What it would cost SA’s biggest companies to solve child hunger

by / Friday, 22 April 2016 / Published in Homepage Main Stories

JOHANNESBURG – It would cost the ten largest companies on the JSE just 0.19% of their combined annual earnings in 2015 to feed all of South Africa’s remaining hungry children. According to Joint Aid Management (JAM) South Africa’s MD, David Brown, at least two million pre-school children go to bed hungry every night in South Africa.

JAM is feeding more than 84 000 of these children across seven provinces, by providing them with a bowl of porridge each day known as CSS+, or Corn Soya Sugar Blend. This contains 75% of their daily nutrient requirements, says Brown. Through JAM’s feeding scheme, it costs R360 to feed a child for a year. Assuming that 1 916 000 children still need to be fed, that amounts to R689.8 million per year, or 0.19% of the R354.4 billion collectively earned in 2015 (calculated by adding headline earnings or operating profit, where headline earnings wasn’t available) by the JSE’s ten largest companies by market capitalisation.

It would cost these companies roughly 2% of one year of profits to feed these children for ten years. Granted, five of the ten companies earn income in foreign currencies, which greatly inflates their earnings when converting them to rand. Put differently then, South Africa’s Big Four banking groups (Barclays Africa, FirstRand, Nedbank and Standard Bank), which all report earnings in rand, would have to cough up 0.92% of 2015 profits (cumulatively R75 billion) to feed the same number of children for a year.

In other words, the problem is solvable regardless of how you look at it. CSI must be driven from the top According to Brown, when it comes to corporate social investment (CSI) in South Africa, programmes driven by senior executives have the greatest impact. “Some chief executives will make sure that they attend CSI days with their staff, for example, improving a crèche,” he notes. Some organisations leverage their giving by inviting their customers to contribute, Brown explains. For example, motor oils company Liqui Moly contributes R10 from the sale of every product in South Africa to feeding and educating children. KFC, meanwhile, invites customers to add R2 to their meal purchase, which is then contributed to various beneficiaries – including school feeding programmes and childhood development organisations – through the fast food chain’s Add Hope initiative. “One company in the IT sector has elected to feed an additional two children for every one child fed by one of their employees,” notes Brown.

“For companies to really manage CSI properly they need to do due diligence on the NGO or organisation to which they are donating funds,” Brown adds. “Many organisations are not being good stewards of their CSI and investing in reliable NGOs,” he says. Broad-based black economic empowerment scorecards (BBBEE) have contributed to helping organisations think more broadly about CSI, Brown continues, in that companies now consider skills and enterprise development as part of their CSI strategy, as opposed to donating funds only. 110 tonnes of food every day With roots in emergency response services, JAM International has origins dating back more than 30 years to the Mozambican civil war. Founded in 1984 by husband and wife team, Peter and Ann Pretorius, JAM International now operates in Mozambique, Angola, South Sudan, Rwanda and South Africa.

In South Africa, JAM focuses on early childhood development (ECD) and has partnered with more than 1 700 ECD centres where it feeds more than 84 000 children, improves infrastructure and provides teacher training to caregivers. “Worldwide research indicates that an investment in ECD gives a far greater return than an investment at any other stage of education,” Brown says. “Hungry children cannot learn. More than a quarter of children under nine years old in South Africa suffer stunted growth because they have not had sufficient nutrition to enable proper brain and physical development,” Brown tells Moneyweb. In the rest of Africa, JAM is moving 110 tonnes of food, or 33 truckloads, every day and feeding 1.1 million individuals. It hopes to be active in all nine provinces by the end of the year and feeding 100 000 children, Brown says.

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