These days, social responsibility is the phrase on every CEO’s lips. There is growing pressure for businesses to be involved in the upliftment of their communities. However, the money does not always have the impact that it could, largely because it is often invested ineffectively.
A recent Human Sciences Research Council survey shows that corporate philanthropy in South Africa stands at roughly R5 billion a year, while individuals give an estimated R12 billion from their own pockets. It is clear that there is no shortage of generosity or funds, yet things are not getting substantially better for the poorest of the poor.
Until funding is channelled effectively, the struggle to alleviate the country’s socio-economic problems will persist. There may be more money available for non-profit organisations (NPOs) than ever before, but it generally flows to big, well-connected organisations, while crucial, grassroots non-profits working at the coalface of poverty lose out.
To deal with this problem, GreaterGood South Africa launched the country’s first social investment 'stock exchange' in June 2006. The South African Social Investment Exchange (SASIX) – www.sasix.co.za – helps level the playing field by giving small, pioneering NPOs the same access to funds and capacity development as the bigger, better-known causes.
Projects from 10 priority development sectors are listed on the website as investment opportunities with a primarily social return. Projects range from helping communities to care for AIDS orphans in KwaZulu-Natal, to business skills training for crafters on the fringes of the Kruger National Park – covering every major area of social development in the country.
All projects undergo a rigorous evaluation process before they are listed on the exchange, to make sure that donor funds are used in the best way possible. SASIX aims to help potential givers become highly effective social investors and gives donors the option of setting up their own Giving Foundation – a personalised charitable fund which can be set up as a family, individual or business.
Projects go through an intensive assessment process and each one gets an overall risk rating which includes:
- Concept – the project’s approach to addressing an identified need
- Design – the use of effective and proven methods
- Capability – the organisation’s leadership depth and expertise
- Control – transparency, governance and financial management
- Sustainability – lasting impact
- External – factors outside the organisations control
Since its inception, SASIX has channelled more than R13 million into 53 social development projects. The exchange is currently one of three international finalists for the Global Development Network’s prestigious Most Innovative Development Project Award.
To qualify for SASIX funding projects must:
- Be specific, time-bound development interventions which address an identified need within a community
- Be run by South African registered NPOs
- Have definable and measurable outcomes that have a clear impact on the lives of disadvantaged people
SASIX does not fund individuals, general running costs or projects which promote discrimination or a particular religious or political viewpoint.
In October last year, GreaterGood SA launched a new platform – SASIX Financial – in partnership with Cadiz African Harvest Asset Management (CAHAM), a Financial Services Board approved and regulated financial services provider. SASIX Financial was developed in response to the pressures faced by people and organisations in the developing world, and is a groundbreaking new investment platform in the world of Socially Responsible Investment (SRI).
The motivation was the enormous savings pool that exists in South Africa – around R3 trillion in largely life and pension funds. Of this, only an estimated R10 billion is dedicated to socially responsible investing. South Africa is lagging behind international trends in the use of commercially viable, responsible investments for pension fund portfolios. In light of this, SASIX Financial goes beyond purely social returns, combining investment return imperatives with sustainable environmental, social and corporate development.
Through SASIX, SASIX Financial and its other initiatives, GreaterGood SA hopes to guide corporate and individual donors from a compliance mentality of ‘tick-box’ or ‘feel-good’ giving, to a more strategic and measured approach. Their message is clear: funding needs to strategic, sustainable and effective.
Roxy Mitchell is the heads up the media portfolio at GreaterGood SA. For more information, please call her at +21 21 794 6801. Organisations interested in applying can email firstname.lastname@example.org for an application form.