Safaricom CEO Bob Collymore drinks from a tap as Shofco founder Kennedy
Odede watches when they unveiled a partnership to expand water piping
in Kibera in 2016. Safaricom spent Sh2.3 billion on charities last year.
PHOTO | DIANA NGILA
In 1970, the economist and Nobel
Laureate Milton Friedman called corporate social responsibility (CSR)
“hypocritical window dressing” saying that business people inclined
toward it “reveal a suicidal impulse”. He was dead wrong.
These
days not only are CSRs acceptable, they are indispensable to doing good
business. Thankfully, a staggering number of local companies have
embraced this new world order; capitalism with a soul.
Last
year, top seven listed companies by market capitalisation (61 per cent
of market cap) gave a total of Sh3 billion or an equivalent of 0.45 per
cent of their total revenues to charity. At the top, Safaricom
led both in percentage terms (1.18 per cent of its total revenue) and in hard figures (Sh2.3 billion). Bravo.
That
said, much can be talked about today’s corporate philanthropy. It may
seem the giving by most corporates is becoming both more strategic and
more self-interested. But who am I to judge any corporates intentions?
So, far from its variation of shade, in today’s article, I only seek to
give philanthropy a good push. And here’s why and how more Kenyan
companies should contribute more.
To address the why,
it’s pretty obvious. Kenya is a highly unequal society. Recently, the
Human Development Index (HDI) 2016 ranked the country at position 146
out of 188 countries – one position above countries categorised under
the low human development bucket. Nationally, 42.5 per cent of the
population lives below the poverty line (2009 estimates).
Further,
statistics indicate that 38 per cent of the wealth remains in the hands
of 10 per cent of the population, leaving 90 per cent of the citizens
to share out the rest.
The poorest 10 per cent of the
population control only 1.8 per cent of the national wealth. For these
reasons, giving back to communities is not only good corporate
citizenship, it’s an important undertaking in rebalancing the “wealth
equation”.
On the how, companies can stick to the proven model – take a cut out of annual earnings and give to chosen projects.
But
philanthropy can only be firmly institutionalised if it’s part of
companies’ strategic plans. Big-picture issues such as job creation,
healthcare, education, housing and environment can form part of these
long-term plans.
For some, this may force a
re-conception of what business really is – a company may need not to be
profitable to be benevolent. Others may be forced to experiment and
innovate. Imagine banks with credit policies debt-forgiving 3 per cent
of their most vulnerable defaulters?
Without
a doubt, to solve today’s burning issues, corporates may need to act as
“closet socialists”. But don’t get me wrong, I love capitalism and free
markets.
I believe in capitalism in as much as
history has yet to show a more efficient way of allocating resources and
rewarding effort.
But to believe only in capitalism
as an end-in-itself, is spiritual death. If capitalism is to bring about
the aspirations espoused both in our National Anthem – “Plenty be found
within our borders” and the Vision 2030 – “A globally competitive and
prosperous Kenya”, businesses may need to do more in giving back to the
community.
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