Economic downturn ups the need for social investment

Conventional wisdom is that because there's less money in the economy and fewer jobs that it's the most vulnerable people - the aged, the young and the homeless - who will suffer most. They will, but not necessarily because they have less or no money.

The harsh reality is that these are people who don't tighten their belts because they are already uncomfortably taut. To survive they often depend on begging enough to buy food, scavenging what they can, either to eat or sell, and depending on social welfare organisations for help when they can't beg or scavenge.

An economy in technical recession won't change this. People will still hand over loose change at traffic lights and there'll still be scrap, cardboard, paper and other items to recycle. The problem is that there'll be many, many more people desperately trying to scrape an existence and the social welfare safety net will be stretched beyond breaking point.

The irony is the social welfare system is much like a redundancy policy. In the good times you keep up the premiums, but when times get tough you're forced to cut back and stop paying - at exactly the time you're most likely to need the cover.

That's what's happening now. Many of the organisations that provide food, shelter, clothing and care for people who have nowhere else to turn now have to contend with dwindling donations, just when demand for their services is most needed.

It's a desperately serious situation. Last year we saw an explosion of xenophobic violence around the country as desperate competition for scarce resources boiled over. We simply can't allow a repetition of this.

The Community Chest has already stepped in to bail out at least one beneficiary that has been doing exceptional and essential work for the last 20 years. It wasn't bad management, poor financial control or over-aggressive expansion that prompted the crisis, just one major funder that cut its social investment budget.

We expect to have to provide more such emergency funding this year.

Cutting back is not an option

In the current economic situation the support we provide our beneficiaries is crucial. We cannot reduce our funding and in some cases will be forced to increase it to ensure that organisations which provide vital services continue to function. Cutting back is simply not an option.

Fortunately due to careful planning and prudent investment we are able to provide this support. But we must also be responsible. We have no idea how long the downturn will last and we are exceptionally aware that donations will decline and we may not be able to rely on our normal fundraising such as events and Give-As-You-Earn to contribute as much as they have in the past.

It's why we're so dependent on our investments and the continued support of big business. Fortunately some captains of industry have realised social responsibility isn't just responding in a crisis - although this too is important. To their credit there are large companies that have known for some time that just ticking the BEE box isn't going to be enough to secure the future for their businesses. They are all too aware that the chasm between rich and poor means we're sitting on a powder keg and that this doesn't make good business sense.

They know that BEE isn't sufficiently addressing the massive inequalities and that the people who queued up to vote 15 years ago aren't yet experiencing the benefits they thought freedom would bring. The so-called freedom generation is even more impatient. They have access to modern mass media, where success is equated with material possessions. They're demanding their share - NOW.

This is the tinderbox that exploded last May and although temporarily under control, it's smouldering, not snuffed. Irresponsible election promises won't help.

Don't cut CSI spend; make it more efficient

In the businesses that realise this, the head of corporate social investment usually sits on the manco - at least. They are the companies where CSI is no longer the preserve of the marketing manager's secretary; where it's being driven by the CEO.

We need more of them, urgently.

It's why when businesses are looking to cut budgets, I'd appeal to them not to think short-term and slash CSI spend. Rather focus on making it more efficient. Organisations such as the Community Chest can help ensure the investment gets to where it's most needed, that it's used effectively and that it's monitored. It's what we've been doing for the past 80 years.

Of course there are also other ways that business can contribute. In-kind donations are always welcome. Depending on the need at the time, these are either distributed directly to beneficiaries or stored so we are quickly able to respond to sudden needs, particularly after emergencies such as fires of floods.

They can also lend expertise. The Community Chest has a proud tradition of volunteerism, with many of our events and programmes such as Carnival, the Twilight Team Run and soup kitchens being run almost exclusively by volunteers. Between events we also have plenty of need for accountants, HR practitioners, marketers, lawyers and others whose expertise is invaluable to us and our beneficiaries.

Just over 80 years ago business played a significant role in founding the Community Chest to invest in social welfare organisations to counter the worst effects of the Great Depression. As the events of the last few weeks have shown, the need today is immense and the role of business will again be crucial.