Training Workshop for Socio-Economic Development Fundingv3

8/7/2019 Training Workshop for Socio-Economic Development Fundingv3

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Training Workshop for Socio-Economic Development Funding

1. What you will get out of the coursea. You will be able to access funding from Economic Development and Socio-

economic Development funding categories.

b.

You will have something to offer the companies you approach for funding,unlike CSI funding. You can offer BEE points and a tax deduction (Section18A tax certificate)

c. Do not just approach the biggest companies many are multi-nationals orforeign owned and have had to comply to these principles simply to dobusiness in the country or to get access to contracts.

d. The QSE or Generic businesses tend to not have completed their process ornot to know how to use ED and SED funding.

e. Only about 20% of businesses needing scorecards have them and it is asource of frustration for people looking for other companies to do businesswith that so few people have scorecards.

f.

Although you do not legally have to do BEE, Government and privatecompanies will be happier to do business with other organizations with BEEratings as it increases their own ratings. You make an offer to a company bysaying how would you like to improve your BEE points by 5-10 points bydealing with our NGO which has over 75% black beneficiaries.


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2. A brief explanation of Broad Based Black Economic Empowerment (BBBEE)Black Economic Empowerment is the government policy that seeks to redress theinequalities of the past through the education and assistance to black people with theend goal of producing economic active contributors to the economy and to their own

lives.Introduced in 2003 as BEE, the policy initially focused on redistribution of assets,ownership, employee equity and skills development. Over time, it has been recognizedthat this focus was too narrow and had only opened the economy up to those who wereable to access their jobs, assets and ownership on offer. Too many of the previouslydisadvantaged were not in a position to access even the lowest skilled employment inthe modern South African economy. Added to this periods of receission and marketfluctuation and it was decided that a more inclusive, broad-based policy was neededincluding quantifiable and measureable codes of good practice to enable these groupsof people to achieve access into the market. The BB-BEE policy was never enforced inthe sense that it was advisable to achieve a scorecard only for companies who directly

or indirectly dealt with government. In addition, the initial policy of transfer of ownershipcombined with our birds eye view of the land distribution farrago in Zim meant therewas great misunderstanding of the true goal of BEE.The third wave in a sense is the current suggestion that those who are non-compliant orlow scorers will be named and shamed at a date in the future. The fact is that thegovernment is just not big enough, skilled enough and organized enough to achieve a100% happy population any tinme in the new future. To achieve even the most basicgoals, civil and private society have to be involved. By enforcing BEE, the governmentwill be activating thousands more hands and assets to work on regenerating thecountry. After all in the apartheid years the NGO sector single handledly kept the flamesburning for the majority of dispossessed in the country. It is a role that simply mustcontinue on a new playing field.

a. What is the background to BBBEE

How does an economy work

??

TertiarySector =ServiceindustriesSecondary Sector

Industry andManufacturing

Primary Sector =Mining, Agriculture Raw materials

Each stage of the economy addsvalue to a product. I.e. raw sugarcommands a small price on worldmarkets but refined sugar earns more.

Schools, Hospitals consume value butproduce healthy workers for thesystem.

Black people

weremarginalizedand kept fromentering themarket


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The South African economy used to serve only 10% of its population. Black peoplewere employed on a salary that was not competitive. They were not allowed to accesseducation, property or business ownership even if they were able to amass the moneyto do so. In this way the economy was kept small.

It was a wealthy country but only if you were the right colour. We have an abundance ofresources and when they were utilized for only 10% of the population the result was acomfortable lifestyle for the few while most South Africans languished outside themarket.

What BBBEE attempts to do is to reawaken the economy by drawing more of the 90%into the economy as employees but also as consumers. Roads, houses, hospitals,schools, electricity, Telkom systems everything was designed to take care of only 10%of the population.

Colonisation meant that First World countries took raw resources out of the country at alow price, exported them to industries in the First world for manufacturing and then soldthe manufactured products to the rest of the world. An example: when Englandcolonized India, India had a healthy cotton manufacturing industry. They grew their owncotton, used small manufacturers to turn it into high quality material and manufacturedtheir own clothing from this. They had employment for people growing cotton, spinningit into cloth, dyeing the cloth and creating clothing from it. Additional jobs are created forthose who sell the finished product to the public. All these jobs in one industry spinningtheir own wealth to give as many people an income as possible.

The British had just started their Industrial Revolution and the push of people coming offthe farms as their work had dried up due to the mechanisation of farming, into thefactory environment meant that their wasnt enough cotton to maintain the newfactories.

Britain therefore forebade the production of cotton material and clothing in India,destroying an entire industry, so that they could export the cotton to their newmechanized factories and make their own cotton, which they then exported back toIndia as finished cloth.

They stole value from India once by taking the raw material from them at low pricesbecause manufacturing adds value to the products of the primary sector. They stolevalue again by selling the cotton material back to the Indians for manufacture intoclothing at a higher price than they would have paid if they had manufactured itthemselves.

The irony was the British cotton was of an inferior standard to what India had beenproducing in the first place.


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When the ANC took over the country the country;s bank account was virtually empty. 16years later our economy is strong, it managed to weather the glob al credit crisisbecause of policies like BBEEE, SARS, FICA regulations, etc instituted by TrevorManuel, Tito Mboweni and others.

Africa has a legacy, like India of selling primarily raw materials to the First World ordeveloped nations. By doing this we lose value and income to the country although weare so wealthy with ample raw materials.

What BBBEE actually strives to do when you look at the policy as a whole not just as ablack ownership issue, is to keep the money that we have in the country for as long aspossible because in this way we generate more money for ourselves before makingprofit for others.

If a traveler comes to a small town in the Karoo and pays R200 to stay in a bed andbreakfast for the night, the owner makes money. But he then takes the R200 and gives

it to the butcher because he needs to pay his debt. The butcher cross the road andpays the mechanic for fixing his clutch cable. The mechanic goes to the grocer andbuys food for his family for the week. The grocer orders more produce from the farmerand pays him. The farmer pays his workers R50 each for the week. The workers payfor their childrens clothing from the Pep Store in town. Pep store orders new stock fromtheir parent company and the money finally leaves the town.

The original R200 has brought real value of R1600 to the town. This is the idea behindBBBEE. The longer we keep the money we earn spinning from one person to another,within our local environment, the more everyone benefits. As soon as you ordersupplies from outsiders the money leaves your town and starts to benefit someoneelses local economy.

Now if you look at BBBEE you will see it is not a sneaky way for black people to stealthe country back from the white people, it is actually a way to make all of us richerbecause we help each other as much as possible and keep our money spinning withinour own environment adding value to everyones lives.

The end of apartheid freed up black people to enter the mainstream economy and farfrom stealing jobs and ruining the economy, what is actually keeping us going is thelarge numbers of black people who are now educated enough to earn good salaries thatenable them to buy more groceries (keep farmers, supermarkets in business), to buyhouses (the property market is doing nicely), to buy cars, music, toys, restaurant meals,clothing, hobbies etc. Simply by allowing them to join the economy, earn a proper livingand spend their money, we have rescued the economy from stagnation or decay.

However our long term success depends on maximizing this process.

Because so many millions of black people are simply not educated enough to accessformal jobs, we need an economic mechanism to make their entrance into the economy


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easy. In addition, it is impossible for big business to grow fast enough to provide semi-skilled jobs for everyone, hence the SED funding for those who cannot climb out of theirpoverty and ED for those who can with a little help from their friends.

If you do not understand this you cannot understand why BBBEE is essential to our

countrys health and future growth prospects.


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The Economy in BBBEE terms

Balanced, sustainable growth is only achievable if the majority of our citizens areparticipating. Emerging entrepreneurs have a key role to play in our economy

Ownership

Management

Employment Equity

Skills Development

Preferential ProcurementSupports ED

Enterprise Developmentsupports your suppliers and creates space

for entrepreneurship

Managers move into own business and

creates space for newcomers from below.

Adds value to the economy aspeople become more skilled and

more employable

Promotion as becomemore valuable to the

employer

Formal employment

Self-employment

Socio-Economic Development75% black

Limited value to economyUnless drawn into the economy via enterprise development and education programmes and

micro business development


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b. What is Govt trying to do

White people are 10% of the population but own 90% of the businesses andassets and hold 90% of the best jobs in the country.

Black people make up 90% of the population but own 10% of the economicassets and hold 10% of the top jobs. BBBEE is trying to alter thisproportion over a long period of time.

create more jobsDevelop skillsDevelop entrepreneursImprove uneven distribution of assets and opportunities.It is an opportunity to grow your business and profitsIt is less government interference than other government actsSmall administration irritaiton

c. What is BBBEE PrinciplesBEE is about points but its true purpose is to help the country grow

economically and socio-economically.You need to make choices and decisions that benefit your company as well

as the people you are helping this is not for charity but for growth.

Always consider black women and disabled people as they earn businessespoints everywhere in the scorecard.

d. Who are black peopleThis is a generic term for Africans, Coloureds, Indians, Chinese people who

are South African citizens by birth, descent, naturalization before April 1994or who became citizens in 1994 but by naturalization could have done soearlier.

Therefore you cant tell who is black by just looking at someone Zimbabweans are not black

Disabled people must be black to qualify.e. Misinterpretation that it is just about ownership

BEE is not just concerned with ownership but with dealing with all theproblems in the country

Originally the first version of BEE was very narrow and focused onownership and control it has since been extended further to include theother categories like Socio-Economic Development funding. The poverty barrier for black unemployed and rural poor is deal with in

the SED funding, Employment Equity and job creation. We could leavethe responsibility to the government to solve these problems but it willchange faster if everyone gets involved.

The skills barrier for black workers is dealt with by Skills developmentand Employment Equity

The Business Barriers for black entrepreneurs are deal with byaffirmative procurement and enterprise development


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The opportunity barrier is handled by the ownership and managementparts of BEE and create equal economic opportunities for the emergingblack middle class and investors.

f. FrontingThis is how most people understand BEE the company that employs a

black director to sit in the corner and do nothing.In fact you can have 100% white management = no equity in company but

lots of skills development and socio-economic development funding and stillhave a good score card.


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3. Codes of Good Practice

The Codes of Good Practice provide a way to measure whether a company is achievingmeasurable Broad-Based BEE in its activities. This allows the government to measure

the impact of these redistributive measures across all sectors of the economy.

The 7 measurable Scorecard Element of the Codes are:

Code 100: OwnershipCode 200: ManagementCode 300: Employment EquityCode 400: Skills DevelopmmentCode 500: Preferential ProcurementCode 600: Enterprise DevelopmentCode 700: Socio-Economic Development


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4. Different Industry chartersa. The Tourism, Forestry, Financial, Construction industries and others have their

own industry charters as well the first two have been signed by the Minister ofDTI

b. ICT and Transport industries being considered. Until they have their ownindustry charter signed by the Minister of DTI the codes of Good Practice apply.c. The mining and petroleum Acts have their own charters that pre-date andconflict with the BBBEE Act.

5. The Balanced Scorecarda. This is made up of four pillar with seven elements :b. Direct Empowerment is Equity Ownership (Code 100) by shareholders or

management/trustees and directors (Code 200), This is the percentage of blackshareholders and the percentage of black people in management and directors.

c. Human Resource Development is Employment equity (Code 300) and skillsdevelopment (Code 400) This applies to the employees in the business and the

amount of money spent in training black employees.d. Indirect empowerment deals with preferential procurement (Code 500) andenterprise development (Code 600). Your suppliers with BBBEE scores andwhat you spend helping black owned businesses.

e. Residual refers to socio-economic development (Code 700). What the businessspends on helping NGOs.

6. Different Scorecards:a. Generic Scorecards NPAT of more than 35m per annum. Most of

corporate SA (95%) know about BEE codes of Good Practice in 2007Trialogue research. 91% of these knew of the scorecards Socio-economicdevelopment target of 1% per annum NPAT. The majority of largecompanies were already meeting or exceeding their target for SED in thescorecard. Only 15% said they were not. This means that the market isfairly saturated in the multi-national, international, national big corporateworld.

b. Small / medium enterprises 5m 35m per annumIn the light of recent media reports (see Appendix ??) about governmentsunhappiness with the latest stats on employment equity and their decisionto institute a name and shame policy, NGOs would do well to focus theirefforts on the smaller localised businesses who have not been forced toget scorecards as their businesses are too small to be dealing withgovernment contracts or other large corporate. These businesses and thenext category of business will now be forced to account for their BEEspend and the easiest way to earn 40+ points is through an astutecombination of SED, ED and Skills development. In this way no realcontrol of assets is threatened, business continues as usual but the seedsare laid for greater things in the locality of the business. By keeping BEEgains close to home, the company prospers directly by association. Thesoup kitchen if funded by the grocer on the corner, the home for children


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receives blankets, uniforms, bursaries from a number of local plumbers,electricians, small printing ccompanies, factories, etcSince January 2008 all companies with a turnover of more than R5mwanting to do business with the government have had to have BEEscorecards.

c.

Qualifying Small Enterprises Mom and Pop Businesses less than R5mper annumd. Exempt Micro Enterprises these are businesses that make less than

R5m per annum the different sectors of Construction, Forestry, Tourismhave different minimum earnings per sector. They do not leally have to doBEE they only have to inform their customers that they are exempt.

The key to BBBEE is to make sense of the BEE deals and to spend where it helpsyou.

Why do we care that most Directors are white and all refuse collectors are black. Dont

people have a right to earn what they can and be who they want to be. Dont privatecompanies have the right to choose the director they want? In all countries there aresome people who are wealthy and others who are not. An income distribution curverepresented by the Gini coefficient in SA unlike the rest of the world, the Ginicoefficient exactly mirrors the racial breakdown. This is the result of apartheid.

The New South Africa was created to fix this but 20 years on the poorest, leasteducated and those with the worst jobs are still all black.* Usually capitalism likes tobelieve that the market forces in a society will even out equalities and perhaps thiswould work if we had not so badly messed the economy up in apartheid years.

Would someone like me have succeeded if I had been born in a shack? Maybe butmore likely not. There are too many things against you when you are that poor.

None of this has worked yet because the BBBEE we are looking at now is only aboutfour years old. The original attempts by the government did not work. BBBEE will work ifapplied correctly.

7. Enterprise Developmenta. Most companies try to grow their business by getting more sales, doing more

marketing, or reducing costs for salaries, equipment, office space, etc.Enterprise Development is a strategy to allow a company to invest in othercompanies to achieve growth in their own organization. The returns come inthe form of less waste, more revenue, increased profits, and better quality.

b. It can be a philanthropic effort where a company assists another companyexpecting no direct return. Almost anything can be done under this category tosupport another business: e.g. donating old computers, donating training in ITor finance or strategy; giving grants


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c. an investment strategy where the intention for the contributor to benefit in anyway is seen as an investment. This requires a proper ED strategy so thatreturns are assured. These can be in the form of increased

brand awareness, BEE score Revenue supplier quality profitability supplier loyalty market share customer loyalty supplier quality

d. reduced call on management time wastage

e. To summarise enterprise development is not just part of the scorecard but areal growth strategy that lets a company grow by investing outside their ownoperation. Growth can occur in market share, revenue, customer base andprofitability.

f. 15 pointsg. % of Net Profit After Tax (NPAT)h. Assist and/or accelerate the development, sustainability and ultimate financial

and operational independence of these beneficiary entities.

Exempt Micro Enterprises are companies or NGOs with an annualturnover of less than 5m a year exc. VAT

Qualifying Small Enterprises = 25 points or 2% of NPAT (Usually familybusinesses where ownership and management is difficult to re-distribute

need to get points from SED and ED for eg. if they give 20,000 to you forSED and 10,000 for ED to develop a small business you are running usingblack disabled people they have 50 points already and become a level 6supplier.

Generic Businesses with 50.1% black ownership who are level 1-6contributors = 15 points of scorecard or 3% of NPAT these are mediumsized companies who can get to level 8 by contributing funds to NGOs.

Contributions either money or in kind, loans (recoverable) or grants (non-recoverable)

i. Enterprise development brings together contributors and beneficiaries in asupportive relationship

j. Specifically the contributions whether financial or in kind, whether recoverableor not must increase the amount of development and sustainability in theeconomy

k. And create independence for the beneficiary over the long term. Grants, Direct costs supporting beneficiaries, investments, overheads,

loans, favourable credit terms

Guarantees


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Mentoring for management, ideas, coaching Credit facilities Training Managing and controlling accounts finance Identifying the market and implementing marketing activities Sales help in finding customers And in kind, machinery, food, printing, transport (usually related to the

givers core business)

Frequently, business are more compliant with BBBEE than they realize when they haveunderstood what it really is.

NGOs clearly do not benefit from this part of the BEE scorecard as they often deal withchildren, old people, ill people or people with disabilities. However, if beneficiaries of anNGO want to start up a business they would then become eligible for this. It is possibleas an NGO to maintain your core business as an NGO and start up small companies to

supply preserves, beadwork, sewing services, cleaning services, if your beneficiariesare interested.

Sports for All is an NGO that has set itself up as a franchise business. Every new outletis opened as a franchise business which benefits a community and employs and trainspeople from the community to run the project. They are therefore able to accessEconomic Development funding.

8. Socio-Economic Developmenta. Charitable contributions to black causes that are external to your business with

75% previously disadvantaged beneficiaries

b. Contributions are monetary or in kind and must be non-recoverablec. Some contributions are not tax deductible e.g. wheelchair donationsd. Monetary contributions or expertise donated are tax deductible so NGO can

issue a Section 18A form to the company as well as give them points on theirBEE scorecard

e. Generic Businesses = 5 points or 1% of NPATf. Qualifying Small Enterprises = 25 points or 1% of NPAT

Every NGO has a BEE score of Level 4 automatically because they are NGOs

Please note that SED and ED categories are Cumulative Measurements Measured from February 2007 or up to 5 years previously on a rolling

basis.

which mean there are serious consequences for a company if theydecide one year that they do not need the points and stop doing SEDor ED.

Each year that the full target is not reached makes it more difficult toreach get full points the next year


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Only outstanding parts of loans are credited Loans are only credited proportional to how many months the loan has

been active.


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Appendix One

Codes of Best Practice


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Appendix Two

Certification Levels

BEE Score BEE Status Recognition Level100+ Level 1 1.3585 100 Level 2 1.2575 85 Level 3 1.1065 75 Level 4 155 - 65 Level 5 0.845 55 Level 6 0.640 45 Level 7 0.530 - 40 Level 8 0.1Less than 30 Non-compliant 0


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Appendix Three

There are four primary development frameworks relevant to South African businesses.

Corporate social responsibility an overarching values-based framework

CSR is the recognition that businesses have a responsibility not only to shareholders but to theiremployees, society, customers, government and future generationson the planet. These extend to the

seven aspects of the DTI BEE scorecard.

Ccorporate social investment voluntary social development activities refers to the voluntary activities

through which companies make contributions in cash or kind to their communities, organizations or

individuals to promote socio economic growth and welfare.

Socio-economic development a discretionary transformation framework the final BEE codes define

SED as monetary or non-monetary contribution actual implemented in favcour of beneficiaries with the

special emphasis on facilitating sustainable access to the economy for these beneficiaries. It is critical

that there is a direct line of sight to the black beneficiaries and that they be 75% of the totalbeneficiaries of the programme.

Local Economic Development is a mandatory framework- the difference in focus here is that job must be

created which distinguishes LED from SED or CSI

The difference between CSI and SED

(according to Trialogue)

Corporate Social Investment:

Financial and non-cash contributions to communities, organizations, individuals for social upliftment and

welfare. Nothing can be done that advances company profits or brand equity. In SA, CSI is

developmental empowering communities and improving lives of previously disadvantaged.

Socio-Economic Development is very much the same but CSI does not make a choice between welfare

initiatives and those that encourage economic inclusion more directly. But SED is specifically focused on

thins that promote economic inclusion of black people. But examples of what can be supported can

have a welfare base such as HIV/AIDS, healthcare, arts, culture.

Code 700 is overwhelming about long term inclusion of the excluded black people into the economy. A

broad view should be taken of SED to include integration of black people through welfare programmes

first as an economic strategy. People need to fed, healthy, educated and housed before they can begin

to contribute and participate economically.

Support for the environment is thus also included in SED as the ability of communities to interate

depends on sustainable development that recognizes that the environment is an integral part of any

socio-economic system.


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CSI funds were often channeled by big companies to the National Business Initiatives, the Business

Trust, Business against Crime, government institutions who would transfer funds via other

implementation parties.

Code 700 refers to companies that employ third parties to do their SED role for them. Contribution to

projects approved by the State including infrastructural development, reconstruction in under-

developed areas, and rural community projects. So long as the end beneficiaries met the specified

criteria of 75% black, these contributions can be measured as SED.

Donations of types of service, and of different goods were common to CSI and can be used for SED

points. New goods or services are given the value that they cost the company. Redundant products are

valued at what they would bring in if they were sold on the current market taking age, condition and

usuability into account, e.g.: computers or fridges. If goods are serviced this is added to their SED value

to the company. Services are costed in at what they cost the company in terms of man hours.

Sponsorships, were the marketing value attached to a financial gift compensates the sponsor are

considered as marketing tools and not SED spend. However, if a certain amount of financial gift went to

a beneficiary, this amount would qualify for SED spend. Donations made by third parties at an eventwould be claimed as SED by them not by the sponsoring company.

Bursaries have been included as a qualifying SED spend but focus on those that would benefit being

non-participants in the economy. This means people associated with the company or working for it

would not apply. This means the bursaries are unconditional so long as the recipient was previously

disadvantaged. Bursaries to employees qualify as Skills Development not SED.

Very importantly to a lot of NGOs is the fact that supporting beneficiaries by taking care of overheads is

allowed! This means that 80% of such costs can be carried for an NGO if 75% of the final beneficiaries

are black. All verifiable costs both financial and in kind, including wages of staff, office and admin costs,

communication and travel of the SED/CSI unit should be considered. Part-time work for SED should becalculated pro rata. The SED component can be outsourced to a third-party in which case you the NGO

are the dedicated SED/CSI unit for which 80% of the costs can be paid.

If a company supplies financial management planning and advice, marketing strategic development or

physical sweat labour, the work should be valued according to:

Professional services offered by the company at a pro rata or discounted rate.

If standard rates dont apply the Auditor General has set general rates for services. If it is employee time

that is given this is calculated pro rata against the employees monthly salary.

Research and development costs, reviewing of programmes and measuring results are very valuable as

they can inform and alter the NGOs or companys SED strategy for the future. Research is essential when

doing SED properly. Good governance and an effective use of available resources is only possible with

policy formulation, strategic reviews and assessments of projects. SED related research and

development, reviews and evaluations, undertaken by the organization or by a dedicated third party

count as SED spend. If the research is brand orientated and tries to ascertain for example what brand

exposure has been achieved due to an SED initiative it does not qualify.

Communication Costs are included for SED to promote and implement the project but this should relate

exclusively to the project and be specifically to better the socio-economic circumstances of the


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beneficiaries not the company. Any above the line mass media promotional campaigns would not be

included here.

It is important that companies do not feel obliged to jettison their current support via CSI initiatives to

focus on economic development as the welfare sector is in most critical need of help. The very young,

the old and the disabled and marginalized communities desperately need help and most of these CSI

initiatives should remain.

It is important that the scorecard not cause a tick box mentality that loses the current CSI focus on

important causes. The SED Code needs to be interpreted from the CSI point of view, the CSI role

retained and its spend not lost to other easier areas of the scorecard. The CSI programme should

neither be used to promote the company nor as a sop to the scorecard. SED must achieve results and

the most basic of these are the most basic human rights. Without the provision of decent housing, food,

health, education, no feasible employment creation project can succeed.

If companies are too concerned about branding rihts than real developmental gains, real change cannot

happen. A recent trend has noted that grantmakers are beginning to want to understand what other

actors in their area are doing so that efforts are not competitive and duplicative but create a seamlessnet of assistance around a certain locale. Both NGOs and their sources of funding are starting to see the

sense in collaborating in an economic sector or geographic area. Mines for example have always sought

to work in this way to create a stable work force to ensure a steady and realiable source of labour. The

mining charter in fact requires all mining housese to apply for a licence to operate and include

comprehensive social and labour plans to show their commitment to socio-economic issues in their

locale. It also requires them to contribute in real terms to Local Economic Development which means

that their efforts have to focus on developing and implementing programmes set by the Integrated

Development Plans for their areas. These plans are written by municipalities, provinces and the whole

nation. Each level of IDP fits into the one above and below it. The mining charter requires that the

mining companies planning for SED fit into this environment.

Imagine for a moment what would happen if you the NGO obtained the IDP for your municipality,

located yourself of the map of local government development planning and aligned your strategy to fit

an overall goal for your locality. Wouldnt the whole country be more effective. What the Food Bank

for example is trying to do is to move slightly spoiled, just expired or otherwise unused food to the areas

where there are people starving. We all feel guilt when we toss out leftovers we are not going to eat or

the tomatoes go off because we are too busy to cook and snack instead on Kentucky. Food Bank is

trying nationally to balance areas of surplus with areas of need.

We all need to operate in this way if we expect to build a strong and fair future South Africa for many

future generations.


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Appendix Four

Socio-economic development programmes typically deal with the following categories:

Development prorammes for women, youth, people in rural areas and people with disabilities.

Support of health care and HIV/Aids programmesSupport for education programmes, resources and materials at primary, secondary, and tertiary

education level, as well as bursaries and scholarships, community training, skills development for

unemployed people and adult basic education and training

Support for arts, cultural or sport development programmes

Examples of SED in the BEE codes

Cod 700 and its interpretive uide provide examples at various plances about what kind of company

contributions apply as SED spend.

This is not a complete list.

Direct SED contributions by companies:

Money grants to SED beneficiaries

Developmental capital advanced to beneficiary communities

Direct costs caused by supporting SED projects and beneficiaries

Payments to third parties who do SED activities for the company

Standing as guarantor or security

Preferential terms, discounts, early payments

Training/mentoring a beneficiary to increase financial capacity

Support for developmental programmes

HIV/Aids and healthcare supportSupport for schools

Educational assistance through bursaries

Skills development for the unemployed

Support for arts and culture

Contirubitons to approved government projects:

Infranstructure development projects

Reconstruction in under-developed areas

Rural community projects

Projects in specific geographic areas specified in the governments integrated Sustainable Rural

Development and Urban Renewal plans.

Human resource contributions:

Professional services rendered for SED at no cost or discounted cost, i.e. web design, IT trouble shooting,

programme design, bookkeeping services, annual report production

Training or mentoring in beneficiary communities eg. Big sisters organization professional employed

women give an hour or two a week to teenage matric girls to help them decide what to study and to


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