CBM is underpinned by the following principles, adapted from the sustainable livelihoods approach (SLA):

• People-centred: sustainable development and poverty elimination requires respect for human freedom and choice as well as an understanding of the differences between groups of people and the development of focused interventions.
• Responsive and participatory: People must be key actors in identifying and addressing their livelihood priorities, including the poor. Outsiders and organizations need processes that enable them to listen and respond to people's views.
• Holistic: We need to understand people's livelihoods and how these can be enhanced in a holistic way, which recognizes the interrelationships between the different aspects of their lives, although actions arising from that understanding may be focused. For better-off people, income can purchase some other assets, for poor people, the set of assets is critical.
• Building on strengths: it is important to recognize and understand people's strengths, including those of poor people, and not just their problems. This is respectful and provides a platform on which livelihood strategies can be developed. It is also important to build on the strengths of organizations.
• Conducted in partnership: implementation of development requires using the strengths of different organizations, public and private, in the most effective way. Partnerships should include people and their organizations, including those for poor people. Partnerships should be transparent agreements based upon shared objectives.
• Recognising connections: development for poverty reduction is an enormous challenge that will only be overcome by working at multiple levels. Micro-level activity should inform the development of policy and an effective governance environment. National and sub-national structures and processes should recognize community level realities and support people to build upon their own strengths. Top-down strategic action as well as bottom-up participatory processes are required.

Community-based Management (CBM) signifies an approach to reducing poverty that promotes action by communities, puts them in control of development interventions and at the centre of making decisions about their social, economic and cultural well-being. It builds on long experience of community participation, but goes further in promoting and enabling significant powers of decision-making, control and ownership over facilities and resources by communities themselves.

CBM is an emerging approach that seeks to make the best use of resources available within the community with support from government agencies, NGOs, the private sector, and other communities. It is not a prescribed formula but can involve the following elements:

• Actively discussing their issues as a community, challenges and ways forward, rather than development just happening to them;
• In some cases taking this forward to more formal planning such as community-based planning, analysing their situation, deciding on priorities, and planning for those;
• Communities allocating their own resources (time, money, transport etc) to support their own development, voluntarism, e.g. people serving on school governing bodies, acting as voluntary community-based workers;
• Communities supporting each other, e.g. through local support programmes for youth, or the unemployed;
• Communities managing projects and activities to support their own community, through formal legal structures such as community trusts, or informal through support activities (e.g. providing meals for elderly);
• Communities actively raising and managing funds to support their priorities;
• Communities educating themselves on issues which affect them, e.g. on HIV/AIDS etc;
• Communities taking responsibility to deal with anti-social activity, e.g. reporting crime, controlling vandalism etc.