White paper first published by the Christian Economic Forum in 2018
Pieter began his professional career at PwC, and in 2005 became the Financial Director of Infotech. In 2008 Pieter took over the management of Francois van Niekerk’s investment interests, as well as those of the foundation which had started in 1980, and formed the Mergon Group. Since then, Pieter and the Mergon team have actively partnered with a number of like-minded entrepreneurs to build businesses that achieve above-market success.
Mergon, founded in 1980, is an investment group that is 70% owned by an independent foundation, established to create Kingdom impact through effective partnership with ministries and not-for-profit organisations (NPOs) in South Africa and beyond. Because of its unique structure and entrepreneurial approach, Mergon is positioned as a significant role player in both the business and the social sectors in South Africa.
With growing experience across both sectors, we asked ourselves the following question: “How can we best steward this cross-sector experience and leverage our relationships, influence, and insights to be catalysts for extraordinary impact?”
South Africa is one of the most unequal societies in the world and carries a legacy of social injustice. There is a growing awareness in the business sector that it cannot simply focus on profit alone; it also needs to play a role in making a positive difference in society – commonly referred to as corporate social responsibility (CSI).
However, as we examined the conventional approach of businesses to social responsibility and the resulting partnerships between business and the NPO sector, it became clear there are many challenges that significantly reduce the intended social impact of funds allocated. These include:
We further learnt there exists a general lack of collaboration between funders on the one hand and NPOs on the other. This thinking in silos often gives rise to a duplication of efforts and programmes addressing similar challenges in the same geographic or thematic areas.
There are also regrettable power dynamics that are often mixed into the equation that, together with the above, contribute to ineffective or sub-optimal fund deployment strategies and resultant impact from corporate social investment.
Our conclusion was that there was much scope to increase the social impact achieved through capital deployed by the business sector. However, the task was huge, and it would require a uniquely collaborative mindset.
We realised we needed to invite businesses to become part of a journey where they could deepen their understanding of the social sector, discover their own blind-spots, and learn to work with each other. On the NPO side, we would need to build a deeper level of appreciation for the skills the business sector can bring, as well as the unique drivers and pressures they face, especially WRT reporting on proven, verifiable impact of their social investments. In addition, we needed to establish a deeper level of trust between businesses and NPOs, to learn from each other and to work together as peers rather than as donors and beneficiaries.
In a nutshell, we had to create scalable platforms for constructive engagement that would lead to effective partnerships and best practice approaches. We believe that ultimately, success will result in a business community that is inspired to give more, and in due course, will increase their social mandate beyond giving to include a more holistic view of using business as a force for good.
Borne out of Mergon’s core values and long-term partnership approach, in 2012 we launched the Nation Builder initiative. The sole purpose of Nation Builder was to equip and inspire the business community towards greater social impact through effective partnership and collaboration within and across business and the NPO sectors.
Three key principles underpinned the Nation Builder approach:
The selfless pursuit of a common goal
We believe that at the heart of effective partnerships lies a willingness from each partner to lay down their own self-interest in pursuit of a common goal. In doing so, each of us will, paradoxically, ultimately fulfil our mandate. This is an important, counter-intuitive principle. We took Mergon out of the centre of the conversation by founding a separate brand to provide a “neutral” space where businesses were invited to join each other on a mission – to selflessly contribute their time, knowledge, and experience for the greater social good.
Valuing each person’s unique role and contribution
The sharing by each participant of lessons learnt through successes and failures and the insights gained from each person’s experiences created an environment of trust and respect. We purposefully embraced a highly relational approach to create a safe and thriving space for learning, creativity, and vulnerability. The result is that egos and competitiveness quickly leave the room – what prevails is a spirit of collaboration and co-creation towards a greater goal.
Going beyond conversation to collaboration and co-creation
In order to attain buy-in from businesses, it was critical to ensure action beyond the conversation. We, as Mergon, invested in establishing a dedicated Nation Builder team that would harness the knowledge and insights shared by the participants to co-develop these into case studies, tools, and resources that could serve the participants and the broader industry.
What we did
The journey that has unfolded has been that of a proverbial mustard seed growing beyond our greatest expectations. Nation Builder began with efforts to cast vision toward a common goal before convening a panel of 12 individuals from 8 businesses, all of whom had many years of experience in the corporate social investment space.
We met for over 18 months to co-create an online self-assessment benchmarking tool that would assist corporate and mid-sized businesses to rate various elements of their social investment approach – from the board, through to strategy, employee engagement, partnership approach, monitoring, and evaluation.
Once areas of development were identified through the assessment tool, the panel also worked together to develop and publish a number of written resources that are freely accessible to the broader business community to support other businesses in their journey of self-improvement. The development and launch of this tool was a success with over 150 businesses to date actively engaging with the assessment and associated resources.
However, to our surprise we found that the true power of the initiative was not primarily in the work-product delivered, but instead in the “community” that formed between these 12 people over the 18 months of selfless hard work. It was a community that had learnt to trust, respect, and appreciate each other as they worked together to co-create resources that would benefit not only themselves, but also many other businesses on their journeys towards greater social impact.
Upon reflection, we realised we had also learnt much through facilitating this journey. We had seen the power in creating a neutral platform for effective collaboration and co-creation, supported by a team intent on serving the broader collective. Whilst the tools and resources are of high-quality and undoubtedly have much value, the real change in perspective happens through new-found relationships where people can listen and learn from one another.
We have since re-focused our strategy towards the multiplication of these peer-learning groups called Collabs. These collaboratives are now active in the three main economic hubs of South Africa and are comprised of more than 150 businesses who collectively invest approximately $50 million annually towards social impact in South Africa. In each region, we also host an additional Collab comprising a select group of NPOs who are respected as thought leaders and who share Mergon’s passion to create Kingdom impact whilst having a social impact. Flowing out of these NPO and business Collabs we are able to bring crucial cross-sector knowledge and insights into the conversation – with businesses and NPOs learning from each other while building better partnerships for greater social impact.
Over a 4-year period, these collective groups have developed multiple tools and resources, including the social investment self-assessment, an online community portal containing a repository of knowledge pieces and case studies, and a series of resources on how to best partner for social impact. We are currently busy with an ambitious national initiative to standardise reporting between business and NPOs, which will alleviate a huge amount of duplication of effort, allow for better information gathering, and encourage greater transparency in the industry.
Nation Builders’ scope has steadily increased over the past six years. We now host an annual “In Good Company” conference and we have broadened our scope beyond social investment to envision a more holistic view of how business is uniquely positioned as a platform to be a force for good. To this end, we host regular topical conversations, webinars, and discussions on the Nation Builder online community. We increasingly receive requests to host Collabs across South Africa. In response, we are developing a self-steering Collab toolkit that will enable others to host Collabs in their cities and towns.
Our most important learnings, or those that are foundational to the rest, have been that both business and the NPO sectors have significant roles to play in society. Each equally needs the other to ensure a prosperous future for our country and both sectors require unique skill sets and expertise to navigate the complexities and contexts in which they function. It is therefore essential for both sectors to gain an understanding of the deeper undercurrents that exist within each others context, to better engage in effective partnerships.
For us, as Mergon, this journey has brought about the realisation that our ability to connect and equip others forms a key part of our group’s mandate, one that keeps us learning and constantly improving our approach. It also creates a platform where we can be catalysts for extraordinary social impact through the creative leveraging of our skills, network, resources and assets.
We look forward to a groundswell of profitable businesses who increasingly and holistically live out their purpose and role in shaping the future of South Africa and Africa through a deep awareness that their business is a gift and can be a powerful force for good.