The Kagiso Trust (South Africa) - Lauren Blythe Schutte
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The Synergos Institute Voluntary Sector Financing Program Case Studies of Foundation-Building in Africa, Asia and Latin America The Kagiso Trust (South Africa) Lauren Blythe Schutte 1997 The preparation of this series of case studies No part of this publication may be reproduced was made possible by support from the Ford or transmitted in any form or by any means Foundation, the Aspen Institute, the C.S. Mott without the permission of The Synergos Insti- Foundation and the Compton Foundation. tute.
The Kasigo Trust (South Africa) Voluntary Sector Financing Program Case Studies: • The Foundation for the Philippine Environment • The Esquel Ecuador Foundation (Fundación Esquel-Ecuador) • Child Relief and You - CRY (India) • Foundation for Higher Education (Colombia) (Fundación para la Educación Superior - FES) • Philippine Business for Social Progress • The Puerto Rico Community Foundation • The Mexican Foundation for Rural Development • The Kagiso Trust (South Africa) Cross-Case Analyses: • Formation and Governance • Organizational Financing and Resource Generation • Program Priorities and Operations
Contents
Synopsis 1 Sources 29
Preface 2 Addendum: Kagiso Trust Today 30
Genesis and Origins 5 Tables
Setting up the Trust 5 1: Kagiso Trust Staffing Pattern 16
Phases of Organizational Development 7 2: Donor Funds Received 22
New Challenges 10
Annexes
Governance 12 1: Kagiso Trust Organizational Chart 32
Mission and Vision 12 2: Kagiso Trust Regional Offices 33
Board of Trustees 13
Levels of Management 14
Kagiso Trust Staff 16
The Administration of Funds 17
Program Operation and Evolution 18
Programs in Operation 18
Grant Disbursement 20
Financing KT 22
Future Sources of Funding for the
Kagiso Trust 23
Conclusion 27The Kasigo Trust (South Africa)
Glossary of Acronyms
ANC African National Congress
CBO Community-based organization
COSATU Congress of South African Trade
Unions
EC European Community
EU European Union (EC after 1990)
GSP&DM Graduate School of Public and
Development Management
(University of Witwatersrand)
IDT Independent Development Trust
KT Kagiso Trust
KTI Kagiso Trust Investments
NGO Nongovernmental organization
RDP Rural Development Programme
SACBC South African Catholic Bishops
Conference
SACC South African Council of Church-
es
SANAM South Africa-Namibia Committee
TNDT Transitional National Development
Trust
UDF United Democratic FrontSynopsis distribution and infrastructure development.
One example of this is Kagiso's taking advan-
Origins tage of the need for new text books in post-
The Kagiso Trust was born as a result of the apartheid South Africa by purchasing a major
creation of the European Special Programme publisher of school texts.
for the Victims of Apartheid in 1985. Through
Another recent avenue for funding is proceeds
a process of dialogue between the European
from a national scratch card lottery. In 1995
Community and South African organizations,
this was providing over $130,000 per month.
particularly the churches, this indigenous
development entity was created in 1986 to
serve as
Governance
a conduit for official development assistance
A fifteen-member board is the organization's
from Europe to South Africans, bypassing the
policymaking body; it includes two black
apartheid government.
women and three white men. The staff is led by
an executive committee including the CEO
and five other top managers. In practice, most
Financing
new policy emanates from the executive com-
The Kagiso Trust funds its operations through
mittee.
grants from official international donor agen-
cies and foundations. Its financing rose from The composition of the Trust's staff has
just $1.5 million to a peak of $58 million in changed over time as the focus of the organi-
1992. The European Union has been the zation has shifted more to development.
largest donor, followed by Japanese, Canadi-
an and Scandinavian aid agencies.
Programs
Now it faces an uncertain future due to the end
Program areas include community-based
of apartheid; that positive development means
institution building and development, primary
that international donors are increasingly
health care and AIDS awareness and preven-
channeling their resources directly to the
tion, micro- enterprise development, and edu-
democratically elected South African govern-
cation and training. Making a grant application
ment.
to the Trust has been complicated and time
The Trust is exploring the creation of an consuming, due to the need for the applica-
endowment with local and foreign funds from tion to not only be approved by KT staff and
development agencies, foundations and cor- board, but also by the head of the EU's devel-
porations. It has been registered as a charita- opment ministry and other EU officials. Con-
ble organization in the US to encourage con- sequently, beneficiaries of KT have expressed
tributions to it. However, prospects for build- frustration at the long delays in receiving
ing the endowment remain uncertain. money.
To earn income, the Kagiso Trust recently cre- Between 1987-1994, the Trust channeled
ated an investment company to support its approximately US$200 million from external
work and simultaneously to address other vital donors to support projects in South Africa.
issues such as job creation, skewed wealth
1The Kasigo Trust (South Africa)
Preface
Background
In Africa, Asia and Latin America, citizen par-
ticipation through a range of civil society orga-
nizations has become a growing and vital
force. Civil society organizations have brought
significant material and human resources from
the community level to bear on poverty prob-
lems through donations of time, energy, mate-
rials and money.
Locally managed and controlled organizations
that provide direct financial support to other
organizations within their societies have been
established over the last decade in many
southern countries. A few were established
twenty or thirty years ago. These organiza-
tions are injecting critical financial as well as
technical resources into local civil society and
mobilizing resources from a wide variety of
sources both domestic and international for
this purpose.
Few of them were created with a single large
endowment, as was the case with most north-
ern private foundations. Most of them rely on
a wide range of strategies to mobilize financial
resources including earned income contribu-
tions from individuals and corporations and
grants from international organizations. Some
managed donor-designated or donor-advised
funds following the US community foundation
experience.
General consensus over terminology has yet
been reached; these new types of organiza-
tions are usually referred to as "foundations"
or
"foundation-like organizations." Though many
of these organizations have adopted legal iden-
tities as foundations or trusts, others are regis-
tered as nongovernmental organizations. In
general, they differ in many ways from their
2northern counterparts . For example, they are tions and other financing organizations,
more likely to mix program operation with accepted the task of producing case studies
grantmaking. Many of them act as convenors of these organizations. These papers are one
of civil society groups, as bridging institutions of the products resulting from this effort.
to other sectors of society or as technical
Methodology
assistance and training providers.
A Global Advisory Committee of southern
To distinguish this type of southern founda- foundations guided the two-year effort by
tion-like organization from northern founda- Synergos. The advisors selected eight geo-
tions we can use a term such as "community graphically diverse cases from over sixty orga-
development foundation" or "southern foun- nizations identified through an initial survey.
dation" or use a new term. One new term Local researchers were retained in each coun-
which has been try and the Synergos research team worked
proposed is "civil society resource organiza- with them and the Advisory Committee to
tion" or CSRO. This term refers to organiza- develop a common protocol.
tions which combine financial assistance to
The protocol hypothesized four areas as key
community-based organizations and NGOs
to the operational effectiveness and sustain-
with
ability of southern foundations: origins and
other forms of support for organizations or the
genesis of the institution; institutional gover-
civil society sector as a whole. In this series of
nance; program evolution and management;
papers we will use the terms "foundation"
and financing. The case researchers studied
and "civil society resource organization" inter-
these issues via
changeably.
multiple data collection methods and sources.
This expanding universe of foundations/civil The primary method was to conduct direct
society resource organizations around the structured interviews with individuals involved
world has not been systematically studied. As with each case organization, including board
one of the first steps towards developing an members or trustees, the managing director,
understanding of this sector, Synergos staff members, grant recipients, and other
responded to a request from a group of relevant organizations. In addition to inter-
southern foundations. In April 1993, a group views, researchers gathered mission and
of foundations from a dozen southern coun- vision statements, annual reports, operating
tries met with northern foundations and official strategies and plans, internal and external
foreign aid agencies to discuss the emerging evaluations, financial plans and administrative
role of foundations in strengthening civil soci- procedure manuals. Data collected by the dif-
ety in Africa, Asia and Latin America. A major ferent methods were systematically organized
outcome of the discussion was a decision to into distinct databases which were the basis
learn more about how these organizations are for each written case study. The case studies
created, how they develop and evolve, and were coordinated by the Synergos research
how they sustain themselves as philanthropic team, which then provided the funding to a
entities. The group decided on case studies cross-case analysis team for the preparation
and analysis as the most fruitful approach. of three analytical papers. The two teams pre-
The Synergos Institute, which works with local pared condensed versions of the case studies
partners to establish and strengthen founda- for publication.
3The Kasigo Trust (South Africa)
Acknowledgements
The case study project has involved the talent
Use of the Studies
and contributions of many individuals and
The eight case studies bring to light key fac-
organizations over the last two years. We
tors that have led these organizations to be
would like to acknowledge their efforts and
successful, and the studies document the cru-
emphasize that the project would not have
cial processes they have gone through to
been possible to complete without their con-
respond effectively to the needs of their
tributions:
national civil societies. Across the very differ-
ent conditions that brought about their forma- • The Global Advisory Committee: Graça
tion, the cases reveal that foundations/CSROs Machel, Foundation for Community
can play a Development, Mozambique; Cornelio
central and strategic role in strengthening civil Marchán, Esquel Ecuador Foundation;
society. Their comparative advantage as Ethel
resource mobilizers enables them to have a Rios de Betancourt, Puerto Rico Community
large effect both in stimulating new financing Foundation; Kamla Chowdhry, Center for
and connecting financial resources to the Science and Environment, India; Aurora
community-level where they can have the Tolentino, Philippine Business for Social
greatest impact. In particular, they have Progress; Paula Antezana, Arias Founda-
excelled at: tion,
Costa Rica; Maria Holzer, Polish Children
• providing seed resources for the growth of
and Youth Foundation; Eric Molobi, The
civil society organizations in their countries;
Kagiso Trust, South Africa.
• leveraging diverse sources of financing for
• The case writers: Teresita C. del Rosario,
the projects and programs of civil society
Alejandra Adoum with Angela Venza,
organizations;
Anthony D'Souza, Alfredo Ocampo
• assisting northern foreign aid to be Zamorano with Margee Ensign and W.
channeled to civil society in more sustain- Bertrand, Victor E. Tan and Maurino P.
able and Bolante, Maria del C. Arteta and William
effective ways; and Lockwood-Benet, Victor M. Ramos Cortes
and Lauren Blythe Schütte.
• acting as an interface for public policy
dialogue between civil society and the • The case studies research team: Betsy
government and business sectors. Biemann, S. Bruce Schearer, John
Tomlinson, David Winder and Eliana Vera
The case studies and the related analytical
at The Synergos Institute and Catherine
papers are a useful tool for those who wish to
Overholt at the Collaborative for
build foundations/CSROs around the world.
Development Action.
Synergos hopes they will be widely used as a
catalyst for the development and strengthen- • The cross-case analysis team: Darcy
ing of this important group of institutions that Ashman, L. David Brown and Elizabeth
provide financing to the voluntary sector. Zwick at the Institute for Development
Research.
4Financial support for the project was provided Genesis and Origins
by the Aspen Institute, the Compton Founda-
tion, The Ford Foundation, The W.K. Kellogg The Kagiso1 Trust, a major nongovernmental,
Foundation and the Charles Stewart Mott nonprofit, national development agency —
Foundation. and the largest black-led organization of its
kind in South Africa — sees the poorest and
In addition, a number of individuals made very
most marginalised communities as its natural
important contributions to various aspects of
beneficiary constituency. The organization was
the research: Kathleen McCarthy at the Center
born out of a dialogue between leaders in
for Philanthropy, City University of New York,
South Africa’s “democratic movement” and
and James Austin at Harvard University pro-
members of the European Community (EC)
vided valuable research advice; staff and
around European foreign policy during the
board members of the case organizations
1980s — a decade characterised by extreme
gave time, interviews and key background
repression and country-wide insurrection
materials;
against the apartheid regime, manifested in
Yvette Santiago, Miriam Gerace Guarena,
daily confrontations between local communi-
Amelia Moncayo and Armin Sethna assisted in
ties and security forces. During this time a
the coordination and production of the study
range of allied organizations, including
documents.
churches, human rights groups, the alternative
press and service organizations, emerged in
support of the United Democratic Front2 (UDF)
and the Congress of South African Trade
Unions (COSATU).
The EC had been involved in development
cooperation in the region since the 1970s,
introducing a code of conduct for EC firms
operating in South Africa in 1977. In 1980 it
provided financial assistance to the Southern
African Development Community (SADC), an
alliance of southern African countries formed,
among other things, to reduce their economic
dependence on South Africa. In September
1985, EC foreign ministers met in Luxembourg
to design a response to the national state of
emergency that had been declared in South
1 Kagiso is a Setswana word
meaning “peace,” and the
Africa. Leaders from the UDF and the South
Trust’s emblem symbolizes African Council of Churches (SACC) were pre-
peace.
sent, and called for the imposition of interna-
2 The UDF was formed in 1983
and constituted the first nation-
tional economic sanctions against South
al political center to provide Africa. The rationale was that sanctions would
grass-roots movements with a
hurt the ruling party and white elite in two
vehicle to link local grievances
with national political demands ways — symbolically, by isolating them from
5The Kasigo Trust (South Africa)
the rest of the world, and financially, by cur- Setting up the Trust
tailing investment in the country. But these The Trustees and leadership of Kagiso Trust
leaders were also concerned about helping (KT) had strong roots in the anti-apartheid
those who were the victims of apartheid, par- struggle and imbued the organization with
ticularly since government development initia- legitimacy. Ecumenical leaders played an
tives were inadequate or non-existent. important role in establishing the Trust and
many of those individuals still remain involved
Out of this dialogue, a twin-track approach
as members of the Board of Trustees. Euro-
was adopted by the EC, that included restric-
pean member states were nervous about UDF
tive as well as positive measures to “hasten
political connections with the exiled African
the total abolition of apartheid through diplo-
National Congress (ANC) but were reassured
matic and moral pressure combined with
by the involvement of respected members of
active support
the religious community in South Africa. How-
of the process for peaceful change within the
ever, most of these individuals, although expe-
country.” Restrictive measures included dis-
rienced in running social projects implement-
couragement of linkages on the military, acad-
ed by the churches, lacked experience in
emic and sporting front, a ban on new invest-
wider development issues, given the political
ments and on the importation of South African
climate of the time.
iron, steel and gold coins.
Initial discussions with the EC had spawned
Positive measures included strengthening a
the idea of setting up a “consortium.” But
code of conduct and implementing the Spe-
Yunus Mohammed, a Trustee brought in for
cial Program to Assist the Victims of
his legal expertise, felt that this would not pro-
Apartheid. This program was launched after
vide an appropriate vehicle for disbursing
consultation with South African church lead-
funds and would be legally unworkable. After
ers, and it was decided to make European
further discussions, it was decided that a
funds available to the
Trust deed would be established. This deci-
victims of apartheid through South African
sion was determined more by the political sit-
conduits with strong links to the democratic
uation at the time than by drawing on the
movement. Three channels for transmitting
experiences of other foundation-like organiza-
European money were identified: the trade
tions elsewhere. Uncertainty as to how long
unions, the SACC, and the South African
the Trust would even be in existence meant
Catholic Bishops Conference (SACBC). But
finding the simplest mechanism that allowed
church and UDF leaders felt that a new, secu-
the organization to receive and disburse
lar organization needed to be set up to admin-
money. No feasibility study was conducted
ister these funds. Thus the Kagiso Trust was
due to the insecure environment in which
established in 1986. Between 1987 and 1994,
repression of community activists
the Trust channeled over R750 million of grant
was rife.
aid (approximately US$200 million) into a vari-
ety of programs, stimulating many communi- In the words of Mohammed, the Trust would,
ties by providing employment, education, ”provide a legal framework for establishing a
housing and social empowerment. mechanism to receive funds, administer them
and disburse them, whilst providing the flexi-
bility to structure it in a way which allows [it]
6to achieve [its] objectives.” Office of President Nelson Mandela;
As soon as the deed was drawn up, with the • Dr. Allan Boesak, former President of the
advice of the auditing firm of Price Water- World Alliance of Churches; and
house, the founding members set about build-
• Yunus Mohammed, attorney and human
ing a Board of Trustees. Once the Board was
rights lawyer; director of the Independent
composed, a second Trust deed including all
Electoral Commission; Chairman of the
Trustees was registered with the government.
While an effort was made to include individu-
Board of Directors of the Community Bank.
als from education, churches, academia, and
the legal profession, no “suitable” candidates As a legal structure, previous and present staff
were found to represent women and so space and Board members, feel that a Trust has
was left for additional Trustees. The composi- been a suitable vehicle for the work undertak-
tion of the first Board of Trustees seems to en by KT. The drafting of the KT Trust Deed,
have relied on the existing networks of the however, cannot be seen as a model as it was
founding members rather than making a con- drafted in a time of crisis. Among other things,
certed effort to ensure broad representation. the deed made no mention of the length of a
term of office for a Trustee nor did it provide
The founding members who continue as cur-
for dismissal or re-election of Trustees. Kagiso
rent Trustees include:
is currently reviewing its Trust deed.
• Archbishop Desmond Tutu, Anglican
Archbishop, Nobel Peace Laureate;
Phases of Organizational Development
• Dr. Beyers Naude, former Secretary Gener-
In its short history, Kagiso Trust has passed
al of
through two distinct phases. In the early days
the SACC, currently with Ecumenical
of its existence, political uncertainty and state
Advice Bureau;
repression made it impossible to fund any
• Fr. Smangaliso Mkhatshwa, MP, President long-term development projects, so the focus
of the Central Transvaal Civic Association, was on championing the anti-apartheid cause
and providing assistance to “victims of
member of the Institute for Contextual apartheid.” In the main, Kagiso funded educa-
Theology; tional initiatives, projects offering para-legal
3 For instance, the Weekly Mail advice, and service-oriented NGOs engaged
& Guardian of April 1-7, 1989,
• Dr. Abe Nkomo, MP, medical doctor, active in providing assistance to community-based
reports on security police tam- in organizations and civic movements.
pering with the locks on KT’s
the civic movement;
Durban office, searching
through drawers, and roughing
In 1990 — at the beginning of the transition
up Mohammed when he caught
• Dr. Max Coleman, MP, member of the which culminated in the inauguration of the
them. Human Rights Commission; country’s first democratically elected Presi-
4 Fundraising numbers tended
dent in 1994 — Kagiso Trust decided to trans-
to be granted only to those • Rev. Frank Chikane, former Secretary
organizations considered friend- form itself from being solely a conduit of for-
General of the SACC;
ly to the government. The Trust eign funds into a fully-fledged development
never received this number, but
the corresponding legislation is
• Professor Jakes Gerwel, Director-General agency, engaged in complementing state
currently under review. in the efforts in collaborative ventures to provide
7The Kasigo Trust (South Africa)
new and alternative solutions to development were secretly searched by police in the middle
problems. It began to play a major role in the of
formation of development policy through the night.3
involvement, at an Executive level, in national
In terms of legal constraints, the government
fora such as the National Housing Forum and
failed to grant KT tax exempt status, and
the National Drought Consultative Forum set
refused it a fundraising number, which made it
up in 1992 to coordinate drought relief in
difficult for KT to raise money internally.4 In
South Africa.
addition, it attempted to impose certain con-
trols on organizations receiving money from
overseas under the Promotion of Orderly
1986-1989: The Early Years
Internal Politics Bill, which was ditched after
In 1986, Ahmat Dangor, an active member of
an outcry. A more sanitized version, the Dis-
the UDF and at the time in a senior manage-
closure of Foreign Funding Bill, was subse-
ment position with an American cosmetic
quently introduced, which required disclosure
company, was approached by Dr. Naude to
of the sources and details of how money was
help set up Kagiso Trust. Dangor had previ-
to be used.
ously been placed under a six-year banning
order which ended in 1979. He became the Kagiso seemed set for a head-on collision
Executive Director of Kagiso Trust and set up with the government, as it was determined not
the office staffed, by himself and a secretary. to comply with the Act. Trustees could face
criminal charges for non-compliance, a fine of
The organization grew rapidly. In 1987, grants
R40,000 (US$19,704 in 1987 terms), and three
received amounted to just over R3million
years imprisonment. If the Trustees were
(US$1.5million) and, within three years, had
found guilty, the act gave the courts permis-
grown to over R27.5 million (US$10.5million).
sion to send the funds back to donors, or,
This rapid growth made regional offices and
where these could not be verified, to a Regis-
regional committees a necessity. In 1987,
trar for Foreign Funds. The Registrar was enti-
offices were opened in Johannesburg (cover-
tled to forward the funds to the Minister of
ing the Transvaal, Orange Free State and
Finance who would decide how the money
Northern Cape), Cape Town (Western Cape),
was to be spent. KT Trustees embarked on a
and Durban (KwaZulu-Natal) (see Annex 2).
political campaign to get the government to
The Port Elizabeth (Eastern Cape) office was
back off. Delegations were sent to the govern-
opened in early 1991. In its second year of
ment, to the Europe Community, and to for-
operation Kagiso Trust employed twenty-six
eign embassies to apply pressure on the
people. By 1992, staff totalled sixty-two and
National Party to desist from enforcing the
donor funds peaked in 1993 when R177 mil-
Act.
lion (US$54million) was received.
Dangor describes those early years as a roller-
During this time, the white-led National Party
coaster ride. He played a role in promoting the
government made repeated attempts to close
anti-apartheid cause through many trips to
down the Trust using a two-pronged strategy
Europe and the Americas and, while coping
by harassing staff and Trustees and imposing
with this grueling travel schedule, also had to
legal constraints. Many of KT’s key Trustees
deal with project conceptualization and
and staff members were detained and offices
8administration. coming in.”
During the early years, the EC provided all The relationship between Kagiso Trust and the
support to South African projects through European NGOs experienced some difficul-
European NGOs with activities in South Africa. ties. Dangor believes that some of the Euro-
Seamus Jefferson, previously from the EC’s pean NGOs saw the Trust as nothing more
South Africa desk in Brussels, explains that a than a convenient conduit of funding that they
project had to be driven by a local NGO and could use to work with communities and
generated from within South Africa. In addi- NGOs
tion, European NGOs which acted as financial directly. He claims that several European
agents for EC funding had to demonstrate NGOs began subtly to undermine Kagiso
that they were adding value to the project by Trust, bypassing it, making offers to commu-
being involved. The European NGOs benefited nities directly, and expecting KT to send the
directly from the relationship as they received documents to Brussels. He attributes this to
5% of all the money that came into the coun- their belief that KT did not have the capability
try. to do the job. There were, however, many
European NGOs he quoted as being support-
The criteria set by the EC for channeling
ive and interested in putting a project on the
money for projects were very broad: projects
ground, not in controlling it.
had to be anti-apartheid and to espouse non-
racialism. Programs and projects were aimed Given the number of European NGOs involved
at broad categories: human rights; youth; in South Africa, a collective vehicle needed to
women; and education — essentially organi- be established to facilitate communication
zations involved in promoting democratic between them and the EC. Secular NGOs
change and assisting victims of apartheid. were brought together under the umbrella of
the South Africa Namibia Committee (SANAM).
Working through European NGOs was seen as
Protestant and Catholic NGOs each had their
beneficial on a number of levels. Given the
own collective body and all three came togeth-
state’s attempts to force disclosure, it was
er in what was called the Standing Committee.
tactically better for money to come from more
Horst Kleinschmidt, currently KT Deputy Direc-
5 In general terms, civics are than one source. Further, an early focus of
tor who was in exile at the time, was a found-
nongovernmental, community- activities was organizational development and
based organizations represent- ing member of SANAM and the Standing
capacity building within the South African
ing their constituency in civic Committee.
affairs and asserting rights to organizations that were chosen to run projects.
better infrastructure and ser- This relationship was seen as a way to transfer In 1990, the EC wished to reduce the adminis-
vices. In South Africa, the term
refers to the many radical civics
organizational capacity. Furthermore, contrac- trative costs of sending money to South Africa
which emerged in the 1970s tual arrangements were between the Euro- and ended this arrangement, a move which
and ‘80s in African, Coloured (a
pean NGOs and Kagiso Trust and it was the caused tensions between Kagiso Trust and
South African term for people
of mixed heritage), and Indian responsibility of the European NGO to provide the European NGOs that remain unresolved
areas. They combined a con- the reporting needed by the EC. Kleinschmidt even today. When the European NGOs were
cern on civic issues with a
describes the process as a “very cumbersome cut out of the cycle, there was a short time
commitment to political change.
Many civics saw themselves route but it was a way to diversify the field as when SANAM became a facilitating body for
aligned with banned liberation much as possible to make it difficult for the Kagiso Trust but this, too, was eventually dis-
movements, especially the ANC
(Seekings, 1993, p. 2.)
South African government to stop money from solved.
9The Kasigo Trust (South Africa)
Looking back over those early years, Dangor anti-apartheid struggle at a time when political
gives a vivid description of the difficulties fac- leadership was being crushed and driven
ing an organization “fighting a political battle underground. The development and survival of
at the same time as trying to pioneer new “civics”5 was possible through KT resources
concepts in development.” Many leading and other resources Kagiso identified for
SACC and SACBC figures and community them. The greatest difficulty during those early
activists were in hiding or detention. The basis years was that, while the rest of the develop-
of KT’s operations had perforce to be confi- ing world was tackling development, South
dential. Records and documentation were Africa was still struggling with political reform
kept to a minimum, with briefcases serving as and Kagiso Trust was never able to be primar-
mobile filing cabinets (Seekings: 1993, p.9). ily a development organization. In the words
Dangor describes incidences of destroying of Nkululeko Sowazi, currently Deputy Pro-
computer disks and documents in airports jects Director:
and during flights in case he was caught by
Most of the organizations we
the authorities with information on him. In his
funded…were assisting communities in
words:
keeping their heads above water as far as
State institutions, from Foreign Affairs to apartheid structures impacted on them.
Finance to Treasury to provincial govern- There was no classically developmentally
ment to the police, did everything they funded project focus at that time, because
could to make life difficult for us. Some- there was no political space to do that…
times our
projects couldn’t function. They were shut
down, their funds were confiscated. We
ended up with enormous legal battles
against the government.…The drain on
our energies was great.
He feels that expectations and a “culture of
entitlement” developed among some commu-
nities and organizations who thought their
anti-apartheid credentials entitled them to
receive money. He expresses concern that
dependency developed within the NGO com-
munity and empires were built which are now
in trouble.
Nevertheless, Dangor looks back with a sense
of achievement. “What we achieved…was, in
6 SACC and SACBC set up
a sense, to introduce to South Africa and to
JEP because they were con-
South African communities the sense that we
cerned that the popular strug-
gle against ‘Bantu Education’ could determine our destiny in development
would destroy the culture of terms.” He also feels that Kagiso Trust was
learning. JEP provided creative
skills programs in art, drama
able to play an important role in sustaining the
101990-1995: The Road to Democracy and becoming Executive Director in 1991. Molobi
Development had been chosen as a Trustee in 1986 by the
In December 1989, Kagiso Trust hosted a founding members because of his experience
conference entitled “From Opposing to Gov- in education. Dangor, by his own admission,
erning: How Ready are We?” During that con- had become quite a controversial figure in
ference Trevor Manuel, a prominent UDF South Africa during the years that Kagiso
activist, posed the probability that in five years Trust engaged primarily in anti-apartheid activ-
the democratic movement would be in power. ities. Dangor explains:
He said it was time to stop thinking like peo-
ple in the opposition and begin thinking like “The concept [of a development agency]
people who would govern. had reached maturity and the time had
come… to give momentum to this whole
Events, however, moved much faster. The very new development direction and Eric was
next year proved to be a watershed for South ideally suited to that.…In a way this did
Africa with the unconditional release of Nelson two things: it removed the controversies
Mandela in February 1990. The new political and the arguments centered round me for
space held out the possibility for real develop- many years so that the British government,
ment to take place in the “new South Africa.” for example, suddenly withdrew its opposi-
Resistance was no longer an appropriate tion to Kagiso Trust. And secondly, it
strategy and NGOs found themselves needing allowed us to introduce the development
to reorient their activities to meet the emerg- focus
ing challenges of development. unambiguously…”
Kagiso Trust began a deliberate evolutionary Molobi had been imprisoned on several occa-
process away from being a covert funder of sions between 1970 and 1989 by the Nation-
apartheid victims towards becoming a non- alist Party government and was incarcerated
governmental development agency. The deci- for eight years on Robben Island. In 1986 he
sion marked a shift in mission and approach was one of the first South Africans to meet
from the earlier, more adversarial commitment with the ANC in exile, calling on it to use its
to abolish apartheid towards the promotion of influence to persuade pupils to end the school
community-based initiatives and empower- boycotts.
ment. The move was also perceived as impor- He played a leading role in the NECC (Nation-
tant in moving the organization away from al Education Crisis Committee/later the
7 The IDT dates from 1990,
dependence on external financial support to National Education Coordinating Committee)
when R2 billion of the 1989/90
the “mobilization of development resources and he worked in the Joint Enrichment Pro-
fiscal year surplus was set
aside to address the plight of (financial and technical) and development gramme (JEP).6 The NECC was formed in
the very poor. After in-depth facilitation” achieved through “complementing 1985 in an attempt to ensure that children and
consultations with a wide spec-
trum of individuals and interest
state efforts [as well as] engaging in collabora- students were educated in an appropriate
groups to ascertain community tive ventures that context and manner, a task abrogated by the
development needs and priori-
provide new and alternative solutions.” (Kag- State which was still committed to the con-
ties, by November 1991 the IDT
had identified a comprehensive
iso Trust Review 1994/95). cept of Bantu (ethnically-based) education.
list of projects relating to edu-
cation, housing and health and An important event during this period was a
R1 600 million were set aside leadership change, with Trustee Eric Molobi
for these projects. New Challenges
11The Kasigo Trust (South Africa)
The period since 1990 has seen vast changes non-racist, and non-sexist future.” This raises
in South Africa. NGOs find themselves in a some delicate challenges for nongovernmen-
fluid and complex environment where compe- tal development organizations like Kagiso
tition for resources has increased as the range Trust since the RDP is now touted as synony-
of actors in the development field has mous with development and anything happen-
expanded. Some of the ensuing issues ing outside its structures is likely to be regard-
impacting KT’s existence and operations are: ed with suspicion. KT has thus had to redefine
itself in terms of the RDP.
EU’s In-country Presence and Government
Links The Transitional National Development
In 1991, the European Commission (now Trust
known as the European Union or EU) set up Since its election, the new government has
its own Programme Coordination Office in wanted to establish a single grantmaking insti-
Pretoria, seeking to be more directly involved tution — the Transitional National Develop-
in identifying, assessing and monitoring pro- ment Trust (TNDT) — and has sought help from
jects. This effectively ended the historical Kagiso and the Independent Development
relationship of European NGOs and KT in Trust (IDT).7 According to Kleinschmidt, KT’s
channeling funds into South Africa and response is
removed the exclusivity of the four South to say:
African channels (the SACC; SABC; KT, and
Let us address what it is that the government
the Trade Unions). But despite the de facto
wants to achieve, by creating a suitable struc-
loss of status, this relationship continued de
ture to which Kagiso and the IDT can second
jure for some time because the EU office did
part of their structure or staff. That does not
not have the administrative capacity to deal
mean that you have to take away the purpose
with a large volume of project proposals, while
of either structure. Both of them have a dis-
Kagiso Trust did. In 1995, however, the EU nor-
tinctive culture with very strong programs in
malized relations with the Mandela govern-
the field and to merely take that away would
ment and established bilateral funding agree-
actually be quite destructive.
ments.
The TNDT is envisaged as a separate body,
with both KT and the IDT contributing to its
The Reconstruction and Development formation. The CEOs of KT and the IDT will be
Programme seconded to the TNDT, becoming the CEO
In 1994, the new government adopted the and Deputy CEO respectively. KT and the IDT
Reconstruction and Development Programme will contribute five members each to the
(RDP) as the national development policy Board of Trustees, which will also include rep-
framework after months of consultation within resentatives from NGOs, CBOs (community-
the ANC, its Alliance partners, and other mass based organizations), and government. The
organizations. In its own words, the RDP TNDT will be the direct link to the RDP office
seeks to mobilize the people and resources of for these two
South Africa towards the “eradication of organizations.
apartheid and the building of a democratic,
12This new Trust will become the major national
funding agency making KT’s role in this
respect redundant. While both IDT and KT will
fulfill existing contractual obligations, there is
a sense of urgency for KT to focus and define
its expected new role as an implementing
agency.
13The Kasigo Trust (South Africa)
Governance • Provide those disadvantaged by apartheid
with access to skills and resources;
Mission and Vision
• Help create a vibrant nongovernmental
As already indicated, changing times have
prompted a changing mission and vision of
sector, working constructively with
possibilities for Kagiso Trust and other devel-
government and the private sector;
opment-oriented NGOs throughout South
Africa. The lack of a single mission statement • Entrench environmental sensitivity as
in KT’s current publications points to the tran- an integral part of the development
sition that the organization is undergoing. process; and
While the activities of Kagiso Trust are well • Consciously promote gender sensitivity,
known through word of mouth, the reformulat-
ed mission and vision is being communicated especially the rights of rural women.
to the public via official brochures as well as
through actual funding practices and deci- At this point in Kagiso’s program evolution,
sions. An organizational pamphlet describes focus seems to be of paramount importance.
the Deputy Director Kleinschmidt explains:
Trust as:
If we do not have a focused approach to
…a nongovernmental, leading edge, South development and say this is what we are
African development finance organization. doing and this is what we are not doing —
It is non-partisan in nature, encourages the we will probably lose ourselves along the
maximum participation of the most margin- way completely. Within that focus we will
alized and contributes to reconstruction have certain priority areas. So that is one
and development. It strives for an equi- shift from having received applications
table, united and democratic society that is from the entire spectrum to saying we are
free from poverty. Kagiso Trust aims at going to specialize. Secondly that we
contributing meaningfully to strategies, develop a vision of developmental pro-
programs and projects that seek to over- grams rather than projects.
come the legacies of apartheid.
Accordingly, KT has decided not to fund hun-
The 1994/95 Kagiso Trust Review says that dreds of small, independent projects but
the Trust aims to: rather to focus on funding programs, which as
Molobi puts it, “might be bigger, more pro-
• Contribute to the planning and found development work or might consist
implementation of the RDP; sometimes of some of the small ones con-
tributing to
• Promote and facilitate projects enabling
the whole.”
communities to achieve self-sufficiency; The changed relationship with the EU has
meant that KT has had to streamline its inter-
• Build integrated development programs at
ventions and programs. It now describes its
grassroots level that can be sustained and
primary development function as “the provi-
replicated elsewhere;
sion of financial and technical resources to
14community based development initiatives and in touch with communities. To support the
service-oriented nongovernmental organiza- Executive Director, staff with development
tions.” In experience were recruited including Deputy
addition to its role in mobilizing development Projects Director Sowazi, who holds a devel-
resources, Kagiso Trust will engage in collabo- opment degree from UCLA, Deputy Director of
rative ventures that provide new and alterna- Planning Thabiso Ratsomo, and Deputy Direc-
tive solutions to development problems and tor Kleinschmidt. This group serves as the
which complement state (RDP) efforts. agent that drives changes
in the broad strategic thrust of KT and in
Executive Director Molobi explains: “The Euro-
redefining its vision.
pean Union is eager to fund what is perceived
to be correct by government .… So we have They claim that they rely on their team of field
to touch base with what government is doing workers, who visit communities that have
and see where the gaps are and take the gaps applied to Kagiso Trust, to articulate the vision
and inform government and sit down with the and thus to determine program priorities. Field
European Union to design projects.” workers feed their experiences and ideas to top
management via seminars and workshops.
Deputy Projects Director Sowazi says that the
Drawing on the information gained from this
Trust is aiming to concentrate in two areas —
process, Kleinschmidt and Sowazi drew up a
supporting local initiatives in specific sectors
document outlining KT’s vision for the future.
and “model building.”
When they handed this document to KT field
The first aim is…a facilitation and capacity workers, the response was apparently favor-
building effort…to assist at a very local level, able. A small team of Trustees who, in the
those small fledgling, struggling initiatives words of Kleinschmidt, “have the space and
around who are energetic enough” are being drawn
specific sectors. What we mean by “model into the process to refine the vision.
building” is to really engage in what we would
Community groups are not directly involved in
call joint-venture type projects with other rele-
8 The NHF represents diverse articulating the priorities, mission or vision of
vant stakeholders.…Typically what you would
interests, including political Kagiso Trust and have little influence in deci-
organizations; financial institu- have here is a project or program that seeks
tions; trade unions; develop-
sion- making. Nor have national and local
to provide an alternative, innovative, creative
ment institutions; mortgage government structures, but this is likely to
lenders; insurance companies; solution to a development problem, usually in
change given
construction and building con- an area of mass need and this can be replicat-
sortiums; civic organizations
the new environment in which donors would
ed or taken on or learnt from by other bigger,
and the Government. In the rather see money going directly to govern-
words of Molobi, “Prior to the more impacting players, like the state or the
ment structures.
formation of the NHF, there was private sector.
no national housing strategy;
only an ethnic one.” KT has
Since 1990, when its Trustees saw the poten-
secured R2.5 million from the
tial to finally “do development,” the Kagiso Board of Trustees
EU for the NHF.
9 In April 1996, Mr. Naidoo was Trust’s mission and vision has been largely KT’s fifteen-member Board of Trustees is the
transferred to the Ministry of
determined by Executive management at the official policy-making body, and plays a role in
Broadcasting, and the RDP was
head office in response to changes in the fundraising and in maintaining political rela-
temporarily shutdown for
restructuring and discussions political arena and feedback they receive from tions. But Trustee Hylton Appelbaum says it is
on which Ministry or office it unusual for a Trustee to introduce a major new
the project officers and fieldworkers who are
15The Kasigo Trust (South Africa)
policy direction. Policy emanates from the • Hylton Appelbaum, executive director of
executive management team which discusses Liberty Life Association of Africa Ltd.,
recommendations broadly with KT staff at all director of Liberty Investors Ltd., executive
levels in all regions and with Trustees.
trustee of Liberty Life Foundation and trustee
Of the fifteen Trustees, two are black women
of the President’s Fund.
and three are white men. In addition to the
nine founding members referred to earlier, the • Dr. Mangaliso Maqhina, community doctor
Board includes: in Port Elizabeth.
• Bongiwe Njobe, assistant director of the • Rev. Mazwi Tisani,Anglican Archdeacon of
Post Graduate School of Agriculture and King William’s Town.
Rural Development at the University of
KT holds trustee meetings every two months
Pre-
at which Executive management is always
toria and director of Fedlife
present. When trustee meetings are about
Assurance Ltd.
projects, projects management also is repre-
• Zanele Mbek,: director of the Women’s sented. As with many South African NGOs —
where Board members hold positions on sev-
Development Bank and trustee of the eral different Boards — KT trustees are often
President’s Fund. unable to attend meetings and send proxies.
In addition, since the 1994 elections, three KT
• Rev Zwoitwaho Nevhutalo, Evangelical
Board
members have been elected into Parliament.
Lutheran Church pastor, and chair of the
Institute for Contextual Theology. Given the changing nature of the Trust’s activi-
ties, perhaps the biggest challenge facing
Table 1: Kagiso Trust Staffing Pattern
% Female % Black % Asian/Colored %White
Overall 49 79 13 7
Senior staff 18 73 0 27
Mid-level & management 25 83 10 7
Support staff 93 79 21 0
16Kagiso Trust with regard to governance issues Levels of Management
is the need to clarify trustee involvement. When The six top managers of the organization con-
Kagiso Trust was formed, Trustees were cho- stitute the Executive Committee. Current
sen because they could act as a buffer and incumbents are: CEO Molobi, Deputy Director
protect the organization from the State. Their Kleinschmidt, Projects Director Mogane,
affiliation to the Church also gave the Trust Deputy Projects Director Sowazi, Deputy
respectability, particularly in the eyes of the Director/Planning, Thabiso Ratsomo; and
EU. Trustees are now expected to liaise with, Human Resources
and report to, relevant ministers in govern- Manager Fran Boma. There is currently no
ment with regard to KT program priorities. post for a Financial Director, and Kleinschmidt
fills that role.
Kleinschmidt, who has been tasked with
revamping the KT Trust Deed, says that South This group is responsible for the day-to-day
African NGOs would benefit from a common management of the head office which is oper-
understanding of the concept of “good ationally responsible for fundraising, program
trusteeship” which delimits the boundaries of funding, sectoral strategies and institutional
trustee responsibility. Kleinschmidt would like linkages. This work involves managing three
to see Trustees taking a greater interest in the different types of relationships:
finances of the organization and playing a
• A collaborative relationship with the private
more active role in fundraising but not in
day-to-day
sector;
management.
• A fundraising relationship with the donor
The revamped version will specify the terms of
community; and
office as well as how Trustees are selected —
an issue which has been the subject of ongo- • Political collaboration with state
ing debate within the Kagiso Board and man- structures.
agement. Those arguing against the election
of trustees maintain that one of the strengths The head office also oversees regional opera-
of the Trust is the independence of the tions which are in direct contact with commu-
trustees. Founding Trustee Mohammed nities and NGOs through Program Officers
expresses who provide technical support and assistance
concern over the idea: with funding requests. Members of the Execu-
tive Committee share responsibility for daily
The difficulty becomes…who would elect liaison with regional directors and for produc-
[trustees]? We found that you couldn’t ing project reports for submission to trustee
have the recipients of money electing meetings.
trustees because that would negate the
very purpose because you would lose your The Chief Executive Officer is appointed by
integrity and independence and be subject the Board of Trustees and has the primary say
to a whole lot of lobbying and canvass- in appointing senior and mid-level staff.
ing.… (Trustees are not involved in this process.)
Staff report to the Executive Committee which
reports to the Board of Trustees. Reporting
17The Kasigo Trust (South Africa)
structures are outlined in Appendix Four. Committee which consists of the five regional
directors plus the Executive Committee. This
In addition to heading up Kagiso Trust, Molobi
committee meets every six weeks to debate
serves in a number of other capacities includ-
and develop the project approval system.
ing Chairman of Kagiso Trust Investments
Then there are the program managers who are
(Pty) Ltd., Chairman of Kagiso Publishers,
responsible for specific programs which may
Chairman of Khulani Supervision Services,
be regional or national. Kagiso Trust used to
Chairman of the National Housing Forum
have representative advisory bodies in the
(NHF),8 Chairman of the Investment Develop-
form of Regional Management Committees,
ment Unit, Chairman of Futuregrow (subsidiary
which were set up to advise on projects.
of Southern Life). He also serves on the fol-
These are no longer operational as it made
lowing Boards: Telkom; Lotteries and Gam-
the chain of approval too long.
bling Board; Financial and Fiscal Commission;
First National Bank; Southern Life; Indepen-
dent Development Trust; Mvula Trust; Interna-
tional Advisory Board of Argus
and serves as an advisor to the Joint Educa-
tion Trust.
The CEO plays a major role on a policy level
and in keeping the lines of communication
open between KT and other stakeholders
such as government and foreign agencies and
is very much involved in collaborative relation-
ships with both the private sector and state
structures. He has acted in an informal advi-
sory capacity to Jay Naidoo, Minister without
Portfolio who is responsible for the RDP, on
foreign aid and general institutional restructur-
ing. He is also on the RDP Fund Management
team representing the Ministry of RDP.9
Financial and administrative responsibility lies
with the Deputy Director who also plays a key
role in determining policy. He deals with
development programs in which KT fulfils an
executive role. For instance, Molobi is a
trustee of Mvula Trust, but Kleinschmidt acts
as his proxy and chaired Mvula Trust in 1995.
His responsibilities relate to the day-to-day
affairs of the organization but are not written
in a job
description.
In addition to the Executive Committee at
head office, there is a National Management
18Kagiso Trust Staff
Kagiso Trust currently has seventy-four staff
While KT claims that there was an effort to
members countrywide, of whom 42% are in
train existing staff and that they were given a
the head office. The following table presents
fair chance, there have been criticisms leveled
the breakdown of staff according to gender
against it for not doing enough to retrain
and race. Whilst Kagiso employs about an
existing staff.
equal number of men and women, female
employees are clustered at the lower levels of
the
organization.
After the 1990 decision to transform Kagiso
Trust into a full-fledged development agency,
there was a substantial change in the staff
composition both at head office and in the
regions. During this period, KT drew in many
more
professional staff with experience in develop-
ment, and many of the old staff who were
from the “struggle” movement left. Kagiso
offered a voluntary retrenchment package
which Kleinschmidt describes as a way for
people who did not feel comfortable with the
uncertainty in KT, to leave.
Mohammed describes KT’s staffing approach:
In terms of institutional development, one
of the major issues has been that we start-
ed off by dealing with victims of apartheid
and our primary staffing strategy for the
first five or six years had been to look at
people
who had an affinity to those communities
and…came from that background. When
you move into a development-oriented
direction, you need people with more tech-
nical professional skills who are more pro-
ject-
oriented and I think at this juncture that
this transition has caused us problems. We
have addressed this in two ways — in the
new staffing policies [where] we are looking
for slightly different kinds of combinations
and [in] upgrading skills [of existing staff].
19The Kasigo Trust (South Africa)
The Administration of Funds
Professional standards and internal control
over administration of funds is determined
by systems and procedures insisted on by
donors, particularly the European Union, but,
says Molobi, “It is enforced by our own way
of thinking that we must be as transparent
and professional as possible — so I had to
go out and recruit qualified people in that
area.” Kagiso Trust engages the services of
independent auditors, Price Waterhouse, to
ensure funds are not mismanaged. In addition,
its main donor, the EU, imposes stringent
reporting mechanisms.
There have been questions raised about how
the European Union has handled the flow of
money to organizations. An article in Business
Day (Nov. 15, 1994) claimed that the European
Court of Auditors had attacked the way Brus-
sels officials had handled aid paid into the
Kagiso Trust Bursary Fund, a sum of some
R85 million (approximately US$23 million). The
EU’s’s Program Coordination Office in Preto-
ria, now a diplomatic mission, is partly blamed
for failing
to provide Brussels officials with information
to monitor and control the program. The
report said that “there was no evidence that
independent checks had been made on the
1992 and 1993 programs to determine that
the students receiving bursaries actually exist-
ed.”
A few days later in the same newspaper (Busi-
ness Day, November 18, 1994), CEO Molobi
countered the allegations saying that spot
checks on European Union Kagiso Trust pro-
jects, including the bursary program, had
been carried out recently and no irregularities
had been found.
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