Kagiso Trust: Investing for Development Impact

Abstract

In November 2014, as the South African development agency, Kagiso Trust (KT) prepared to celebrate 30 years of existence in 2015, Themba Mola, KT’s chief operating officer, reflected on the development work that the organisation had done since it started out in 1985. KT’s intention was to bring about deep social and economic value in the communities it served through the programmes that it developed and funded. As Mola reviewed what KT had achieved, he asked himself whether the organisation needed to do anything differently to ensure that it continued and improved on the work it had been doing thus far.

This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.

2024 Sage Publications, Inc. All Rights Reserved

Resources

Exhibit 1: Profiles of Key Role Players in Kagiso Trust’s History

Hylton Appelbaum

Hylton Appelbaum has served as a trustee of KT since the early 1990s. He is executive director of the Liberty Group Limited, chairman of the Liberty Life Foundation and runs the Donald Gordon Foundation. He was a founding director of KTI and is a director of Kagiso Media and Kagiso Capital. He is a trustee of several other NGOs, including the Helen Suzman Foundation and the Nelson Mandela Children’s Fund. He founded, and is chairman of, the Mindset Network, an education non-profit organisation (NPO).

Reverend Allan Boesak

Rev. Allan Boesak was founding trustee and patron of KT. He was ordained a priest at the age of 23 and completed a doctorate in ethics at the Kampen Theological Institute in Holland. He was one of the founders of the UDF in 1983. He is a former chairman of the ANC in the Western Cape and is currently a minister at Piketberg United Reformed Church.

Reverend Frank Chikane

Rev. Frank Chikane was one of the founding members of KT and is currently chairman of the board. He became involved in the Black Consciousness Movement (BCM) while studying at the University of the North. When he was expelled from the university because of his political activities, he worked as a layman for the Apostolic Faith Mission (AFM), before being ordained a minister in 1980. He helped launch the UDF, served as a member of its executive and was detained in 1985 together with other UDF leaders. Among other positions, he has served as general secretary of the South African Council of Churches (SACC), as a member director of the national executive committee of the ANC, and as director general of the Presidency under President Thabo Mbeki. He currently holds a number of other positions, including president of AFM International.

Dr Max Coleman

Dr Max Coleman was one of KT’s founders and currently serves as a patron. He founded the Detainees’ Parents Support Committee after the detention of one of his sons in 1981, and sold his business to focus full time on political activities when the state of emergency was declared in 1985. He served as an ANC member of the National Assembly in 1994 and was a founder member of the Human Rights Commission.

Achmat Dangor

Achmat Dangor, a celebrated writer and poet who has published seven works of fiction and poetry, has over many years been an active champion of human dignity, freedom and equality. Prior to joining the foundation in 2013, he served, successively, as CEO of the Nelson Mandela Children’s Fund and the Nelson Mandela Foundation. An early advocate for the need to address the emerging HIV/AIDS crisis, he served as interim director of the World AIDS Campaign, and subsequently as director of advocacy and communications at the Joint United Nations Programme on HIV/AIDS (UNAIDS). He is currently the Ford Foundation’s regional representative for southern Africa.

Professor Jakes Gerwel

Internationally recognised and honoured as an academic, Professor Gert Johannes (“Jakes”) Gerwel was one of the early trustees of KT. He served as chairman of the Mandela Rhodes Foundation and the Nelson Mandela Foundation, and as chancellor of Rhodes University. His career includes a term as director general in the Office of the President under Nelson Mandela and vice chancellor and rector of the University of the Western Cape (UWC). He passed away in 2012 at the age of 66 years.

Horst Kleinschmidt

Horst Kleinschmidt has a longstanding association with KT, which started by virtue of the fact that he had served as an assistant to Dr Beyers Naudé at the Christian Institute of South Africa in the 1970s. His passport was withdrawn by the government in 1973, and in 1975 he was detained under the Terrorism Act. The following year, he fled South Africa without a passport and was given political asylum in the Netherlands. He subsequently became head of the International Defence and Aid Fund in London, the body that financed many of the political trials in South Africa under apartheid. He was involved in liaising between the EU and the KT founders from the very beginning. He serves as a director for the AfriOceans Conversation Alliance.

Paballo Makosholo

Paballo Makosholo is KT’s finance and investment executive. He is a chartered accountant by profession with an MCom: SA and International Tax (RAU). He joined KT in 2009 and his primary role as CFO was to oversee the investments of KT and its finance operations. He gained corporate finance experience at KPMG and Rothschild. He serves on the boards of KTH, FirstRand Empowerment Trust and the Johannesburg Housing Company (JHC).

Father Smangaliso Mkhatshwa

A founding trustee of KT, Father Smangaliso Mkhatshwa is a Catholic priest and former secretary general of the SACC. He was arrested under the Internal Security Act after the Soweto uprisings in 1976 and detained for four months. He was served with various banning orders until July 1983. He served as a UDF patron, and between 1994 and 2000 held a variety of prominent positions, including deputy minister of education from 1996 until 1999 and executive mayor of Tshwane from 2000 until 2006.

Yunus Mohamed

Yunus (“YM”) Mohamed was a founding trustee of KT and was serving as KT’s chairman at the time of his passing in 2008. Having joined the Natal Indian Congress in 1970 and later the South African Communist Party and the ANC, he was instrumental in founding the UDF in 1983 and became its regional director for Natal. A lawyer by training, he was the instructing attorney in the Delmas Treason Trial. His legal skills served KT well over the years.

Themba Mola

Themba Mola is the COO of KT, having joined the organisation in 1995. Prior to joining KT, he served as the executive director of KTC. He led the local economic cluster for the Alexandra Renewal Project and was project leader for the Evaluation of the Poverty Eradication Programme for the Department of Social Development in Gauteng. He was involved in the drafting of the Tshwane Metro Organisation and Support for Micro Businesses research project. He has also served as an advisor for the Department of Social Development in the expanded public works programme for the social cluster. He sits on the board of KTC, Kagiso Shanduka Trust, Kagiso Activ, JHC and Makhulonga Matala.

Eric Molobi

One of the people most instrumental in founding KT, Eric Molobi was a dedicated activist in the BCM during the apartheid era. In 1974, he was charged, tried and convicted under the Suppression of Communism Act and sent to serve eight years of imprisonment on Robben Island. He was released in 1982. Molobi obtained his BA degree while serving as a political prisoner. Aside from his involvement with KT and its associates, Molobi held the positions of vice chair of Imperial Holdings, chair of Telkom and director of numerous companies, including Metropolitan Holdings, Northam Platinum and NM Rothschild and Son (South Africa). He was awarded the prestigious Ordre national de la Légion d’honneur by the French government in 1994. He passed away in 2006 at the age of 58 years.

Dr Beyers Naudeé

A founder and founding trustee of KT, Dr Beyers Naudeé studied theology at the University of Stellenbosch and completed a Master’s degree in languages. After the Sharpeville massacre in 1960, he resigned from both his church post in the Dutch Reformed Church and the Broederbond (of which he had been a member), and accepted a post as director of the new multiracial Christian Institute. At the same time, he became an underground supporter of the anti-apartheid resistance. In 1977, the government banned Naudeé for seven years. After his unbanning, he succeeded Archbishop Desmond Tutu as general secretary of the SACC. He passed away in 2004 at the age of 89.

Dean Zwo Nevhutalu

A longstanding trustee and former chair of KT, Dean Zwo Nevhutalu was introduced to KT by Dr Max Coleman. He is a pastor by profession and served as chair of the Institute of Contextual Theology and Educational Aid Programme, Transvaal branch and the Independent Electoral Commission in Limpopo province. He has extensive experience in education, having spent a number of years working as the superintendent general of the Limpopo Provincial Department of Education. His involvement in community programmes includes being the chairperson of the Ecumenical Confessing Fellowship and also the Educational Aid Programme. He is a member of the National Project Consolidate Advisory Working Group. He serves on the board of KTH, KTC and the Kagiso Shanduka Trust advisory board.

Dr Abe Nkomo

ANC veteran Dr Abe Nkomo was a founding trustee of KT and served in this position during the organisation’s early years. He is a general practitioner (GP) by profession and served the community of Atteridgeville for 24 years. As an ANC member of Parliament (MP) and chairperson of the health portfolio, he helped to ensure implementation of the public health reform process in South Africa. Nkomo received the Nelson Mandela Health Award in 1999.

Peta Qubeka

Peta Qubeka was the first employee of KT. After leaving KT, Qubeka (now Mashinini) went on to obtain an MBA and is currently serving as a trustee of the Batho Batho Trust, as a non-executive director of Thebe Investment Corporation and deputy city manager: corporate services for the Ekurhuleni Metropolitan Municipality.

Thabiso Ratsomo

Thabiso Ratsomo, a previous CEO of KT and current trustee, has a long history of political activism, including student activism in 1976 and a prison term on Robben Island during the early 1980s. He is currently the head of ministerial services in the Ministry of Defence. Prior to joining the Ministry, he was chief director: governance in the Office of the Premier in Gauteng, which he joined on leaving his position at KT.

Kgotso Schoeman

Kgotso Schoeman, the current CEO of KT, has been involved with KT since 1994, when he was a programme manager. He has had considerable experience in project management, managing community participation and development processes, local economic programme development and small, medium and micro enterprise (SMME) support and development – skills he uses daily in his current position. He serves on the board of various institutions, including FirstRand, KTH, JHC, Kagiso Shanduka Trust and Kagiso Activ.

Nkululeko Sowazi

Nkululeko (“Nkunku” Sowazi is the current chairman of KTH. He started his career at KT and helped to found KTI. He then went on to co-found the Tiso Group, with which KTI later merged. He now serves as the chairperson not only of KTH, but also of Idwala Industrial Holdings (Pty) Ltd, Idwala Holdings (Pty) Limited, the Home Loan Guarantee Company and the Financial Markets Trust. He is ranked among the 20 richest black people in South Africa.

Archbishop Emeritus Desmond Tutu

Archbishop Desmond Tutu, a founder and founding trustee of KT, was ordained in 1960 and became the first black dean of St Mary’s Cathedral, Johannesburg in 1975. In 1978, he became the first black general secretary of the SACC. Tutu’s dream was to see “a democratic and just society without racial divisions” in South Africa. His support for sanctions helped legitimise the campaign. In 1984, he was awarded the Nobel Peace Prize. In the same year, he became the first black Anglican Bishop of Johannesburg and, in 1986, he was elevated to Archbishop of Cape Town. In 1995, Tutu was appointed chair of South Africa’s Truth and Reconciliation Commission. He retired as Archbishop of Cape Town in 1996. He is currently a KT patron.

Exhibit 2: Some of the Activities Kagiso Trust Funded in the Early and Transition Years

The Civics and Advice Centres Programme

In the early 1980s, civic activists had started to establish civic advice centres that were linked to local civic organisations and the UDF. Many of these organisations helped communities to deal with forced removal, police brutality and non-payment of unemployment insurance and state pensions. They faced concerted opposition from the apartheid government and, as a matter of urgency, KT wanted to ensure that their work continued. Thus, from its inception until the mid-1990s, KT channelled millions of rands through its Civics and Advice Centres Programme to these organisations.

The Kagiso Trust Bursary Programme

One of KT’s most important projects in the 1980s and early 1990s was the KT Bursary Programme, which assisted around 25 000 promising black matriculants to pay for tertiary education. This was a strategy not only to offer tertiary education to those who could not afford it, but also to open up universities to black students. In the late 1980s and early 1990s, the programme dispensed about R300 million a year to bursary recipients. After 1994, donor funds diminished and disbursements had dropped to around R190 million by 1997.

Johannesburg Housing Company

KT formed the JHC as a section 21 NPO to help alleviate worsening living conditions in Johannesburg’s inner city. It went on to become a model in social housing development. From the outset, KT made an important policy decision: that “not for profit” did not mean “for loss”. The result of this was that the JHC had produced a surplus in every year of its existence.

Mvula Trust

KT set up the Mvula Trust in 1993 in conjunction with the Independent Development Trust (IDT) and the Development Bank of South Africa. Mvula went on to become a significant enabler of community water schemes and sanitation projects, playing a vital role in the formation of legislation and policy in the early days of the new democracy. After 1999, when the water services authorities in South Africa were established, Mvula focused on water, sanitation and related services for rural and peri-urban communities.

Kagiso Trust Consultancy

Another important development was the establishment of the Kagiso Trust Consultancy (KTC), which was originally registered on 6 December 1996 with Schoeman as the director. It has had a diverse history and a variety of focus areas over the years. In the early stages, KTC implemented a local government development dialogue programme that managed and facilitated community participation in development processes. By 2011, it was offering specialist services that would support development planning and management in rural municipalities. KTC had developed the Kagiso Data Optimisation System (K’DOS), a web-enabled platform that helped municipalities to bill accurately and collect revenue by cleaning up their data. Municipalities did not have to purchase the system. They could simply access K’DOS via the Internet.

KTC also formed a partnership with the Department of Local Government to build leadership in the municipalities, in much the same way that the Beyers Naudé Schools Development Programme (BNSDP) worked to build leadership in schools.

Exhibit 3: Education Programmes Funded by KT

Eric Molobi Scholarship Programme

In 2006, shortly after Molobi passed away, KT launched the Eric Molobi Scholarship Programme (EMSP) to provide financial support to learners who were academically strong and showed leadership potential, yet lacked the resources to obtain a tertiary education. KT chose the beneficiaries of this scholarship programme from schools affiliated to the BNSDP. Apart from providing total funding for tuition, books, accommodation, transport and other expenses, the scholarship programme helped learners to obtain work experience and assisted them in finding employment once they had qualified.

By 2014, KT had spent R16.3 million on the programme and awarded scholarships to 108 students to study at a tertiary level at South African institutions. By the middle of 2014, of those who had completed their studies, 15 scholarship recipients were employed, nine were doing in-service training and only a few were still looking for employment. The rest were still studying, except for two who had dropped out of the programme. In 2014, KT awarded 15 new EMSP scholarships.

Education Conversations

Education Conversations was a partnership between KT and the University of Johannesburg, aimed at encouraging stakeholders involved in education to move away from the pathology of focusing on the challenges that face South Africa’s education system, and rather to take a keen interest in playing a role in creating sustainable solutions to those challenges.

The Resilience Network Programme

The Resilience Network Programme was the brainchild of the University of the Western Cape. The idea behind it was to celebrate, promote and develop resilience instead of victimhood. KT started working on the concept with the UWC in 2013, and in 2014 was also collaborating with the University of the Free State on the programme. It targeted Grade 10 high school learners in schools in which the BNSDP operated, who had displayed resilience and achieved good results despite coming from poor homes with little support. The learners met on Saturdays during the course of their Grade 10 year and were put through a programme that aimed to develop their strength and tenacity. At the end of the programme, they had to enter a competition where they devised and implemented a project that aimed to address challenges that youth in their area were facing. KT had set aside R1.2 million in 2014/2015 for the Resilience Network.

Exhibit 4: Kagiso Trust’s Income and Programme Spend: 2006-2014

Figure

Appendix 1: List of Interviewees

Trustees

Dr Abe Nkomo

Rev. Frank Chikane

Hylton Appelbaum

Mankone Ntsaba

Dr Max Coleman

Nthobakae Angel

Dean Zwo Nevhutalu

Directors

Horst Kleinschmidt

Kgotso Schoeman

Paballo Makosholo

Thabiso Ratsomo

Themba Mola

Affiliates

Lauretta Bruno

Paul Harris

Sizwe Nxasana

Taffy Adler

Dr Thami Mazwai

Employees

Joan Masemeng

Nontando Mthethwa

KTI staff

Fani Titi

JJ Njeke

Nkululeko Sowazi

Vuyisa Nkonyeni

Beneficiaries

Tate Pule Makgoe Nel

Thembeka Clinton

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This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.

2024 Sage Publications, Inc. All Rights Reserved

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