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.
At The Love Trust we are determined to continue to deliver on our promises to ensure that the most vulnerable children are not worse off than before the pandemic.
What makes The Love Trust stand out as an NPO
Adviser to the board and former director of private equity company RMB Corvest, Stephen Brown, who also assists in concluding BEE transactions with for-profit organisations to benefit The Love Trust financially via dividends and through partnerships, explains that our uniqueness is because many highly skilled people are passionate about our 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 our mandate.
Studies done by the University of Stellenbosch Business School on why NPOs have been particularly hard hit suggest that donors and organisations are reluctant to fund NPO employee salaries. 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 our transparency in what we do and how we do it, the schools, teachers’ advancements, and the children.
Brown talks from experience, having been involved with The Love Trust since our inception. The Love Trust approached Brown while he was working at RMB Corvest, advising how our BEE credentials could support private equity investments in South Africa. From there 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 we were still in our infancy and believes one of the original deals remains in the portfolio over a decade later. Since leaving the organisation in 2017, he has assisted The Love Trust with three private equity deals.
Why organisations should invest 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 emphasises that corporate South Africa needs to continue to protect its future by prioritising education and creating employment opportunities to reduce inequality.
Foreign investors 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, we as The Love Trust offer significant opportunities and benefits as a BEE and social impact partner.
Any offshore donation only needs a signed form from a local bank, and we have the skills and systems to help anyone wanting to make a foreign donation.
The benefit social impact partnerships have on the community
Brown believes that social impact partnerships such as The Love Trust are more than just philanthropy. He says the overriding problem is education; people need to be developed from a young age so that we have a growing and improved economy, in turn, reducing inequality.
The Love Trust is ideal for social impact partnerships. We tackle 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.
About Stephen Brown
Stephen Brown is a Chartered Accountant and Chartered Financial Analyst with experience in private equity, including management buyouts, leveraged buyouts, and BEE transactions. Stephen is a former director of private equity company, RMB Corvest. As a firm believer in social upliftment, Stephen has been involved with The Love Trust, a South African not-for-profit organisation committed to delivering excellent quality Christian education and social care to vulnerable children since its inception.