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By Brendan Peacock | Sep 29, 2009 | COMMENTS [ 0 ]

A CRITICISM of some Corporate Social Investment (CSI) initiatives is that they lack focus, are not fully accountable for money spent and do not really address the needs of the communities they are aimed at.

A CRITICISM of some Corporate Social Investment (CSI) initiatives is that they lack focus, are not fully accountable for money spent and do not really address the needs of the communities they are aimed at.

One of the best ways to ensure sustainable results from CSI spend is to help small businesses get off the ground and overcome the daunting challenges all start-ups face. By assisting and mentoring SMMEs, larger organisations can have a direct impact on communities through the knock-on effects of employment and socioeconomic upliftment.

Despite recessionary conditions and economic uncertainty, larger organisations are finding ways to boost the small business sector - either through financial assistance or the temporary provision of high-level skills at no cost.

Three budding entrepreneurs walked away with R100000 each in cash at the finals of the Eskom Small Business Investment Awards.

The finals were held recently at a gala event in Johannesburg and hosted by the Eskom Development Foundation. The three businessmen, from the agricultural, manufacturing and services sectors, also received a trophy each and an Entrepreneur's Development Course sponsored by the University of Johannesburg.

The winners, from KwaZulu-Natal, North West and Free State, also won the right to exhibit their products and services at the Eskom Small Business Expo at Gallagher Estate in Midrand - an event where 100 small businesses have the opportunity to network with thousands of potential customers from big business.

Haylene Liberty, chief executive of the Eskom Development Foundation, said: "The two major challenges these people face are cash flow and marketing. In many cases they are unable to source funding from retail banks because of their qualifying criteria. Having restricted access to cash flow impacts on their ability to market their products and identify customers."

Through the Eskom Development Foundation's policy of providing grants to purchase materials and equipment to small businesses rather than loans, and then monitoring the use of the grants, the foundation ensured that the businesses were sustainable.

"Sustainable small businesses are the future of this country," Liberty said. "They currently contribute about 50percent to South Africa's GDP. With help this could grow to the 90percent level, which is common in most developed countries.

"They are also major employers and have over the last 10 years employed more people than the formal sector. What the winners have in common is a commitment to training and development of others - a vital function in growing employment."

Carl Ballot of KPMG said though times were tough, international trends show that larger companies are still committed to CSI initiatives.

"Inter-company cooperation is the new trend in CSI because now that companies don't have much money to throw around they're looking for ways to put their own skills to good use. That is, companies - even competitors - get together to find synergies so that they can achieve more without duplicating the resources offered to small businesses."

Ballot said KPMG's CSI strategy had always been to do what the company does best.

"By ourselves we would be limited to certain skills. But when we find partners and add other skills to the formula it can be incredibly effective.

"Over the last two years we have partnered with Absa in an enterprise development and mentoring scheme. Absa has a broad database of small businesses that are their clients, and they have a good understanding of the market sector.

With this access to the market, once the small businesses have been identified, we can step in to provide mentoring for survival during and after the recession, dealing with tax, BEE compliance issues, financial management and other skills."

According to Ballot more than 200 small businesses received help during a one-day workshop.

"We understand that CSI needs to be sustainable and not patronising, which can happen if it is applied to the incorrect market. So far we think the inter-company cooperation model is good and we will see more of it in South Africa in the near future.

Active engagement is important, not just cheques. This is partly because we want our employees to be actively involved - it helps to share the experience of giving."


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