In this blog, we explore the role of corporate social investment (CSI) – financial contributions by companies to social causes, such as education, health, and enterprise development. In some regions, CSI might be characterised as corporate philanthropy or corporate giving. CSI has a long tradition in South Africa and based on our collaboration with South African companies, we offer some reflections on how companies can best leverage their social investments.

In recent years, CSI has become more professionalised and widespread in South Africa, in part because it is included in the government’s Broad-Based Black Economic Empowerment (BBBEE) scorecard. South African companies spent close to ZAR13.1 billion on CSI in 2025, according to Trialogue, a CSI consultancy.

Yet, in the context of broader debates regarding the role of business in a necessary “just transition” that responds to the interlinked problems of climate change, poverty, and inequality, important questions remain regarding the strategic purpose and implementation of CSI.

1) Beware of replacing the state

All too often, CSI aims to fill gaps in public investment by the state. Companies thus become de facto state-like organisations in the provision of vital public services such as education or health. This has a number of important risks and problems. For a start, the long-term sustainability of such public service provision by companies is inherently constrained by companies’ varying fortunes. This is strikingly manifest in mining towns that struggle immensely when the mine scales down or closes.

There is also the risk that “gap-filling” by companies invites the state to step back from its constitutional mandate. For example, local residents near a mining town were told by government officials that they were “children of the mine” and they should ask the mining company for public services, rather than the government. This is not only an unconstitutional abrogation of government responsibility, it also leads to systemic failures because no company can replace the multi-layered public regulation and investment required from the state, ranging from land use planning to bulk services infrastructure.

2) Focus CSI on experimentation and innovation

If providing basic public services is neither an appropriate nor an effective use of corporate discretionary funding for social causes, then what is? The answer is that CSI has the potential to focus more on experimentation and innovation. This is a powerful focus because it addresses a legitimate challenge faced by the state, which struggles to use tax-payers’ money for uncertain outcomes, and it also makes much better use of companies’ comparative advantage in innovation. The idea is for companies to pilot new ways of doing things, which – once confirmed and refined – can then be adopted and scaled by the state or others.

For example, rather than build yet another school or clinic that then ends up under-resourced because the state fails in providing teachers or nurses, CSI programs might experiment with better ways to support teachers or with the distribution of textbooks or medicines, or another of the many immediate challenges faced by communities. Partnering with government in building capacity and unlocking critical resource shortages can also support government to more effectively deliver on its mandate.

This could also involve the establishment of social impact bonds, where CSI is used to establish such a fund, but the state pays for the project if agreed outcomes are achieved. The CSI budget is thus replenished and can be used to good effect as a catalyst in the next innovation project.

3) Leverage CSI for systems change

In identifying opportunities for social innovation, corporate CSI managers can tap into corporate innovation capabilities. There is thus the possibility for CSI to focus on “leverage points” in social-ecological systems that can shift such systems onto more socially beneficial long-term trajectories.

For example, consider the interlinked social problems of youth unemployment and violent crime. Research suggests that many young offenders’ troubles start very early in life and indeed before they are born. A powerful intervention is to provide targeted psycho-social support to pregnant girls and women, who often feel overwhelmed by the prospect of giving birth and becoming a mother in difficult social conditions. CSI managers can identify such opportunities for intervention and pilot effective responses, which can then be scaled up by the state or NGOs.

4) Connect CSI investments to your corporate strategy

Recognising the potential for CSI to experiment and innovate can also help create stronger links between CSI and strategy. CSI funding can develop the investment proposition to unlock larger collaborative or blended investments that generate both social and business returns. For example, Santam (a short-term insurance company) used CSI funding to develop a broader programme to support municipalities to mitigate the risk of disasters including fires and floods. This programme enrols core business resources – such as risk assessment expertise – in reducing disaster risk and damage with benefits for Santam policy holders as well as other community members.

What we have outlined here is an approach to CSI investment that is more strategic and aligned with the broader needs of the context. When companies tick the BBBEE scorecard box to build a school without ensuring that the school is actually performing two years later, they miss the opportunity to contribute to deeper systemic change. Our partner companies note that it is both more challenging and more rewarding to engage in discussion with diverse stakeholders and rightsholders about the complex, systemic challenges to their resilience, and then to experiment, pilot, and innovate in addressing leverage points for positive long-term change.