impedes the work of the nonprofits that CSI initiatives support.
• Fund nonprofits’ administrative costs and capacity building: In addition to funding programme costs directly attributable to a specific project, funding for administrative support and capacity building can build nonprofits’ financial stability and overall effectiveness.
• Establish commitment from corporate leadership: When CSI becomes a leadership priority, corporates are more likely to invest in recruiting and retaining experienced CSI managers who can implement transformational programmes.
• Balance business expertise with community needs: This creates “shared value,” a win-win where funder and recipient benefit. A bank, for example, may tap its expertise in consumer finance to meet a community need for financial literacy.
• Collaborate with other funders – businesses, philanthropy, and government: Collaboration can range from informal networking and knowledge sharing to more formal efforts that pool money and structure partnerships to achieve specific results.
• Invest in impact measurement to learn and improve: Data is more than just a tool for reporting or auditing. It’s also a tool for learning and decision-making to maximise the impact of CSI initiatives.

For most interviewees, these approaches are a work in progress, according to the report’s authors. Getting them right takes time and effort. But they represent a way forward for businesses on how to make CSI compliance and real impact work in tandem.

Read the full report: https://bspan.org/4bNiq0j

The authors extend special thanks to Cathy Duff and her team at Trialogue who, as the research partner for this work, provided valuable input to the research design and supported fieldwork as a CSI sector thought leader. The team also extends gratitude to Khethiwe Nkuna, chief executive officer at SkillQuest, for her insightful review and contribution to this report.
 

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