African Business Leaders: Choose the right CSI Model
Business leaders often complain to me that they receive more requests for donations, sponsorship or other financial contributions than they know what to do with. Most of these requests have nothing to do with their core business and it can be difficult to decide who to help. The answer is to adopt the right CSI strategy and model for your business — one that maintains a focus on meeting real needs and creating measurable change, and sends a clear message about what you stand for.
In my last article, I touched on some of the models you could choose, including philanthropy, socio-economic development and Shared Value. This time I want to go into greater detail on these approaches — how to use them and how to deliver the greatest impact for the community and value for your business. We develop customised approaches for companies in my CSI Masterclasses© for business leaders, but here are a few ideas you can think about now. Let’s use the example of Aduane Pa again — our Ghanaian company processing and packaging fresh fruit from local farmers for sale in-country and for export: -
1. Philanthropy
I have written before about African companies and established traditions of giving to those who are less fortunate. This can be done through voluntary cash or in-kind donations to a particular organisation or cause — otherwise known as philanthropy. In addition to donations, companies sometimes engage another organisation to implement a specific project on their behalf or even set up their own foundation.
Philanthropy is a very straightforward way of helping to address social and economic challenges. It can quickly promote good corporate citizenship and help build a positive reputation for your company (in some countries there are even tax benefits). But think carefully about choosing the right themes and projects to support. Philanthropy can be well-suited to your personal giving, as the company’s Founder or CEO, but that may not sit comfortably with your corporate responsibility. What if the CEO of our company, Aduane Pa, chooses to support a local sports academy that he and his family already support? While the cause is important, it really doesn’t meet the greatest needs in Aduane Pa’s local community, such as sustainable income generation and job creation. It also misses the opportunity to help with the company’s own challenges, such as varying fruit quality and supply.
2. Socio-economic development
Far better, perhaps, to align your CSI activities to your business drivers and the expectations of your stakeholders on significant social or economic issues at a local or national level. Socio-economic development is driven by a combination of community needs, government development plans and business drivers. You can engage an organisation to implement a project on your behalf, or work with other companies in your sector or with like-minded organisations. Partners can provide funding and/or in-kind help, including training, materials or professional services. Growing local capacity and capability for the long-term is, as a wise friend said to me recently, ‘growing the pie instead of simply consuming more of the same size pie!’
Aduane Pa wants its supplier farmers to grow and produce high-quality fruit in a way that minimises adverse environmental impact and can help increase its market share, brand loyalty and visibility. Sustainable income and job creation are important to the local community, but it’s a nationwide problem too. The company has already been thinking about a fund to help establish more local farms and farmers, and to introduce farmers to better farming techniques and technologies. This will help to secure high-quality future supply as the business expands. The company could also take a leadership role by establishing a national, sector supported fund to support the growth of farming, or work with other fresh fruit processors to improve food hygiene standards.
3. Shared Value
Some companies look to solve social problems through their profit-making core business or through impact investing. The focus is their business model and meeting local needs by designing products or services that are linked to the company’s future growth. It avoids the issue of CSI activities being seen as non-core internally, though the focus on business drivers can also be seen as falling short of making a voluntary or broader social contribution.
Aduane Pa might decide to differentiate its business by only processing and packaging fruit in the area in which it is produced. This will support local employment, but it will also cut transportation costs and ensure maximum freshness. It might develop a new line of affordable fertilizers to enable local farmers to increase yield without resorting to further deforestation. It might invest in a female-run business that supplies sustainable packing materials, supporting local small enterprise and minimising Aduane Pa’s own environmental impact.
Knowing what is important to your business provides you with the scope to say yes or no to requests for help, and can help to guide your employees on what matters most. You may end up selecting a combination of models, and that’s okay as long as you don’t overstretch your budget or dilute your impact. Naturally, I would love to hear your thoughts, ideas and success stories.
In my next post, to be published on 7th April, I will suggest how adopting a Corporate Diplomacy mindset and culture can boost business delivery and risk management.
Click here to learn more about Kina Advisory’s CSI Masterclass©
Rosalind Kainyah MBE is the Founder and Managing Director of Kina Advisory, working with companies to ensure they have positive socioeconomic impacts on the countries in which they operate, while realising optimal financial value. She has advised companies across various sectors, including energy (conventional and renewable), oil and gas, mining, private equity, financial services, healthcare, agriculture, consumer goods, real estate, manufacturing, logistics, chemicals and technology. Ms Kainyah is a non-executive director of CAL Bank Limited, Ghana; a board member of Results for Development (R4D); vice-chairperson of the Africa Gifted Foundation; founding president of the Ghana chapter of International Women’s Forum; and sits on the Advisory Board of Invest in Africa.
