NGOs, Business as Agents of Social Change

fundraising ngos corporate social investment
Wednesday, 17 February, 2010 - 12:44

Businesses should not view their role in corporate social investment (CSI) as that of backing or supporting the initiatives of others as opposed to playing a proactive role. The generalisation that only grassroots-based organisations, institutions and individuals can be effective agents of social change is baseless and unfounded. Apart from NGOs and other players, good governments can also be agents of social change. In this article, Andile Ncontsa explains that companies should not always look at NGOs to implement their CSI initiatives, as some of these organisations are not ‘closer or better attuned to societal issues than the private sector or government’

The debate on Corporate Social Investment (CSI) continues to raise the issue of where the line is between the responsibilities of government and the role business can play through voluntary social contributions in socio-economic development.

Increasingly social activists are looking to companies to fill, what they perceive as ‘gaps’, a void or failures of state action - particularly in the performance of their public duty and enforcement of a regulatory framework to confine or punish corporate greed. This is leading to a conflict in expectations between what governments should do and what companies can contribute. This conflict has wide implications for all roleplayers.

Paul Pereira’s recent article “Avoiding poverty pornography” in NGO Pulse makes insightful and interesting reading, especially as far as making a differentiation between Corporate Social Responsibility (CSR) and Corporate Social Investment (CSI), but it is flawed in many respects.

Firstly, it associates an imaginary ‘era of crass exploitation of suffering for perceived image and commercial gain’ to products, companies or brands. Quite to the contrary, exploitation of human suffering is the domain and often the sole reason for the existence of NGOs. I have yet to find one NGO that is not founded on one form or another of suffering. We have in Haiti right now, armies of NGOs, not to mention the United Nations, tripping over each other, trying to alleviate the plight of millions of Haitians who have lived in this hellhole of a country for the last 200 years. Seemingly no grassroots-based organisation had noticed that Haitians have been living off “the wayside of life” as he puts it, until now. Why now? Why do we always need to wait for this magnitude of catastrophe before we react?

Secondly, Pereira fails to fully appreciate that profits can actually provide the best planet we can afford. I have just returned from a week long site visit to the countryside of the Eastern Cape and KwaZulu-Natal. Other than a few villages that now have access to electricity, the proliferation of cell phone masts is without doubt, the most effective agent of social change that you are going to find there on any day. I have lived there, and I know first hand what it used to take to move from one village to another - sometimes days. It could literally mean a child not writing an examination. The need to travel long distances on dilapidated or non-existent roads can now be obviated by a “Please Call Me”.

The point I am making is that social change is no longer the domain of one party in the ‘golden triangle’ of private-public-community partnership or CSI versus CSR, just as righteousness is no longer the sole preserve of religion. A business can be an agent for social change by selling products and making a healthy profit. For inspiring business ideas that are changing the way we do business, visit www.springwise.com. There are other countless examples of innovations that make life bearable, behind which, are countless corporations in a web of commerce, that extends deeply into rural villages, where poverty still subsists, creating products that lift millions of souls out of poverty every month, not giving handouts.

Besides, when John D. Rockefeller made his fortune in kerosene in the late 19th century, he caused worldwide demand for whale oil to plummet, in the process, saving the whale from extinction. The solution to the current global warming quagmire this discovery is now causing, is going to be another business or economic-driven solution, not the efforts of the ‘save the planet’ tree-hugging brigade who have not resolved a single cause they have been fighting for to date.

Sustainable business activity is and can be, by itself, a force for social change. Consider the somewhat unpalatable (by western standards) example of one Chinese peasant whose choice is joining a so-called sweat factory, rather than starvation or prostitution. Multiply that by 400 million. That is roughly what China has done in the last 30 years to create a skilled middle class and world economic dominance. Compare that with the dependency that international aid, bad governments and philanthropy has caused in Africa during the same period.

The third flaw of Pereira’s argument, in my view is the baseless and unfounded generalisation of the existence in every society of “organisations, institutions and individuals that are more effective agents of social change at the grassroots than business could ever be”. Good government can be an effective agent for social change too. When Bingu wa Mutharika, President of Malawi came into power in 2004, he made a pledge that he was not going to be a president who goes around begging for food. In a short period, he has moved Malawi from a basket case to a bread basket. What the government did was to double its expenditure on agriculture from 7.4 to 14 percent; scaled up access and affordability of farm inputs using agro-dealers and topped it up with a smart subsidy programme of non-transferable coupons. No NGO!

The fourth flaw relates to Pereira’s notion that, “In CSI, the role of business is a supportive one, primarily about backing the initiatives of others”. What prevents it from being a proactive one? A strange idea seems to still persist in South Africa that people who work in the private sector are from Mars, not from the very same communities from which the social problems persist. If CSI is at the core of business sustainability, as Pereira seems to point out, it follows that it must also be at the core of business strategy and communication, not on the periphery. Like anything else that business seeks to control in its strategy, there is no basis to conclude that in CSI, the role is that of a supporting act.

As Peter Senge in ‘The Necessary Revolution’ points out, the collaboration between Coca-Cola and the World Wildlife Fund (WWF) to tackle water shortages, came about because Coca-Cola managers, not the WWF, realised a business imperative, that “Being more efficient in the use of water is of little good if there is no water”. The notion that Pereira promotes of “business backing the initiatives of others,” results in what Senge calls ‘instrumental relationships’ where people are trying to use each other to get their own goals accomplished. In any event, this notion is impractical if in the same vein Pereira advises that “companies should be careful not to lend their name and image too readily to projects and events over which they have no control”. You cannot insist on controlling what you are merely backing.

I think therefore it is these flaws that limit an elaboration of a more radical approach to corporate social marketing, which is what I was hoping he was going to propose based on the title of the article.

Corporate social marketing is a powerful new strategic approach to communications that uses marketing principles and techniques to drive positive social change, while at the same time building markets for a company’s products and services. This approach requires that all CSI related communication should in itself aim to achieve positive social change. This is what sets it apart from traditional CSI advertising and PR, which involves self-praise and aggrandisement for wasteful philanthropic efforts.

For this marketing approach to have the best impact, it is important that the causes the company supports through its CSI programmes are closely aligned to its core business. By influencing attitudes and behaviours of the same individuals and communities who benefit from the company’s efforts towards positive behaviours, communities develop strong associations with the brand/company that spurred the change. For the company, this leads to increased market share – ‘one hand washes another hand’. Marginalised communities may be poor, but they are not dumb. They know if relationships are not mutually beneficial.

This approach requires having conversations as opposed to one-way mirror advertising, or championing collaboration instead of an ‘us-them’ mentality. As an example, in a high-profile stance against Proposition 8 (which prohibits gay marriages in California) American Apparel released their ‘Legalise Gay T-shirt’ in November 2008. The shirt was originally given to protesters at rallies and marches for free to make a point. It is now so popularly supported, that it has been released for general sale.

As part of furthering the debate, and still confined within CSI, I wish to touch on an unproven theory which is generally accepted as a fact. This theory posits that civil society organisations are the ones closest to the coalface of societal issues and dynamics.

Based on an analysis of the requests that we receive, and the due diligence that we conduct, there is a growing tendency by individuals of low social entrepreneurial ability, limited ambition and skills to set up an NPO or Section 21 company, willy-nilly and for personal gain (which of course they do not refer to as profit). They print a business card, set up a website and claim to be a representative of civil society or an ‘equal partner in the development alliance’.

Equally, some of the more established NGOs and PBOs are not any closer or better attuned to societal issues than the private sector or government. For all intents and purposes, they are just another legal form of business organisation, operating in air conditioned ivory towers for the benefit of a few well-to-do individuals living in gated electric-fenced golf estates – just like their fat-cat cousins in government and business.

A second myth that somehow escapes unchallenged is the notion of equality or even a partnership between an NGO and a business seeking to implement CSI initiatives. This is an illusion. If we are to become anything close to partners, we need to level with each other.

Partnership or equality in this relationship is a misinformed state of utopia that bears no resemblance to economic reality. It does not exist because it does not have a logical economic reason to exist. If an NGO is being paid, and provides a service to government or a private sector company, it is providing it to a client. A sober and unemotional evaluation of this relationship will always prove that this relationship is not different to any of the other service providers in a company’s supply chain.

Lastly, is it not perhaps time that NGOs and NPOs start to define themselves by what they are for and not so much what they are against - government or profit? With impassive and defective labels such as these, we create barriers and resistance and distance ourselves from what is truly at stake. Perhaps with less of a non-this and non-that mentality, we may actually discover that we are each, a partial solution or a partial problem, to our individual and collective efforts in development. To arrive at this - in fact to begin the process - requires an unemotional and critical challenge of our prevailing belief systems.

- Andile Ncontsa is the Head of the Old Mutual Foundation

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