For decades, the mining sector has recognised the need to invest in the development of its host communities, both from a regulatory perspective and in recognition of the historical inequities that continue to create socio-economic challenges in communities across South Africa. Community trusts (and similar broad-based community ownership schemes) are one vehicle through which companies seek to benefit communities. However, many trusts struggle to design and implement programmes that can lead to sustainable impact at community level.
In recognition of this, on 19 April 2024, Tshikululu, in partnership with the Minerals Council South Africa, hosted a dialogue on designing and implementing social impact strategies for community trusts. The dialogue was attended by 35 representatives of community trusts and mining companies, and provided a much-needed space to engage with the concept of social impact and how it can be achieved. This dialogue session was the first in a series of gatherings that will enable members of the Minerals Council to share best practice, learning from one another and from experts in the social impact sector. In a session where members engaged with issues such as compliance and regulatory pressures to report on impact, it emerged that many in the sector want to focus on creating and measuring sustainable impact rather than chasing outputs and short-term outcomes.
These dialogues intend to support sector and community trust representatives in strengthening their planning, implementation and impact measurement, with the ultimate goal of creating lasting, positive changes that impact the lives of community members.
Developing a strong impact strategy begins with an understanding of the concept of impact in social investment. Impact refers to the effects or consequences a social investment has on the world, specifically the economic, social and environmental changes experienced by people and the planet as a result of the investment.
Impact strategies require thinking beyond the direct outputs and immediate outcomes of an investment and seeking to create and measure change in terms of what success means for those who will ultimately benefit from it. For example, the construction and handover of a school building may be the direct output of an investment. However, it is hoped that this building would lead to outcomes of increased school attendance and improved learning outcomes. The impact of the investment, then, speaks to the long-term benefit to learners and their communities, such as young people being able to complete secondary school and access future work and study opportunities that will improve their quality of life.
Our 2022 benchmarking study on community trusts highlighted the importance of an impact strategy, finding that the most effective community trusts had a clear strategy that aligned with the trust’s core purpose for existence. These trusts maintained a focus on long-term impact and sustainability, and so their activities were not determined based on individual funding applications or donations, but were rather guided by a clear, impact-driven strategy. There are three main reasons for a community trust to develop an impact strategy:
1. Defining impact in line with the purpose of the trust: To be effective, impact must be intentional, defined and measurable – this requires a clear and relevant strategy. A well-designed impact strategy is based on the purpose of the trust and seeks to achieve it by clearly defining what success looks like and how impact will be achieved. The strategy should encapsulate the purpose of the trust, including what it wants to achieve and for whose benefit. It takes into account factors such as the size of the trust, the geographic context, key stakeholders, and the needs and priorities of the beneficiary communities and the founder company.
2. Managing competing priorities: Community trusts operate in a context of complex and competing stakeholder demands and priorities. A quality strategy is informed by data, typically gathered through a baseline assessment and/or stakeholder mapping, which situates it within an understanding of the context and the various stakeholder groups. A clear understanding of what the trust intends to achieve and how it plans to achieve it plays a role in accountability and transparency: a strategy clearly demonstrates the trust’s intentions, makes it clear to stakeholders where the trust will and will not invest, and provides the basis for communicating and sharing impact.
3. Managing and measuring impact: Without an impact strategy, it is very difficult to measure impact in a meaningful way. An impact strategy illustrates the impact pathways or theory of change underlying the strategy, showing the linkages between activities, outputs, outcomes and ultimately impact. It should include guiding principles of how impact will be measured and managed. Robust impact measurement and management (IMM) and/or monitoring and evaluation (M&E) systems and tools are critical to demonstrating and reporting on impact. Quality IMM/M&E in turn strengthens the implementation of the strategy through continuous learning that enables improvements and adaptations.
Tshikululu supports our clients to achieve the highest social return on their investments: Through over 25 years of experience, we have built unparalleled expertise to support our clients to set the right social impact strategies and implementation plans with the assurance of the highest standards of governance, transparency, and integrity. Every strategy that we co-create with our clients is customised to meet their specific social investment goals, and is grounded in research and strategic stakeholder engagement. In this way, we partner with community trusts and other social investors to co-create solutions that enable them to make the best use of resources in contexts with many competing demands and priorities to create maximum social value.
Tshikululu is South Africa’s leading social investment fund manager and advisor, working alongside investors and other development partners to achieve sustainable social impact.
More information about our services, including impact strategy design, can be found on our website, or you can contact us at info@tshikululu.org.za.
