Community trusts play a crucial role in broad-based black economic empowerment (BBBEE) transactions and are intended to benefit local mining communities. However, challenges in governance, implementation and ongoing monitoring and evaluation have at times led to ineffective programmes and tensions within communities.
The Community Trust Benchmarking Report, undertaken by Tshikululu Social Investments for Richards Bay Minerals (RBM), identified best practices to strengthen the governance and social development intent and impact of community trusts.
Methodology
This report sets out the key findings from research and interviews conducted between August 2021 and February 2022. Tshikululu employed both primary and secondary data collection methods, namely desktop research, literature and policy reviews and 13 key informant interviews with trustees and management of 11 community trusts.
Tshikululu’s experience in managing social investment trusts over the past 25 years also informed the recommendations presented in the report.
Definition: Community trust
The term is used generically throughout the report to refer to broad-based ownership schemes established to benefit communities.
Recommendations
Purpose
- Community trusts should clearly articulate their purpose and public benefit nature in their objectives and trust deeds.
- Community trusts should define the role the trust intends to play in the community and identify the most important stakeholders.
- A community trust’s strategy should encapsulate its purpose, considering factors such as its size, geographic context, critical stakeholders and the needs and priorities of the beneficiary communities and the founder company.
- To achieve its purpose a community trust should be guided by a well-defined theory of change that considers the context in which it operates and the assumptions, risks and constraints affecting its strategy.
- The development work of the trust should complement the development work of the founding company to enhance the social impact of their collective efforts.
- The independence of the community trust must always be respected to ensure the interests of the community remain front of mind.
Trustees
- A good balance between founder company and independent trustees is essential for effective governance.
- Including community representatives is advisable, given the emphasis on sustainable social investment programmes that benefit the community.
- A board of trustees should be composed of six to nine trustees, including independent trustees with financial, legal and governance skills, founder company trustees and community trustees.
- There should be transparent processes for trustee appointments, especially for community trustees.
- A fixed term for trustees, in accordance with the guidelines of the King IV™ Report on Corporate Governance for South Africa (2016) of three terms of three years, is recommended to promote accountability and continuity.
- Induction and training are essential for all trustees to understand their fiduciary responsibilities, good governance and the relationship between the trust and the founding company.
- Board evaluations should be considered through a standardised process on an annual or biennial basis to identify gaps and improve the board’s effectiveness.

Type of intervention
Average % CSI safety and security spent 2024 n=8
25% Road safety
21% National anti-crime/ safety campaigns
13% Infrastructure, facilities and equipment
12% Non-specific general donations
10% Support of relevant authorities
9% Capacity-building/ empowerment programmes
5% Community policing Forums
5% Gangsterism/ school crime
Oversight
- To support the trust’s purpose and strategy, appropriate governance structures and oversight mechanisms need to be developed by the founding company and the trust.
- Regular and transparent reporting structures and monitoring processes should be agreed upon by all stakeholders to ensure accountability and transparency.
- Establishing board committees to provide assurance is recommended, with an audit, risk and compliance committee being a crucial component.
Operating model and capacity
- While there is no one-size-fits-all operating model for community trusts, it is crucial that sufficient and appropriate capacity is available to ensure effective management, be it internal capacity or outsourced management or a mix of both.
- While community trusts can share services with the founding company in areas where the company has strong expertise or capabilities, it is important that the trust has dedicated capacity focused on programme management, monitoring and evaluation, due diligence and compliance, and community engagement.
- While some functions can be centralised, pathways for community representation, communication, input and feedback should be clear to avoid losing touch with communities.
Beneficiaries
- Community trusts should avoid direct or preferential benefits for any special interest groups, including government and traditional leaders.
- The trust deeds of a community trust should specify that the beneficiaries must be historically disadvantaged South Africans and/or groups or communities living, working or operating in communities related to the founder company, such as operational or labour-sending areas (defined by municipality, kilometre radius from operations, etc.)

33% – Trusts direct benefit to ttrasitional leaders
67% – Trusts that obtain input from communities
44% – Trusts that accept community proposals
56% – Trusts that make only top-down decisions
Community involvement
% trusts
Monitoring and evaluation
- Clear development targets and indicators should be attached to all funds disbursed for community development.
- Disbursed funding should be supported by grant agreements or contracts with performance clauses.
- Monitoring and evaluation (M&E) should be integrated into project planning to ensure effective tracking of outcomes and impacts.
- Capturing and tracking M&E data requires specialised expertise, and employing or contracting such expertise could ensure continuous tracking of the social impact of funding.
Role of the founding company
- Oversight by and connection to the founding company should be maintained while ensuring the trust’s independence.
- Founder trustees can play an important role in linking the trust to the company, ensuring effective governance and building trust.
- Founder trustees can also be responsible for reporting back to the founder company in agreed manners and frequencies.
Community and stakeholder engagement
- Developing an intentional and clear community and stakeholder engagement strategy should be undertaken as it is essential to gaining a deep understanding of each stakeholder’s concerns, and in designing an effective social investment strategy.
- Existing engagement platforms established by the founding company’s operations should be leveraged to avoid duplication and to make use of local knowledge and relationships.
- A conflict resolution mechanism should be included in the trust deed in anticipation of any future conflicts.
CASE STUDY
Royal Bafokeng Nation Development Trust
The Royal Bafokeng Nation Development Trust (RBNDT) makes excellent use of traditional structures and communication channels for community reporting and feedback. These include:
- Regional meetings once a year where traditional councillors account directly to their constituencies.
- Kgotha-Kgothe (annual general meeting) called by the Kgosi (king) twice a year where programmes and audited financial statements are presented to the community.
- Kgotla (ward) meetings once a month, led by the Kgosana (headman), where pressing needs, bursary applications and requests for conflict resolution, among other things, can be raised.
Several companies rely on the community engagement efforts of the parent company’s operations in the area. Sibanye-Stillwater is one of the companies that has developed its understanding of the context through extensive, structured stakeholder engagement.
This includes clustering stakeholders by thematic area as well as in terms of whose needs interventions would most serve (for instance vulnerable or marginalised groups such as women and people with disabilities).
BBBEE partner Ponahalo leverages De Beers and Anglo American’s education programmes by working with the same schools to implement projects. Its trust engages directly with the schools to develop projects and has noted that engaging in this way gives them a sense of ownership over the project.
Working with schools that are already receiving support also helps the trust to achieve economies of scale in its impact by leveraging existing support.
Conclusion
The study highlighted best practices and recommendations for improving the governance and social development impact of community trusts within the South African mining industry. The implementation of these practices, tailored to each trust’s specific context, can enhance the effectiveness and sustainability of community trusts, contributing to more meaningful benefits for mining communities.
Additionally, further policy development and knowledge-sharing across sectors can foster continuous improvement in community trusts, advancing societal development and empowerment.
Find out more
- Download the Community Trust Benchmarking Report 2022.
- Contact Tshikululu Social Investments at info@tshikululu.org.za.
Source: The original version of this article was published in the Trialogue Business in Society Handbook 2023 (26th edition).