Why Siloed Social Investment Is Costing South African Corporates More Than They Think

South African organisations are channelling millions into CSI programmes and still struggling to move the needle when it comes to lasting, systemic change. There are numerous reasons for the gap between CSI spend and social impact, but one of the most significant challenges the sector faces is fragmentation.

Fragmented social investment is not a new concept, and its meaning in the social impact sector is twofold. In South Africa there’s a focus on external fragmentation: public sector bodies, corporates, and civil society organisations all working in parallel. These entities are working furiously to tackle pressing social challenges. A key reason, among many, that their impact doesn’t reflect their efforts is a lack of cross-sector communication and collaboration. Less-discussed, however, are internal silos. These are fragmented efforts that take place across different departments with little communication or understanding between them. This fragmentation is common, and it’s costing South African corporates millions.

Corporate social investment rarely lives in one place. A company might run a Corporate Social Investment (CSI) programme through its foundation. They might create Enterprise and Supplier Development (ESD) programmes to meet B-BBEE scorecard requirements. Their Socio-Economic Development (SED) contribution is managed separately by procurement. The Environmental, Social and Governance (ESG) function is prioritised and strictly monitored by investor relations to ensure reporting is up to scratch. These are just a few of the corporate social investment levers at play and they’re being pulled in different directions by scattered goals and strategies.

Each department has its own budget, its own implementing partners, its own key performance indicators, and its own impact narrative. They are all, ostensibly, working towards a better society. But they aren’t seeing results. This is internal siloing, and it’s structural rather than a failure of effort or intention. Understanding why it happens, and what it costs, is the first step towards doing something about it.

Identifying Internal Siloing in Social Investment

To understand the problem, it helps to map the terrain. Most large South African corporates operate across several distinct social investment levers, each with its own regulatory or strategic driver:

CSI (Corporate Social Investment) is typically discretionary spend directed at community upliftment, education, health, or other social priorities. It’s often managed through a foundation or a dedicated CSI team.
ESD (Enterprise and Supplier Development) is a B-BBEE scorecard requirement focused on developing small and medium-sized enterprises (SMMEs), particularly those owned by black South Africans, to grow and become suppliers to the corporate.
SED (Socio-Economic Development) is another B-BBEE element, distinct from ESD, focused on contributions that benefit communities or previously disadvantaged individuals without a direct commercial return to the company.
ESG (Environmental, Social and Governance) sits at the intersection of investor reporting, regulatory compliance, and reputational management. It increasingly governs how social impact is disclosed to external stakeholders.

These are just some of the key social investment levers corporates use to create social change. Others include EV (Employee Volunteering) and BBOs (Broad-based Ownership Schemes) which also play a key role in advancing social impact strategy. All of these moving parts have different origins, different compliance drivers, and, in most companies, different managers. They make up a portfolio of social investment activities that adds up to significant spend on paper but were never designed to work together.

The cost of internal silos

When you don’t have a coherent, strategic framework the cost of internal siloing accumulate in financially and strategically significant ways.

Duplicated efforts and wasted spend

One of the most pressing issues is financial. When departments are operating independently, there will always be duplication. They often contract implementing partners in the same geography for overlapping purposes, sometimes without knowing the other programme exists. Beneficiaries may be reached by the same programmes and counted separately by each, inflating apparent reach without increasing actual impact.

Inaccurate reporting and poor decision-making

Finance teams find themselves reconciling multiple different budget lines with multiple different reporting formats, none of which produce a coherent picture of what the company’s social investment is collectively achieving. Boards and executives can’t make informed decisions about spend allocation because the data doesn’t tell a cohesive story or allow for comparison.

Impact that communities can’t feel

What happens when a corporate is investing significantly in a host community but different programmes run independently? Programmes with no shared vision and no coordinated theory of change mean outputs not outcomes. Consider a company that wants to create a pipeline of graduates from its surrounding community into its own organisation. It builds a school through its CSI department. But there are no qualified teachers, no equipment, and no after-school support. Children can’t learn in an under-resourced building, the matric pass rate is low, and the tertiary pipeline never materialises.

The same company also runs unrelated programmes in the same community through different departments. These disconnected efforts mean that investment does not match community impact.

Knowledge that walks out the door

There is also a human capital risk: if one person holds all of the knowledge and partner relationships in a programme these leave when they do and that synergy is lost. The next person introduces a different mandate, relationships with implementing partners shift, and silos become more entrenched. You’re starting from the ground up, costing you precious time and resources. A coherent, well-managed framework centralises this knowledge.

Why siloed social investment is structural

Most companies did not set out to build a disconnected social investment portfolio. CSI, ESD, SED, and ESG each arrived in response to a different pressure, at a different moment, and landed in whichever department was best placed to absorb it at the time.

Usually companies are missing a unifying theory of change. Many organisations have a strategic plan and a mission statement. Far fewer have a theory of change (ToC). A mission statement tells you what you ultimately want to achieve. A strategic plan tells you what you are going to focus on. A theory of change tells you how your specific activities connect to your outcomes, and how you’ll know when you’re reaching them. Without one, programmes can share a mandate without sharing a direction. Departments are measuring success in completely different ways, against completely different benchmarks, with no way of knowing whether the sum of their efforts is greater or less than its parts.

What internal integration actually looks Like

Integration doesn’t mean dismantling existing programmes. It means designing programmes to work together rather than alongside each other.

A company investing in education, teacher development, and youth livelihoods in the same community is not automatically doing integrated work. Integration happens when those three programmes share an impact goal, are designed with deliberate handover points between them, and measure their collective contribution rather than their individual outputs. The teacher development programme creates the conditions the education programme needs to succeed. The livelihoods programme catches the graduates that the education programme produces. Each team is doing different work as part of an ecosystem where each programme reinforces the other.

How to Move Towards Integrated Social Investment

Moving from fragmentation to integration starts with understanding what you already have. It means getting the right people in the same room, often for the first time, to surface the connections between programmes. That knowledge informs programme design, or creating structures and processes that build your social impact ecosystem. Shared measurement is what holds it together. Without a common measurement framework, each programme continues to report on its own outputs in its own way, and the collective impact of the portfolio remains invisible.

A social impact portfolio that is purposeful, connected, and grounded in a shared theory of change takes careful planning and coordination. With over three decades of experience Tshikululu manages the full journey, from insight to impact. Get in touch to find out how your social impact programmes could be working harder together.