The Motivation for Corporate Institutions to Invest Funds in Public Schools

Abstract

More recently, the state has tactfully appealed to corporate institutions to channel available funds to public schools. The Broad Based Black Economic Empowerment Act of 2003 stipulates that corporate institutions should spend at least one percent of its profit after tax on socio-economic development. Corporate institutions have the option of directing funds to educational institutions or steering funds to institutions outside of education. This paper examines the rationale behind corporate institutions providing funding to public schools: Some of the corporate institutions may want to realise economic growth over the long-term; some hope to gain or sustain consumer and employee loyalty in the short/medium-term. A qualitative research method was used to explore the motivation for corporate institutions, located in the central district of Cape Town, channeling funds to public schools. This study was anchored on the assumption that the sustainability of corporate funding in public schools is dependent on the achievement of high returns (or excessive profits). Some findings revealed that corporate institutions use stringent criteria to provide funds to schools; community relations are strengthened when schools are provided with additional funding; and the sustainability of funds in public schools is potentially dependent on the level of employee and community involvement.

DOI: 10.5901/mjss.2014.v5n23p176