Santa Shoebox Project encourages corporate social investments to prioritise ECD programmes

Corporate Social Investment (CSI) expenditures by South African businesses were projected to reach R11.8b in the financial year 2023, a modest real gain of 1% over the R10.9b spent in 2022.

Businesses should now be considering where to spend their increased CSI budgets for maximum impact and how to increase them ahead of the new fiscal year. This is vital given the government is expected to continue tightening its belt in the next Budget Speech.

The Santa Shoebox Project’s CEO, Deb Zelezniak, claims as much, saying she is pleased to note that last year, the bulk of CSI spend was on education. However, only 26% was allocated to early childhood development (ECD), with 43% going to school-level instruction and 27% to tertiary education.

“What corporates might not realise is that ECD lays the foundations for success in these next stages of education. Studies show that children who participate in quality ECD programmes achieve better in school and are more likely to attend university,” she said.

Government ECD funding falls short

She continues, saying companies might not know that children in Grade R receive the most government financing instead of those enrolled in ECD programmes. Furthermore, they will now spend less of the minimal sum they already spend on ECD. Taking into account CPI inflation, the 3.1% nominal increase in basic education spending proposed in the recent Medium Term Budget Policy Statement really amounts to a 1.4% decrease.

“If Treasury reduces ECD funding even further, it will mean access to and the quality of ECD services will remain a challenge, with socio-economically vulnerable children being at the greatest disadvantage. Currently, more than 1.3 million children aged between three and five are not attending any form of early learning programme and only 45% of those who do are reaching key milestones, so I am gravely concerned as to how budget cuts could impact the country’s children,” Zelezniak pointed out.

Zelezniak noted that President Cyril Ramaphosa stated in his recently delivered State of the Nation Address (SONA) that the government’s focus over the next five years would be on expanding access to ECD, and she believes this will be too little too late unless corporate South Africa steps in now to bridge the funding gap.

ROI (return on investment) ripple effects

It is projected that South Africa receives at least R10 back for every rand invested in quality early childhood development (ECD) projects, which benefits the child and produces some of the best rates of return for families, society, and even the nation.

Under Section 18A of the Income Tax Act, the Broad-Based Black Economic Empowerment (B-BBEE) scorecard, and the Employment Tax Incentive (ETI), businesses that invest additionally benefit from deductions of 10% for donations to designated public benefit organisations (PBOs).

The Santa Shoebox Project (SSP) is one of these registered PBOs and, as a Level One Contributor to B-BBEE, earns its supporters 135% procurement recognition. The organisation depends on sponsorships and donations to positively impact the lives of underprivileged children in South Africa and Namibia.

“Monetary donations are allocated to SSP Legacy, which brings permanent change to the lives of Santa Shoebox beneficiary children and the impoverished communities in which they live by establishing new and transforming existing ECD centres in rural South Africa. This also includes registering the centres with the Department of Basic Education, training educators in skills critical to ECD, providing access to potable water and nutrition for growth and development and improving literacy,” outlines Zelezniak.

Zelezniak implores CSI to prioritise ECD on their budget.