Originally published 16 May 2023.
How often have you asked your accountant to give you a breakdown of the donations account at year end, to determine which ones were to the benefit of black people, so you can claim them for SED points on the B-BBEE Scorecard? If at least 75% of the beneficiaries are black, then those donations are SED initiatives and they earn you B-BBEE points, right? The correct answer is: “maybe”.
While donations fall squarely within the definition of CSI, it is dangerous to assume that all CSI initiatives which benefit black people are SED initiatives. CSI contributions are not necessarily SED contributions.
Corporate Social Responsibility (CSR)
This refers to the responsibility of an enterprise to the environment in which it operates, taking into consideration profits, people and the planet. It is connected to the culture of the enterprise, its ethos and the way awareness of its environment manifests in how it operates.
Corporate Social Investment (CSI)
Corporate Social Investment is what happens when CSR takes action. While CSR is an all-encompassing term, CSI refers to the actual initiatives being implemented. CSI does not generate profit but benefits the community and environment. Initiatives may include contributions of time, money, skills or expertise.
Socio-Economic Development (SED)
Socio-Economic Development is an element of the B-BBEE scorecard and is embedded in B-BBEE legislation. SED seeks a positive, sustainable economic consequence for beneficiaries. The purpose of contributions must therefore be to facilitate income-generating activities or sustained access to the economy.
The importance of CSI cannot be over-emphasised. It supports spiritual wellbeing, animals in need, fire prevention, nature conservation and many other worthy causes, but it does not necessarily qualify as SED.
When an initiative addresses a person’s participation in the economic environment, that is when we see SED in action.