The Love Trust’s outstanding track record as a reputable not-for-profit organisation (NPO) with highly skilled people at the helm makes it attractive to for-profit organisations as a long term investment prospect.
The Covid-19 pandemic and retracted economy have had a devastating effect on many of the over 220,000 registered NPOs in South Africa who service the poorest communities. In 2019, according to an estimate by the Trialogue consultancy, corporates spent R10.2-billion on corporate social investment programmes, with NPOs receiving 54%, about R5.5-billion.
However, according to social activist and advisor to NPOs, Shelagh Gastrow, CSI investments could shrink by about 4.5% because of the continued economic recession, making it more difficult for them to raise funds.
The Love Trust is determined to continue to deliver to beneficiaries to ensure that the most vulnerable children are not worse off than before the pandemic. We ask adviser to the board, Stephen Brown, what makes The Love Trust stand out as an NPO. He is a former director of private equity company RMB Corvest and assists in concluding BEE transactions with for-profit organisations to benefit The Love Trust financially via dividends and through partnerships to contribute to socio-economic development.
Brown explains that The Love Trust’s uniqueness is because many highly skilled people are passionate about the NPO’s calling of educating disadvantaged children and uplifting the community. Donors feel comfortable that all contributions made bring about value to the beneficiaries. He adds that many people will testify that The Love Trust is doing a fantastic job according to its mandate.
Studies done by the University of Stellenbosch Business School on why NPOs have been particularly hard hit are that donors and organisations are reluctant to fund NPO employee salaries. Brown says that is not the case with The Love Trust as this is taken into account.
Clarifying the distinctiveness of The Love Trust’s appeal to long term investors, Brown says it is the desire to educate children from vulnerable communities and those affected by the inequalities, poverty, and oftentimes child headed households all of which are now compounded by Covid. The Love Trust trains early childhood development teachers in townships in South Africa, and donors can see for themselves the work being done because of its transparency in what they do and how they do it, the schools, teachers’ advancements, and the children.
Brown talks from experience, having been involved with The Love Trust since its inception. He says The Love Trust approached him while working at RMB Corvest to advise how their BEE credentials could support private equity investments in South Africa. From there, he says, it was a question of needing to do one on the back of a deal. The Love Trust has a phenomenal network of people, leading to finding companies looking to make a positive impact on the most vulnerable communities.
Brown recounts RMB Corvest did two deals with The Love Trust when it was still in its infancy and believes one of the original deals remains in the portfolio over a decade later. Since Brown left the organisation in 2017, he has assisted The Love Trust with three private equity deals.
Explaining the benefits of organisations investing in transformation in South Africa beyond a BEE scorecard, Brown stresses the continued need for our country to deal with inequality. The future of the economy and the future of business will depend mostly on the balance of the have’s and the have not’s.
Brown emphasizes that corporate South Africa needs to continue to protect its future by prioritizing education and creating employment opportunities to reduce inequality.
Foreign investors, says Brown are often South African expatriates with a vested interest in the country wanting to participate in transformation and grow the economy for future generations.
Fortunately, legislation is minimal for any organisation or donor wishing to invest with The Love Trust. If it is a company, then The Love Trust offers significant opportunities and benefits as a BEE and social impact partner.
Any off-shore donation only needs a signed form from a local bank, and The Love Trust has the skills and systems to help anyone wanting to make a foreign donation.
Lastly, Brown says he believes that social impact partnerships such as The Love Trust are more than just philanthropy. “The overriding problem is education; we need to develop people from young so that we have a growing and improved economy, in turn, reducing inequality.”
The Love Trust is ideal for social impact partnerships. It tackles education by teaching from pre-primary school age to senior primary school and educating ECD teachers on equipping the very young with the right foundation to learn.