Social investment is much more than writing a cheque

Last edited: January 25, 2010

Posted by Business and Arts South Africa

Article written by Katy Chance

Source: Business Day
To visit Business Day online click here.

Carolynne Waterhouse, who headed Rand Merchant Bank ’s (RMB) public affairs department for 11 years and chairs the RMB Fund, and Yvette Nowell, the RMB Fund facilitator, talk so animatedly and passionately about corporate giving, social responsibility and volunteer programmes that it’s sometimes hard to keep up. However, in the spirit of a company that doesn’t believe in too many corporate tiers and a level playing field in terms of collegial respect, they never interrupt or talk over each other.

RMB has been going for 31 years and, says Waterhouse, from the beginning has always understood that “one can’t be a happy, isolated island in a tidal wave of despair ”.

As trite as it sounds — and so much can sound trite to cynical ears when it comes to SA’s corporate social investment — the company’s founding payoff line essentially became its business philosophy.

“Our payoff line is ‘traditional values, innovative ideas’,” says Waterhouse. “Being a good corporate citizen speaks to the ethics of any business. But back in the early days of RMB, ‘CSI’ didn’t have a name — there wasn’t anything codified in terms of corporate governance. We simply knew that a great business helps build a great country, and corporate giving, which was embraced by the public affairs department, is part of a company’s role in civil society.”

Nowell heads the merchant bank’s considerable CSI fund, and like most corporations, its commitment to social investment is non-negotiable, recession or no.

As charitable as such funds are, RMB “lives in reality”.

“Everyone made less money last year,” says Nowell. “But contributions still have to be made — we have a commitment to give, mostly to multiyear grants; we can’t just walk away during a bad year.”

The greater FirstRand Foundation, of which the RMB Fund is a member, has a R70m investment and its interest is used to honour forward commitments to CSI projects when the 1% net profit after tax required allocation falls below expectations. “Last year, profits were down so we had to access the capital,” says Waterhouse. “There is simply no way our long-term commitments will be compromised. We have rainy- day provisions and understand that we will top this up during the good times.”

The RMB Fund concentrates on four main areas: maths leadership and development; arts, culture and heritage; the environment and conservation; and nongovernmental organisation leadership mentoring.

The maths support is an obvious tie-in for a bank. “Maths is part of our core competence,” says Waterhouse. “For the FirstRand Foundation’s 10th anniversary the South African Maths Education Chairs initiative was initiated to improve maths proficiency in SA. RMB provided R10m; the FirstRand Foundation another R10m; and the Department of Science and Technology, with whom we have a good relationship, has committed extra funding and resources to the programme.”

The programme selected eight suitable universities and is facilitating the employment of maths professors (chairs) with academic, research and teaching skills. In five years, they hope the programme will show a significant improvement in maths performance in the partner schools and, vitally, that the model will be reproduced in other schools.

“It’s a constant shock to me when successful projects are not replicated,” says Nowell. “You hear of a gem of a project in KwaZulu-Natal or Limpopo, for example, but what is learnt there isn’t carried forward. I don’t understand why the government sometimes does not recreate projects that get it right!”

In terms of the arts, Waterhouse says “the nation throbs with rhythm and creativity, yet we seem to battle to convert that strength into understanding that the arts can create employment. Overseas they recognise the arts as a commodity; that the art of business is also about the business of the arts.”

Despite what Waterhouse calls the “redemptive value” of music as well as its obvious entertainment value, the business world still underestimates the value derived from the arts and doesn’t understand how to leverage it.

RMB’s 2007 partnership with The Magic Flute, directed by William Kentridge with an all- South African cast — many of them brought back from countries where they had become stars — is a case in point. While the financial return on such a project is limited or zero, the social returns, as with almost all CSI initiatives, are immeasurable.

RMB concentrates its arts support on music and dance, hence its major involvement with the Starlight Classics concerts and the Apollo Music Trust, headed by well-known impresario and conductor Richard Cock, who scours the country for young, untapped talent — then taps it.

The Starlight Classics concerts have been going for 11 years and comprise an Afrosymphonic mix as a performance showcase for talent sometimes nurtured by the trust — for which performance the musicians are always paid.

“We always pay our way,” says Waterhouse. “We helped them get to this level of proficiency and professionalism — it’s only fair we pay them!”

RMB has long been involved with Basa — Business and Arts SA — and Nowell won the Basa Barloworld Artworks Mentor of the Year Award last year for her work with the Valued Citizens Initiative. The project involves using visual arts as teaching tools and an outlet for citizenship training.

“Many school-going children are heads of households,” says Nowell matter-of-factly. “Through the programme they use visual art as a way of rising above their situation and expressing their stories. Almost a form of art therapy.”

But the corporate giving doesn’t begin and end with a multimillion-rand fund. “Giving is not restricted to a CSI ‘division’,” says Nowell. “We have a volunteer co-ordinator who works across every division, in conjunction with the FirstRand Volunteers Programme, and many ideas and projects with which staff want to get involved are encouraged and supported. Through RMB’s huge staff volunteer programme, people can give back, partly on company time. “The ‘costed’ time spent — say, helping build a house — is then matched by the company, and that money goes towards the project wish list. So the project gets the time, energy and the money.”

The company channels all the ways people can give. Some do something tangible, pass on their own skills set; others, perhaps whose core competence is making money, prefer to give money. “There is no pressure on the amount given, whether time or money, and it’s often anonymous,” says Nowell.

Last year, when employees felt the pinch as much as corporate bottom lines, RMB garnered an impressive R1m from employee donations and matched funding. The recession was a bit of a spring clean, says Waterhouse; a time when “we all had to get back to basics and learn to build again. And learn that we still have to honour commitments, whatever the economic climate.”

This pervasive custom of giving may sound too good to be true, but Waterhouse maintains it’s simply part of their corporate culture and that “the majority are happy to knuckle down ”. If they’re not happy about it, I get the impression they may have to lump it. But then cynicism can be pervasive too. “People know from day one, or even before they join, that this culture permeates every level of our business,” says Nowell. “It’s part of the company’s orientation process!” So nobody can feign ignorance.

But as Waterhouse puts it, you don’t just throw a cheque at a project. “That makes you feel good — but the community on the receiving end isn’t helped beyond the lifespan of the cheque.” Doling out cash may be the domain of charitable works; making sure it is put to good use is what defines corporate social investment. The money flowing into projects is a necessity but is also just a first step. If it’s not a precursor to skills transfer, mentoring and self-sustainability, it’s a pointless exercise.

This is a mantra I’ve heard from every social investment fund manager I’ve spoken to. But few companies have an entire staff complement so fully and personally committed to volunteering and skills transfer.

“Transformation is often seen as a big, scary word with a variety of interpretations,” says Nowell. “But it’s as simple as sitting down, working patiently with someone with the desire and skills either to teach or learn. It’s just about passing on the baton.”