Community trusts are one way that companies dispense funds to specific geographic areas. The intention is for communities to take an active role in identifying and addressing relevant social development issues. But is this truly a more productive, inclusive and sustainable approach than project-based funding?

This was a question posed at the recent Trialogue CSI Conference 2015, held in Johannesburg on 5 and 6 May. Alex Khumalo, Community Engagement Manager, Anglo American Platinum, and Tendani Nelwamondo, Senior Socio Economic Development Specialist, Industrial Development Corporation (IDC), debated the pros and cons of the model, and shared their own experiences of planning and implementing community trusts.

The two participants, and members of the audience, highlighted a number of problems with community trusts in their current form, and discussed ways in which these challenges could be tackled.

Nelwamondo argued that despite their challenges, community trusts provide the best model for communities to mobilize resources and create jobs, and that the ultimate success of the trust is based on how it is structured upfront. The content of the trust deed and a clear definition of the trust’s objectives are critical.

“The objectives can only be achieved if all parties involved have the proper plan to be rolled-out and agreed by all affected relevant stakeholders and role players,” he said.

One of these upfront considerations is the constitution of the Board of Trustees. Trustees have a fairly complex and demanding set of tasks, ranging from communicating with the beneficiaries, to identifying projects, to issues of corporate governance.  Appointing the right people is central to the success of a community trust, but finding suitable trustees is not always easy, particularly in rural areas where literacy and education levels are low and where more educated people tend to move away.

As a result of this rural brain drain, there may be a dearth of candidates who are both involved in the community and sufficiently well educated to handle complex legal and governance issues. A matric is generally regarded as the minimum requirement, said Nelwamondo. The panellists agreed that capacitation of both the board of trustees and the beneficiaries is essential and that education and training must form part of any community trust.

What is very important, said Khumalo, is that trustees take their role seriously and are fully committed to their trustee responsibilities and to good corporate governance. He said, “Trustees are often non-executive. They tend to prioritise their day jobs and pay less attention to the community trust on which they serve.”

Stimulating interest and spreading understating about the community trust and the role of trustees might help to attract suitable candidates, such as local teachers, nurses or doctors, who are educated and who have the community’s interests at heart.

Community trusts risk being high-jacked by local government and “community leaders” looking to advance their own positions. Influencers like chiefs and ward councillors are already stakeholders, with their own priorities, which can make them problematic as trustees.

There are often multiple parties affected by or involved with the trust or its projects, including traditional leaders, traditional council, the municipality, community based organisations (CBOs), non-governmental organisations (NGOs) and communal property associations (CPAs).  It is important to define the roles of all these parties.

Khumalo said it can take years to set up a trust, and that it is important to put resources into that groundwork. “The key thing is engagement. Due to limitations on available resources for operational expenditure, a community trust is often unable to conduct effective engagement with intended beneficiaries. Development initiatives are thus ‘parachuted’ into beneficiary communities who had limited or no participation in the decision-making processes. While a community trust may be non-partisan on paper, the voiceless within the beneficiary community tend to remain voiceless.”

Interestingly, participants were not able to point to a community trust that had successfully navigated these and other challenges to become a catalyst for sustainable community development, and which would provide a great model for others. While many maintain that community trusts are the best available vehicle for community development, it is clear that the challenges are significant and that there is room for improvement to the model and its implementation.

Written by Kate Sidley