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The benefits of impact investing for corporate CSR strategies 

by Justin

South African NPC, Colours of a Kind, highlights the importance of investing in social businesses for corporates.

The evolution of buying habits has seen a shift to more conscious spending by consumers across the world. A recent report highlights that 85% of consumers view a brand more positively when it supports something they care about, with a substantial 92% wanting to buy a product that supports a cause.[1]

With the heightened awareness of consumers, and the needs of underserved communities, more and more brands across the country are incorporating Corporate Social Responsibility (CSR) into their mandates and supporting social businesses that work to alleviate economic, societal, and cultural challenges.

One such social business is Colours of a Kind, an NPC (non-profit company) that provides an opportunity for women from disadvantaged communities to learn the skills needed to work in sustainable merchandising, with a goal to boost employment opportunities, encourage entrepreneurship and promote financial independence.

“Corporate social responsibility is not only a duty of brands and businesses, but an opportunity for companies to make a positive impact on society, earn the trust of their customers, and build a sustainable future,” emphasizes Jackie Vorster, General Manager at Colours of a Kind.

Whilst the benefits for recipients of CSR initiatives is undisputed, there are a multitude of benefits for corporates looking to invest financially, physically, or mentally into social businesses:

Financial Benefits

By supporting registered NPCs and certified PBOs (Public Benefit Organisation) through investment or donations, corporates can benefit from 18A tax-deductible receipts for SARS up to a maximum of 10% of taxable income. 

In addition, and through the different elements of B-BBEE, companies are encouraged to play their part in the upliftment of black communities by working with Small, Medium and Micro Enterprises (SMMEs) and Non-Profit Organisations (NPOs). “As a level 1 B-BBEE contributor, Colours of a Kind provides our corporate investors with an affidavit confirming that the beneficiaries of our programmes are 95% black female South Africans so that their contributions can be applied to Socio-Economic Development (SED) budgets”, says Vorster.

Reputational Benefits

CSR initiatives can help businesses build a positive reputation in their industry and with their customers, leading to increased brand loyalty and customer satisfaction. By demonstrating a commitment to social and environmental issues, businesses can earn the trust and respect of their customers, who are increasingly looking for companies that align with their values. 

Furthermore, by investing in NPCs and PBOs corporates are able to build a reputation as a responsible business, which can, in turn, lead to a competitive advantage. Companies often favour suppliers who have responsible policies, since this can reflect on how their customers see them.

Community Upliftment

Employees are often more engaged and motivated when they feel that their work is making a positive impact on society. By driving community upliftment through CSR initiatives, businesses can uplift and empower previously disadvantaged communities.  

Vorster adds: “At Colours of a Kind, we give corporates the opportunity to operate in a sustainable community development model where they partner with us in social business. Their business-as-usual empowers and uplifts women from underserved communities and builds income streams. As example, tote bags previously ordered from a standard factory can be locally produced by us and that order will benefit the women we support immensely.”

From contributing to positive social change to building brand reputation and engaging employees, investing in social businesses can be a win-win for both companies and the communities they serve. As such, companies should consider incorporating non-profit investment into their CSR strategy to achieve their social responsibility goals and promote positive change in society.

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